Interesting article in The Economist (Corporate Constitutions, 10/28/2010) on the recent revolution in corporate governance. in 2009 less than 12% of incoming CEOs were also made chairmen, compared with 48% in 2002. CEOs are held accountable for their performance—and turfed out if they fail to perform, with the average length of tenure dropping from 8.1 […]
Archive | October, 2010
UK Looks at Short-termism
James McRitchie, 10/30/2010 ,
UK’s Secretary of State for Business, Vince Cable, launched a consultation into corporate governance and whether failures in that process are stoking a trend for short-termism in investment that damages the long term interests of companies and many of their investors. The consultation will examine allegations that publicly quote companies are being run in order […]
Diehr Elected: Another Candidate Forum Planned
James McRitchie, 10/29/2010 ,
George Diehr has been officially re-elected to the board of administration of CalPERS, as the state elected member. Diehr received 77.5% of the votes; Inderjit Kallirai received 22.4%. Only 28,373 votes were cast by state and Cal State University employees out of about 340,000 eligible voters. We tried to boost interest and voting by holding […]
CalPERS Bonuses
James McRitchie, 10/29/2010 ,
The AP’s Cathy Bussewitz has done a very good job on a topic that I warned needed more attention. (AP Investigation: Calif. pension bonuses examined, 10/21/2010) CalPERS’ plunging value came as stock values tumbled around the world, the state’s economy suffered its worst decline in decades and basic state services faced severe budget cuts. Virtually […]
Video Friday: Pattanik on India, Chevron's "We Agree" Campaign
James McRitchie, 10/29/2010 ,
Devdutt Pattanaik takes an eye-opening look at the myths of India and of the West — and shows how these two fundamentally different sets of beliefs about God, death and heaven help us consistently misunderstand one another. Chevron’s “We Agree” Ad Campaign Environmental and human rights activists have revealed the various leaks that permitted them […]
Bainbridge Guide to Dodd-Frank
James McRitchie, 10/28/2010 ,
In his paper, The Corporate Governance Provisions of Dodd-Frank, Stephen M. Bainbridge provides a brief overview of the seven principal corporate governance provisions of The Wall Street Reform and Consumer Protection Act of 2010 (better known as “The Dodd-Frank Act”). Section 951 creates a so-called “say on pay” mandate, requiring periodic shareholder advisory votes on […]
Diehr Wins in Low Turnout CaPERS Election
James McRitchie, 10/28/2010 ,
George Diehr has been officially re-elected to the board of administration of CalPERS, as the state elected member. Diehr received 77.5% of the votes cast; Inderjit Kallirai received 22.4% of the eligible vote. Only 28,373 votes cast by eligible state and California State University employees out of about 340,000 eligible voters. I did my part […]
Shareowner Response to Virtual Annual Meetings
James McRitchie, 10/28/2010 ,
For almost a year, the United States Proxy Exchange (USPX) has spearheaded a shareowners response to the threat (and opportunity!) of virtual annual meetings. The immediate concern has been corporations hosting virtual-only annual meetings without shareowner-approved guidelines or safeguards to ensure all participants’ rights are upheld. When intel announced plans to hold a virtual-only meeting, […]
Change in USPX Memberships
James McRitchie, 10/28/2010 ,
The United States Proxy Exchange (USPX) is a young, rapidly growing grassroots organization. We are experimenting, trying new things and learning. Just in August, we launched memberships for our supporters. This has been an enormous success, but based on early feedback, we are making a change. We had planned on accepting corporations or other organizations […]
LexisNexis Top 25 Business Law Blogs of 2010
James McRitchie, 10/28/2010 ,
Quite frankly, I didn’t think of CorpGov.net as a “business law blog” until being nominated. It seems like a reasonable category, as long as I don’t have to go to law school! Of course, now I’d love readers to vote CorpGov.net to top honors. First, you must register. That’s free and doesn’t result in sales […]
Corporate Governance Does Not Belong in the Home!
James McRitchie, 10/27/2010 ,
The increasing concerns of institutional investors and their advisors around reimbursement of new executive hires for losses on home sales necessitated by relocations, summarized in an excellent article by Joann Lublin of the WSJ of October 25, 2010, entitled “Shareholders Hit the Roof Over Home-Loss Subsidies” is confusing, to say the least. It’s certainly desirable that […]
End to Forum Shopping?
James McRitchie, 10/26/2010 ,
The always creative Joe Grundfest, a Stanford Law School professor and former SEC commissioner, proposes that public companies adopt charter provisions to select in advance the forum where shareholder litigation would occur… Delaware, in most cases. He argues: Forum selection clauses are common in commercial agreements. They are also broadly respected and readily enforced, even […]
Help With Say on Pay
James McRitchie, 10/26/2010 ,
Towers Watson launched an online survey tool to help companies better understand their shareholders’ views and perceptions on their executive compensation programs. Dodd-Frank requires publicly traded companies to conduct periodic shareholder votes on their executive pay programs, including how often to conduct say-on-pay votes. In preparation for the say-on-pay era, many companies are trying to […]
New Direction for Corporate Secretaries?
James McRitchie, 10/26/2010 ,
I don’t normally write about people switching jobs in the world of corporate governance but Kenneth A. Bertsch joining the Society of Corporate Secretaries and Governance Professionals as their new President and Chief Executive Officer may be one of those more noteworthy moves. Over the course of my 15 year involvement in corporate governance, I […]
Enhancing Shareholder Value: What's Hot in M&A and IP
James McRitchie, 10/25/2010 ,
It had been months since I’d attended an SVNACD breakfast meetings. Top talent was on hand, both among the panelists and in the audience. The facility at Wilson, Sonsini, Goodrich & Rosati was great. Sorry about photo quality… first time working with a new camera that I may not keep. As usual, my notes are […]
Video Friday: Economic Outlook & TARP Hearing
James McRitchie, 10/22/2010 ,
Watch, as BNY Mellon’s Chief Economist Richard Hoey presents a summary of his October update. We continue to expect a broad sustained global economic expansion over the next several years with the fastest growth in those countries in the strongest financial position (largely in the developing world) and the slowest growth likely in those countries […]
CalPERS Boosts Transparency: Will Post Travel Expense Claims
James McRitchie, 10/21/2010 ,
Taking another step to increase transparency, the CalPERS Board has approved publishing on the CalPERS website all travel expense claims and statements of economic interests submitted by Board Members and key staff personnel. The travel information will be posted online within one month of the date of reimbursement. The statements of economic interest – known […]
CorpGov WayBack Machine: Political Power, Dilution, 1st Virtual Fight, Fiduciary Capitalism
James McRitchie, 10/21/2010 ,
Five years ago we discussed Political Power and Corporate Control: The New Global Politics of Corporate Governance by Gourevitch and Shinn. Here are just a few of their observations: Blockholding and minority shareholder protections are negatively correlated. Minority shareholder protections and share price are positively correlated. Blockholding dips after increased minority shareholder protections are likely […]
Only a Few Hours Left to Comment to SEC on Proxy Plumbing (updated)
James McRitchie, 10/20/2010 ,
On July 14, 2010 the Securities and Exchange Commission voted unanimously to issue a concept release seeking public comment on the U.S. proxy system and asking whether rule revisions should be considered to promote greater efficiency and transparency. Today is the last day to comment within the formal timeline. Looking through the comments posted thus […]
Moving Corporate Governance Out of the Fraternity House
James McRitchie, 10/20/2010 ,
Perhaps it takes the mass media to illustrate the skewed focus of corporate law. Here we have the [at least for now] CEO of Tribune Company, Randy Michaels, under fire for a lot of superficial things, such as an alleged frat house atmosphere in the company, while his role in the company going into and […]
Proxy Access Update
James McRitchie, 10/19/2010 ,
As previously reported, after being sued by the Business Roundtable and the Chamber of Commerce, the SEC stayed new Rule 14a-11 and amendments to Rule 14a-8 regarding “proxy access.” According to an October 15 client alert from Reed Smith: On October 8, 2010, the petitioners and the Commission jointly filed a Motion for Expedited Consideration […]
Don't Miss Opportunity to Level Playing Field in Corporate Elections
James McRitchie, 10/19/2010 ,
As many of you know, I petitioned the SEC last year to change the rule that allows blanks on a partially filled proxy or voter instruction forms (VIFs) to go to management and have also complained to the SEC about Broadridge’s failure to impartially identify proxy proposals on VIFs (see Investors Against Genocide Fighting American […]
Kachingle: Pennies in Support
James McRitchie, 10/18/2010 ,
Want to help keep blogs like CorpGov.net afloat? You can effortlessly contribute a few cents on each visit to the sites you choose by join Kachingle and automatically paying $5 a month via PayPal. Then, whenever you see a Kachingle Medallion on a blog, just mouseover the Medallion until it expands and click “Start Kachingling.” Each day you […]
Rating the Raters
James McRitchie, 10/18/2010 ,
I applaud CalPERS for proposing that credit rating agencies (CRAs) should be hired by investors instead of by corporate management. This proposal was in CalPERS’ October 4, 2010 comment letter to the SEC: “Current legislation through the Dodd-Frank Act … appoints the Comptroller General through Section 939D, to study an alternative means to compensate the […]
Income Inequality & Distress
James McRitchie, 10/17/2010 ,
In Expenditure Cascades, based on census data for the 100 most populous counties in the United States, Adam Seth Levine, Oege Dijk and Robert Frank found that counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress, such as commute times, divorce rates and bankruptcy filings. There is no […]
Financial Sustainability: Restoring Market Stability, Corporate Value & Public Trust (ICGN Mid-Year 2010)
James McRitchie, 10/16/2010 ,
Disclaimer: Given Dodd-Frank, proxy plumbing and all those comments I want to provide the SEC, the report below doesn’t do the ICGN Mid-Year Conference justice. I wrote this up more than a week later with poor notes and memory. Comments, corrections and substitute photos are solicited. Sharing Perspectives Across the Atlantic. Phil Angelides, Lord McFall […]
Video Friday: SRI Rockies Interviews & Simon Johnson on "Too Big to Save"
James McRitchie, 10/15/2010 ,
Joe Sibilia, CEO of CSRwire interviews several influential speakers at the 2010 SRI in the Rockies. The series is produced by First Affirmative Financial Network in partnership with CSRwire. Plan to join investors and investment professionals from the U.S. and around the world November 18-21, 2010 at the 21st annual SRI in the Rockies Conference […]
Reputation and the Board: Bridging the Gap
James McRitchie, 10/14/2010 ,
18 November at Henley Business School, University of Reading (UK) The John Madejski Centre for Reputation Conference 2010 Conference exames the relationship between governance and corporate reputation, specifically in the recent financial crisis, with key speakers from the Royal Mail, Unilever, UK Pension Protection Fund, Chartered Institute of Securities and Investments, Financial Reporting Council, and […]
Disclosure & Board Oversight of Political Spending Weak: Contributions Negatively Correlated with Firm Value
James McRitchie, 10/14/2010 ,
A new study finds that while nearly 80 percent of S&P 500 companies have disclosed direct political campaign spending policies, 86 percent have no disclosed policies regarding indirect political expenditures. Additionally, only 20 percent of corporations disclose how much is actually spent and which organizations or causes receive the funds. Key research findings include: Nearly […]
The Pension Research Council
James McRitchie, 10/14/2010 ,
Registered users (free) can download full working papers in PDF format. The Pension Research Council has several new reports in their Working Paper Library: 2010 Series, including Implications of the Financial Crisis for Long Run Retirement Security, Ricardian Equivalence Under Asymmetric Information. and many more. Also of general interest are presentations from their 2010 Symposium: […]
Giant Stirs: Fidelity Backs an Environmental Proxy Proposal
James McRitchie, 10/14/2010 ,
Four Fidelity funds recently backed an environmentalist proxy proposal for the first time on record, Ceres research found. Even though the votes cast by Fidelity funds at MGM Mirage Fidelity’s usual abstentions on shareholder environmental proposals, it is a start. Reuthers (Fidelity records first ‘green’ proxy votes, 10/9/10) goes on to note: Ceres found that like Fidelity, […]
Mortgage Foreclosures: Robo Affidavits & REMICs
James McRitchie, 10/13/2010 ,
The financial and mainstream media have missed the real bombshell in the mortgage foreclosure mess. It isn’t about “sloppy paperwork.” The robo affidavits are an attempt to hide the fact that (1) the mortgage securitization trusts or REMICs didn’t comply with the IRS rules, and (2) the trusts may not have had a legal interest […]
Upcoming Vote: Sparton
James McRitchie, 10/13/2010 ,
Sparton will hold its annual meeting in Schaumberg IL on October 27, 2010. Proposals to be voted on include two that further improve Sparton’s corporate governance to best practices as follows: Proposal #3 includes the adoption of a Majority Voting standard for election of directors, and Proposal #4 includes the de-classifying (de-staggering) of Sparton’s board […]
Should Access to Hedge Fund Websites be Limited to the Rich?
James McRitchie, 10/12/2010 ,
Freedom of speech is under assault in Massachusetts, says Phillip Goldstein of Bulldog Investors. Bulldog Investors is seeking people and organizations to “sign on” to the attached “friend of the court” brief in appeal to the Massachusetts Supreme Judicial Court of a lawsuit challenging the government’s paternalistic prohibition on communications by hedge fund managers with […]
Citizens United: Most Won't Engage But Won't Monitor Either
James McRitchie, 10/12/2010 ,
Back in July, I signed onto a letter from the Center for Political Accountability, Walden Asset Management and Domini Social Investment asking companies about their use of new corporate political spending routes opened up by the Citizens United decision. As of October 7, 2010, 68 companies have formally responded, with several more responses expected. 35 […]