Archive | August, 2011

Governance is More than Skin Deep!

In a recent Forbes article entitled Warren Buffett, And His Board, May be Too Old to Run Berkshire Hathaway, Francine McKenna makes the case for both greater vigilance by Berkshire investors (including the author) and a different concept of corporate governance. Ms. McKenna may well be right as to her ultimate conclusion, although Berkshire’s performance […]

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CEOs: Not the Best Directors

The new 2011 Corporate Board of Directors Survey from Stanford University’s Rock Center for Corporate Governance and Heidrick & Struggles has uncovered surprises about who makes the best board directors: it’s not necessarily the current CEOs that most companies seek out. “The popular consensus is that active CEOs make the best board members because of […]

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The Mind of an Institutional Investor

Great to see Jon Lukomnik, managing partner of Sinclair Capital, now blogging at The Mind of an Institutional Investor, and now added to our blogroll. Lukomnik’s first two topics are Debunking Myths About ISS and Irrational Short-Termism in Investing. One of Lukomnik’s arguments with regard to ISS is that they are as much a follower […]

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India Against Corruption

Employees replaced their jackets with white tees imprinted with “India Against Corruption” slogan. On 24 August 2011, Bangroleans formed a 17-kilometer human chain on outer ring road to protest against corruption. Finally, the middle class Indians have discarded their cloak of apathy. Passion, enthusiasm and commitment to change the system is replacing cynicism, skepticism and […]

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Which Law Classes?

A George Washington Law School survey that asked alumni which elective courses had proven the most useful to them and which electives they wish they had taken. Here are the top 3 ranked courses on usefulness: (more…)

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Slight Shift Away from Independent Directors in India

Quality independent directors are hard to find today. Ask Azim Premji. India’s third-largest IT company, Wipro, is about to join the horde of companies violating Sebi norms by keeping independent directors beyond the suggested nine-year maximum tenure. After the Storm: The Unregulated Effect of a Corporate Governance Crisis (more…)

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Make Auditors Work for ShareOwners: Take Action

The Public Company Accounting Oversight Board (PCAOB) published a concept release that asks for public input on how to get auditors to become more independent, more objective, and more skeptical – and especially whether a mandatory rotation system for audit firms would achieve that objective. While mandatory rotation has been considered and dismissed in the […]

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When the CEO Really Must Go

It is often said that “the most important function of a board is to hire and fire the CEO.” Yet the experience of many is that boards do a pretty good job on the hiring front and a not-so-good job on the “exit.” The Silicon Valley Chapter of the National Association of Corporate Directors will hold a […]

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Don't Miss Chance to Shape ISS Policy

Many press reports attribute 20% of voting power at some companies to recommendations made by ISS. That makes them sound like one of the most powerful entities in the world. However, much of their “power” is based on their annual survey, which helps ISS shape its recommendations to meet the voting preferences of its customers. […]

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HP's Loss Offers Lessons

When I put on my law teaching hat for the first time all summer, in preparation for my fall term class at DePaul University College of Law,  it became apparent that the unfolding situation at Hewlett Packard is going to be a case study for many law and business school courses.  A fortiori, this means […]

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Medtronic: How I Voted

Medtronic (MDT) is one of the stocks in my portfolio. Their annual meeting is coming up  on August 25. I voted yesterday using the MoxyVote.com platform. However, it is too late to do that today, so you’ll have to use ProxyVote.com. MoxyVote.com had recommendations from seven “good causes,” which included two consolidations.  ProxyDemocracy.org had only two participating funds (more…)

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Bad Rule Adopted on IR

The US Securities and Exchange Commission (SEC) has approved a New York Stock Exchange (NYSE) rule opposed by investor relations service providers who fear the measure will harm their ability to compete. The SEC’s Division of Trading and Markets approved (PDF 95KB) new Section 907.00 of the Listed Company Manual, which will result in the […]

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India: Independence of Boards at Risk

Boards have become larger but controlling for other things, less independent (have fewer independent directors) after the crisis. Much of this seems to be the result of a “supply shock” in which independent directors have become more aware of the risks associated with board positions. In the three weeks of January 2009 after the Satyam […]

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"Video" Friday: Dave Lynn and Marty Dunn on Proxy Access

No video today but borrowing a recent installment from TheCorporateCounsel.net. Oops, you’ve got to be a member to listen to the Dave & Marty radio show discussing the DC Court of Appeals decision in the proxy access case and the implications for the SEC. Another good reason to signup for their great service. Here’s CNBC’s coverage. PwC’s perspective. […]

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The Potentially Binding Nature of Say on Pay

Say-on-pay, somewhat hollow on its own, could be used as a gatekeeper of sorts for corporate waste claims, argues Steven C. Caywood in Wasting the Corporate Waste Doctrine: How the Doctrine Can Provide a Viable Solution in Controlling Excessive Executive Compensation, 12/2010. A revitalized corporate waste doctrine would allow shareowners to have some meaningful power […]

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CSX Decision May Encourage Use of Social Media by Shareowners

In a guest post on Active Investing, Phil Goldstein notes the importance of the Second Circuit’s CSX opinion is not about swap contracts.  See Blog Post on CSX Decision More important is that it reduces the fear that mere communication between like-minded shareowners generates the need to form a 13d group. Merely alleging “concerted action” is […]

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Monitoring the Supreme Court

I don’t know if the SEC will appeal the proxy access decision to the U.S.Supreme Court but if they do, or if you are following other issues that go before that body, you might want to load up a couple of free apps for iOS and Android OS devices: OyezToday tracks the current business of […]

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Review: Business Ethics and Corporate Sustainability

Business Ethics and Corporate Sustainability contains fourteen essays examining mainstream business models with the aim of designing more sustainable systems with regard to corporate responsibility issues, such as the environment and human rights, while reducing overall risk profiles and increasing legitimacy. Christopher J. Cowton, for example, examines the moral status of corporations, their collective responsibility […]

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Review: Your Billable Life

This isn’t a book about corporate governance but since a large number of attorneys read this blog I thought I’d post a quick review of Your Billable Life: A Law Firm Survival Guide for New Attorneys by Bruce F. Dravis since I recently reviewed his excellent book The Role of Independent Directors in Corporate Governance. […]

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Google Book Bibliography Updated

Digital Scholarship has released version 7 of the Google Books Bibliography, which presents over 325 selected English-language articles and other works that are useful in understanding Google Books. It primarily focuses on the evolution of Google Books and the legal, library, and social issues associated with it, especially the Google Book Settlement. To better show […]

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Governance Roadshows Prepare for Proxy Season

Francis Byrd, Laurel Hill Advisory Group, Jeffrey Morgan, National Investor Relations Institute and Kenneth Wagner, Peabody Energy Corporation, discussed the governance roadshow idea at the Society of Corporate Secretaries and Governance Professionals conference in June. Now might be the time to begin preparing to engage shareholders with such an effort – especially since the recent […]

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Risk Managers Needed on Audit Committees

Overall, the number of U.S. Foreign Corrupt Practices Act (FCPA) enforcement actions increased by 85% in 2010. Over the course of the year the U.S. Department of Justice brought 48 criminal cases and the SEC filed 26 new actions. The trend has continued in 2011. In February, 2011, Tyson agreed to a $5.2M settlement. A […]

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Federal "Agency Judgement" Rule Needed

Roger Coffin, associate director of the Weinberg Center for Corporate Governance, argues the D.C. Circuit Court’s recent decision to vacate SEC Rule 14a-11 requires a rethinking of the APA and its intersection with the requirements of the law adopted by Congress in 1995 requiring enhanced cost/benefit analyses. A better approach, and one the SEC should […]

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Trading on Emotions

Investors’ previous experiences with a stock affect their willingness to repurchase the stock. Using detailed trades data from two brokers, Michal Strahilevitz, Terrance Odean, and Brad M. Barber document that investors are reluctant to repurchase stocks previously sold for a loss and to repurchase stocks that have risen in price subsequent to a prior sale. They […]

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Support Women on Boards: 20% by 2020

Three college degrees for every two earned by a man. 85% of purchasing decisions. Nearly 50% of the workforce. And yet, the tiniest of chips in the glass ceilings of boardrooms across corporate America with women holding just 18% of corporate board posts at S&P 100 companies. What’s wrong with this math? Aditi Mohapatra, Senior […]

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