CorpGov Bites

The rewards of virtue Does good corporate governance pay? Studies give contradictory answers (The Economist, 4/26/10). Interesting review of a small body of research. Yet, the article provides no real contradiction to the idea that good corporate governance does pay… we’re just having some problems measuring it.

Riding Herd on Company Management, WSJ, 4/27/10. Roger Ferguson, of TIAA-CREF, points to Amgen, which provided shareholders with the ability to comment directly to the compensation committee. He calls on shareowners to more fully engage and on mutual fund companies to have more independent boards of directors, who can put shareholder interests ahead of those of the investment adviser.

EOG investor calls for capping executive severance, The Houston Chronicle, 4/27/2010. Innovative proposal by Amalgamated Bank’s LongView Funds at the annual meeting of EOG Resources, Inc. (NYSE: EOG). The proposal urges the board to adopt a policy prohibiting any equity awards to top executives from automatically vesting upon a change in control.

Wal-Mart Workers Can Sue as Group in Gender-Bias Case Over Pay, BusinessWeek, 4/27/2010. Does anyone need further evidence that getting ahead of the curve on ESG issues pays? In 2001, the company settled 13 lawsuits by paying out $6 million. How much will it cost to settle claims by 2.5 million current and former employees?

SEC Investor Advisory Committee announces agenda for May 17, 2010 meeting. Written statements to be considered by the SECIAC should be received on or before May 10, 2010 through the Commission’s Internet submission form or by sending an e-mail; include File Number 265-25-04 in the subject line.

Credit Rating Agency Hit With Subpoena for Failing to Comply With Investigation, Social Funds, 4/26/10. The Financial Crisis Inquiry Commission (FCIC) issued its first subpoena, to Moody’s Investors Service, for “failing to comply with a request for documents in a timely manner.”

Shareholders veto HKEx resolution, webb-site.com, 4/22/10. Investors sent a clear message to the Hong Kong Exchanges, voting by 70.2% against a proposal to allow the company to bypass board meetings and pass resolutions with a simple majority of signatures.

Next SEC Governance-Reform Target: Proxy Advisors?, Agenda, 4/26/10. The SEC will issue its long-awaited concept release by the end of June on suggested reforms of the proxy voting system such as NOBO/OBO classification, client-directed voting, voting mechanics, and regulation of proxy advisers.

Stanley Black & Decker launches video annual review, Cross Border, 4/26/10. “We’ve created the site to give you access to information in a way that’s more interactive, cost effective and better for the environment. As you travel around the site, you’ll learn about Stanley’s performance in 2009, and you’ll hear from some of our leaders about our exciting future as Stanley Black & Decker.”

Arthur Levitt: The Real Governance Problem, Directorship, 4/27/10. A failure of regulatory oversight led to the problems we now are dealing with. We need a resolution authority to handle the failure of financial institutions.
Regulatory responsibility should be divided into four major areas: prudential regulation and supervision (which applies to deposit-taking banks); market regulation and supervision; consumer and investor protection regulation; and systemic risk oversight.