Archive | November, 2011

NACD Directorship 100

NACD 100

In corporate governance, all shareholders compete for directors’ attention. Being an intelligent listener in this noisy environment is what the directors of the Directorship 100 do best. The dispersion of shareholder interests means the board has to weigh priorities and make some unpopular choices. In doing so, it looks to those fellow Continue Reading →

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ISS Webinars: Key Governance Issues

Webinars on U.S. and European policy perspectives will provide valuable insight into the key corporate governance issues facing investors and companies for 2012.

European Policy Perspectives: Tuesday, December 6, 2011, 2:30 PM GMT, 3:30 PM CET. Presented by ISS’ Jean-Nicolas Caprasse, Head of Business, Europe; Daniel Jarman, Head of U.K. Research; Thomas von Oehsen, Head of German-Dutch Research, ISS and Eva Chauvet, Senior Analyst, French Research, ISS, this webinar will give an overview of key updates to ISS’ benchmark European proxy voting policies for the 2012 proxy season.

U.S. Policy Perspectives: Wednesday, December 7, 2011, 11:00 AM EST. Presented by ISS’ Dr. Martha Carter, Head of Governance Research; Carol Bowie, Head of U.S. Compensation Research; and Patrick McGurn, Special Counsel, it will give an overview of key updates to ISS’ benchmark U.S. proxy voting policies for the 2012 proxy season.

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"Large Number" of Proxy Access Bylaws Predicted: Battle Lines Drawn for American Dream & Ownership Society

According to a recent November 15 newsletter from Latham & Watkins LLP, most companies will adopt a “wait and see” approach for now.  However…

If and when a company receives a shareholder proposal recommending board adoption of a proxy access bylaw, the board may respond (and seek to exclude the proposal from the ballot) by (i) adopting a proxy access bylaw (and claiming the Rule 14a-8 exclusion for substantial Continue Reading →

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Capitalism vs. the Climate

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This article by the award-winning Naomi Klein from The Nation is well worth the read. She takes on one of the most important subjects of the day. Here’s a brief clip:

In The Shock Doctrine: The Rise of Disaster Capitalism, I explore how the right has systematically used crises—real and trumped up—to push through a brutal ideological agenda designed not to solve the problems that created the crises but rather to Continue Reading →

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Pepper Spray as Meme

At the University of California-Davis, a group of student Occupy Wall Street protesters were pepper sprayed by university police for refusing to vacate the campus quad. Thanks to the widespread availability of phones with cameras, the incident was photographed and recorded by dozens of onlookers. As a result, images and videos of the pepper spraying incident have flooded the internet with millions of views.

The image is striking in several ways. First, nearly everyone watching has a camera or cell phone and is documenting the event. Second, there is a strong visual separation of the police and protesters — the police are standing, while the protesters are seated. Third, the police officer who is spraying protesters has a very casual, removed demeanor and stance. There is no Continue Reading →

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Thanksgiving From CorpGov.net

Julia Fayerweather Afong

I feel like one lucky guy on America’s Thanksgiving. I just got back from visiting my wife’s 97 year old great aunt in Honolulu. Wonderful to hear stories of her own experiences during WWII and the Depression. Also, to hear her speak of stories she heard from her grandparents (Julia at left) who brought the first banyan and lychee trees to Hawaii and about ancestors who predicted the birth of King Kamehameha, played a key role in the Battle of Nuʻuanu, and created the Hawaiian flag.

Auntie reminded me of how much we are shaped by those who have gone before us. Although the world of corporate governance as a named discipline is Continue Reading →

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Manhattan Institute on Shareholder Activism

I welcome the Manhattan Institute‘s Center for Legal Policy to the corporate governance debate.

The Manhattan Institute launched its Proxy Monitor project. The ProxyMonitor.org database assembles information on the 150 largest corporations (by revenues, as ranked by Fortune magazine) and currently includes searchable and sortable information on every shareholder proposal submitted at each company from 2008 through August 1, 2011. (Earlier years’ proposals, and a broader data set of companies, will be added to the database in the months ahead.)

They recently released A Report on Corporate Governance and Shareholder Continue Reading →

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Science of Stock Manipulation

Unless current shareowners suffer a penalty for having CEOs who engage in earnings manipulation and insider trading they are likely to encourage such unethical and damaging behavior, finds a study by Ramy Elitzur, since choosing less ethical managers may be in the best interests of current shareholders, but not future ones.

Many accountants believed that markets are efficient and as such, Continue Reading →

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1st Dodd-Frank Whistleblower Report

Even thought the SEC’s final regulations for the Dodd-Frank whistleblower program just became effective on August 12, 2011, the agency has already filed its first report on the whistleblower program. During the first seven weeks of the program, the agency received 334 whistleblower tips.

The SEC itself cautions that “due to the relatively recent launch of the program Continue Reading →

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Why Precatory Proxy Access Proposals?

The respected scholar, Lawrence Hamermesh, writes about the model proxy access proposal published by United States Proxy Exchange (USPX) and asks why an organization whose motto (”Populus Constituit,” the people decide) is so reluctant to file mandatory bylaw proposals, instead of precatory proposals. (Precatory proxy access proposals, The Institute of Delaware corporate and Business Law, 11/15/2011)

Prof. Lawrence A. Hamermesh

Hamermesh speculates USPX members chose the precatory route because “a mandatory bylaw proposal won’t get nearly as high a vote as a diluted, precatory proposal.” He then goes on to argue that boards of directors should “not to take even a majority vote on a precatory proposal seriously,” since “if real bullets had been at stake the stockholders themselves wouldn’t have Continue Reading →

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Video Friday: Occupy, is the Message too Broad?

The author of Soundbitten: The Perils of Media-Centered Political Activism, Tufts University sociology professor Sarah Sobieraj is a reigning expert on media and social movements in the U.S. In the four minute clip below, she discusses what it is about the Occupy Movement that has led to such favorable coverage. This includes an answer to the now ubiquitous question: “Is their message too broad?”

Occupy Analysis Video

See also, Occupy Wall Street By the Numbers.

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ISS Updates Proxy Voting Guidelines

Institutional Shareholder Services Inc. (ISS), the largest proxy advisory, released 2012 updates to its U.S., Canadian, European, and international benchmark proxy voting guidelines.

The global updates are the result of an extensive consultation process that included outreach to and input from institutional investors and corporate issuers worldwide. ISS analysts will begin applying the updated policies to all publicly-traded companies with Continue Reading →

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Proxy Access: Two Proposals Filed, More USPX Members Needed

The first USPX type proxy access proposal was submitted by Kenneth Steiner (with help from John Chevedden and other members of USPX), which went to MEMC Electronic Materials, Inc. (WFR) on 11/11/2011. Here’s the Whereas portion (the rest is the same as the standard USPX proposal).

WHEREAS, Most long-term shareowners have no reasonable means to make board nominations; this is a standard “proxy access” proposal, as described in http://proxyexchange.org/standard_003.pdf and according to independent research by GMI dated 11/3/2011, more than half of active board members hold no shares in our company. They awarded our CEO options worth over $14 million in 2009 without performance-contingent criteria. They superseded Compensation Committee guidelines in 2010 to award our CEO a discretionary payment. Our CEO’s 2011 annual awards will be 20%-based on a subjective analysis of personal metrics. The stock price plunged 63% in the year ending 11/9/2011. Continue Reading →

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CCGG 2011 Releases Best Practices for Proxy Circular Disclosure

The Canadian Coalition for Good Governance (CCGG) released their 2011 Best Practices for Proxy Circular Disclosure. Companies in many countries will find this a useful document since it discusses the primary communication link the board and its shareowners.

CCGG outlines how to articulate, in plain language, the governance practices and activities of the board, the qualifications of directors, the issuer’s executive compensation programs and alignment with shareowner interests without exceeding the company’s risk appetite.

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Board Governance Review

Perhaps the weakest link for a board review is internal reporting, implementation and action taken based on the review. Feedback should be provided to each individual director and debriefings should occur to discuss development, priorities, committee and board reform, as well as tough discussions—such as leadership and behavioural change and director retirement. A good review affects behaviour. (How to do a proper external governance review by Richard Leblanc, November 11, 2011)

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“Then I realized that, ‘Wow! I didn’t get in trouble!’ So I played it again.”

Renowned Hawaiian musician and guitarist Makana was invited to play instrumental background music at the APEC Summit gala dinner Saturday night here in Honlulu. At the dinner, Makana opened his jacket to reveal a t-shirt which read, “Occupy with Aloha.”

Then, instead of performing the background instrumental he was scheduled to play, he started to sing a protest song he had released earlier that day. As world leaders, including Obama and Chinese Premier Hu Jintao, sat in the Continue Reading →

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The Folly of a $-Centric Universe

Michael Levin argues cites Milton Friedman and Michael Jensen to support an argument that wealth maximization provides investors and executives with apparently the only clear means of setting priorities they really need.

McDonalds Corporation should treat cattle and chickens humanely if doing so will sell more sandwiches profitably, not Continue Reading →

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Future Corporate Voting

Keith Paul Bishop writes:

Section 951 of the Dodd-Frank Act requires companies that are subject to the SEC’s proxy rules to include in their proxy statements “a separate resolution subject to shareholder vote” to determine whether a shareholder vote on executive compensation will occur every 1, 2, or 3 years.   When the SEC was considering amendments to its rules to implement this Continue Reading →

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