Wayback Machine

It has been months, maybe years, since we’ve slipped into the “wayback machine.” Here we go. Let’s have some fun.

Five years ago this month at CorpGov.net. Oops, like much of the old site, these items didn’t migrate properly to the blog, so I’ve now corrected that by posting the June 2007 archives. These items caught my eye. Sorry, no time to update broken links.

  • Re proxy access and former SEC Chair Christopher Cox: “It appears that Cox is leaning toward allowing shareholders to pursue access proposals at specific companies, instead of proposing a universal rule that applies to all issuers. “I share your concerns about imposing a federal set of detailed rules on what is a matter of state law,” Cox told lawmakers. “A national bylaw is not an approach I would favor.”
  • Among many ideas I was looking at five years ago was the idea of having retail shareowners transfer their votes to some person or fund interested in voting on their behalf, since so few appear to be willing to vote themselves.  I checked with several brokers. Scottrade, TD Ameritrade, and Charles Schwab clearly allow their customers to assign voting rights. Generally, investment advisors typically offer voting services and it is done through a simple letter of authorization to the broker, so many brokers will find assignment to any entity easy. Scottrade is clear; the beneficial holder can continue to get informational copies of proxy materials. Surprisingly, I got no response from “full-service brokers” like Merrill Lynch, Edward Jones, and A.G. Edwards. OptionsExpress and E*Trade say they don’t facilitate such assignments, but I’m sure they and other brokers would follow suit if this become a service that customers request. This was, as I recall, prior to MoxyVote.com.
  • For academics in the field of corporate governance I have found no publication better than Corporate Governance: An International Review, edited by Christine Mallin. Of course, the publication is also aimed at practitioners. The May 2007 edition, devoted to “universal ownership” should appeal equally to both. Academics will find areas in need of research; practitioners will find many worthy ideas and recommendations.  (Still the best academic research in the field but now edited by William Judge)
  • The Millstein Center announced expansion of its staff with the appointment of a new fellow: Stephen Davis, president of Davis Global Advisors, co-author of The New Capitalists (Harvard Business School Press, 2006), and editor of Global Proxy Watch. Update: Stephen is now nonresident senior fellow in Governance Studies at the Brookings Institution and the Executive Director of Yale University School of Management’s Millstein Center for Corporate Governance and Performance.
  • Although somewhat reduced, the ethics standards now proposed by CalSTRS still set a high bar. The proposed rules would require trustees to recuse themselves from investment decisions involving firms that have made a contribution to them. They limit contributions to $5,000 from top officials at a single investment firm and $1,000 from individuals. Despite opposition from powerful business interests, CalSTRS expects to adopt the contribution standards in September. I expect CalPERS and others to follow their lead. (CalSTRS revises rules on pay-to-play, 6/7/07, Sacramento Bee)
  • Norway has a bigger share of female corporate directors than any other country. That achievement appears to be the direct result of legislation that requires 40% of each gender on boards by the end of this year or face dissolution, according to the Center for Corporate Diversity. Norway had 6.8% in 2002, when the law was first proposed. Of the 520 public limited companies affected by the law, 55% now meet the requirement. This compares with 14% in the US and 12% in the UK.
  • Twelve large U.S. companies – Pfizer, Colgate-Palmolive, DuPont, General Motors, Lockheed Martin, FirstEnergy, Xcel Energy, CIGNA, Chevron, EMC, WellPoint and Aetnarecently – have announced plans to adopt disclosure policies regarding their political spending. That increases the total to 31, according to the Center for Political Accountability.

Going back even further in time, here’s a few tidbits from June 2002, as reported in CorpGov.net.

  • Members of the CalPERS Board took up the issue of expensing stock options and delayed any action to endorse or reject expensing stock options until August. I wrote, “How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg,” said a wise Abraham Lincoln. After the accounting disclosures of Enron, Global Crossing, Tyco and now WorldCom, the investing public deserves the truth. Ignoring the cost of options doesn’t mean they are not an expense. Let’s hope CalPERS comes to its senses, even if we have to wait until after the elections.
  • Christopher Palmeri’s article in BusinessWeek (6/24) raises the issue that CalPERS knew about Fastow’s self-dealing partnerships at Enron but didn’t blow the whistle.  I went on to write about conflicts of interest at CalPERS including board members who leave the board and after a year lobby in order to obtain huge placement fees, board members that simultaneously serve on other private investment boards, members who had served on a board for more than 30 years, and a board member heading the investment committee who had declared personal bankruptcy twice.
  • Fidelity Investments, which oversees $800 billion in assets is reviewing how to use itsballots in shareholder votes to protest outsized corporate pay packages, according to Mr. Roiter, Fidelity’s general counsel. Ten years later their record doesn’t impress.
  • Our 15 minutes of fame came on June 4, 2002 when Paul Krugman’s editorial “Greed is Bad” brought CorpGov.Net to the attention of thousands of New York Times readers.

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