Archive | February, 2015

Push for Increased Gender Diversity in the Boardroom

thirty percent coalitionThe Thirty Percent Coalition’s Institutional Investors continued their active “Adopt a Company” campaign following a series of letters sent to approximately 160 companies in the S&P 500 and Russell 1000 with no women on their boards. The third letter writing campaign to increase gender diversity in the boardroom in the fall of 2014 was supported by representatives of investors representing $3 trillion in assets under management, signed by pensions, state officials, mutual funds, investment managers, foundations, religious institutions, and women’s organizations across the US.  Continue Reading →

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Events James McRitchie will attend

James McRitchie

The Handbook of Board Governance: A Comprehensive Guide for Public, Private, and Not-for-Profit Board Members  read my Chapter 21, The Individual’s Role in Driving Corporate Governance. Current focus: proxy access lite bylaws that don’t meet CII best practices. & exploring possible broad-based ownership structures. Don’t miss these events:

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Proxy Access: Keith Higgins Speaks on SEC’s (i)(9) Review

Broc Romanek

Broc Romanek, Editor of TheCorporateCounsel.net & CompensationStandards.com

Yesterday (2/10/2015), Corp Fin Director Keith Higgins delivered this interesting speech entitled “Rule 14a-8: Conflicting Proposals, Conflicting Views.” There are some really interesting things in this speech on counterproposals, etc., although there isn’t much that helps those companies grappling with proxy access shareholder proposals this proxy season (but there is some, such as #6 below). Here’s some notables from Keith’s speech: Continue Reading →

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Increase Retail Shareholder Participation in Proxy Process

recommendedAs I have been mentioning, I will be on a panel at the 2/19 SEC Roundtable discussing how to increase retail shareholder participation in the proxy process. It is the night before the event; so I’m trying to boil it all down, knowing I’ll probably only get a few minutes to say anything. The previous posts are all well and good about things that should be done. I tried to focus on what the SEC could do to help, since they are holding the event. Now that our panel is about to convene, I’m just going to mention what could prompt participation, whether or not it requires anything from the SEC.

From the SEC notice: This panel will focus on strategies for increasing retail shareholder participation in the proxy process. The panel will discuss how technology – by providing better access to information or easier means of voting – might affect retail participation. In addition, the panel will discuss whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation.  Continue Reading →

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Recommendations to Increase Retail Shareholder Participation

Getting Retail Shareholders to Participate in Proxy Process (Don't call them VIFs)

Getting Retail Shareholders to Participate in Proxy Process (Don’t call them VIFs)

I will be on a panel at the 2/19 SEC Roundtable discussing how to increase retail shareholder participation in the proxy process. Now is the time to boil my rambling posts down to recommendations to increase retail shareholder participation. The SEC agenda is in bold italics; my advice is not.

This panel will focus on strategies for increasing retail shareholder participation in the proxy process. The panel will discuss how technology – by providing better access to information or easier means of voting – might affect retail participation. In addition, the panel will discuss whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation.  Continue Reading →

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Retail Shareholder Proxy Participation: Part 3 – VIFs & CITs

elephant in the roomI will be on a panel at the 2/19 SEC Roundtable discussing how to increase retail shareholder participation in the proxy process. The SEC agenda is in bold italics.  Our thoughts on VIFs and CITs are in normal type. Part 1 is here. Part 2 here.

This panel will focus on strategies for increasing retail shareholder participation in the proxy process. The panel will discuss how technology – by providing better access to information or easier means of voting – might affect retail participation. In addition, the panel will discuss whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation. Continue Reading →

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Retail Shareholder Proxy Participation: Part 2 – CDV

MoxyVote: The closest we got to open and robust CDV

Moxy Vote: The closest we got to open and robust CDV

The last set of questions for panel at the 2/19 SEC Roundtable deal with client directed voting (CDV). Below are a few thoughts with the help of readers. I welcome further comments. The SEC agenda and questions are in bold italics.  Our thoughts are in normal type. Part 1 is here.

This panel will focus on strategies for increasing retail shareholder participation in the proxy process. The panel will discuss how technology – by providing better access to information or easier means of voting – might affect retail participation. In addition, the panel will discuss whether the format of disclosure could be improved to increase the engagement of shareholders and how the mechanics of voting could be improved to affect retail shareholder participation. 

The SEC raises several questions in their last group of questions for the panel on client directed voting, which I discuss below. Continue Reading →

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Retail Shareholder Participation in the Proxy Process: Part 1

Simplified Proxy Voting Diagram

Simplified Proxy Voting Diagram

As mentioned before, I will be on a panel at the 2/19 SEC Roundtable discussing how to increase retail shareholder participation in the proxy process. I’ve been collecting a few thoughts with the help of readers. Time is a major constraint, so I will need to prioritize my main points and will probably end up with a few bullet points by the time Thursday rolls around. In the meantime, I welcome further comments. The SEC agenda is in bold italics.  Our thoughts are in normal type. Continue Reading →

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Video Friday: Triple Feature on Shareholder Engagement

the engagement pyramidEngagement is, or should be, the common theme of our three videos. CalPERS argues it gives them a seat at the table. Professor Damodaran extols the importance of engagement as a possibility. As a shareholder, what avenues are open? In Davos, I think they looked through the wrong lens. Instead of engagement, they focused on an assumed end-goal that rules out other human values. Continue Reading →

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SEC Panelists & Agenda for Proxy Voting Roundtable

Seal of SECThe Securities and Exchange Commission today announced the agenda and panelists for its February 19 roundtable on ways to improve the proxy voting process.

The roundtable, announced in January, will begin at 9:30 a.m. and will be divided into two panels.  Participants on the first panel will focus on the state of contested director elections and whether changes should be made to the federal proxy rules to facilitate the use of universal proxy ballots by management and proxy contestants.  Participants also will discuss the state law, logistical, and disclosure issues presented by a possible universal proxy ballot process. Continue Reading →

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Directors Forum 2015: Part 3

Jeffrey C. Smith

Jeffrey C. Smith

Disclaimer: I’m sharing a few notes from Directors Forum 2015 held at San Diego University beginning 2/25/2015 and ending 2/27/2015. The Forum is held under the Chatham House Rule, so you won’t read any juicy tidbits here. However, I do hope to give readers some flavor of the topics discussed and a little on the general range of opinions. I have take slight liberties with the rule with regard to individual featured speakers, giving some sense of their talks without revealing the specifics of cases raised or providing quoted material of any substance.

Directors Forum 2015: Jeffrey C. Smith

Smith is managing member, CEO & chief investment officer, Starboard Value LP. Noted that Starboard’s rate of return has been 27.8% v average of 9% for S&P 500 over the same time-period. Only works at companies where he believes shareholders are disgruntled. Discussed various cases, such as Darden. (Darden Shakes Up Its Board After Agitation by Investor Starboard)

When they went in, Darden’s EBITA margin was significantly worse than peers when adjusting for real estate ownership and factoring in a rent subsidy. He wanted to get them more focused on a better return for capital than on growth. Continue Reading →

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Directors Forum 2015: Part 2

Stay Or Go

‘Stay Or Go’ Panel

Disclaimer: I’m sharing a few notes from Directors Forum 2015 held at San Diego University beginning 2/25/2015 and ending 2/27/2015. The Forum is held under the Chatham House Rule, so you won’t read any juicy tidbits here. However, I do hope to give readers some flavor of the topics discussed and a little on the general range of opinions. I have take slight liberties with the rule with regard to individual featured speakers, giving some sense of their talks without revealing the specifics of cases raised or providing quoted material of any substance.

Kerrii Anderson

Kerrii Anderson

Directors Forum 2015: Session 3 “Should We Stay or Should We Go? At Play on the Global Stage

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Directors Forum 2015: Part 1

Directors Forum 2015 Opening Reception

Directors Forum 2015 Opening Reception

Disclaimer: I’m sharing a few notes from Directors Forum 2015 held at San Diego University beginning 2/25/2015 and ending 2/27/2015. The Forum was held under the Chatham House Rule, so you won’t read any juicy tidbits here. However, I do hope to give readers some flavor of the topics discussed and a little on the general range of opinions. I have take slight liberties with the rule with regard to individual featured speakers, giving some sense of their talks without revealing the specifics of cases raised or providing quoted material of any substance. My notes are sometimes cryptic. Sorry but my time is better spent on other activities.

Tom Ridge

Tom Ridge

Directors Forum 2015: Sunday

Thomas J. RidgeCEO, Ridge Global, LLC

The Honorable Tom Ridge is the CEO of Ridge Global, which helps businesses and governments address risk management issues. He was the first Secretary of the U.S. Department of Homeland Security, another call to service for the former soldier, congressman and governor of Pennsylvania. Governor Ridge was the keynote speaker at the opening dinner. Continue Reading →

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CSP Inc. (CSPI): Proxy Score 89

CSPII am too busy to provide the usual analysis of the proxy at CSP Inc. (CSPI). Today is the last day to vote the CSPI proxy using the Internet. The most critical item on the CSPI proxy is my proposal to allow shareowners to nominate board members. Please vote in favor of proposal #5, proxy access.

Below is the text of the speech in favor of my proxy access proposal to be give at tomorrow’s annual CSPI meeting, followed by my voting recommendations:

Speaking in support of Proposal #5:

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SEC Reverses No-Actions Under Rule 14a-8(i)(9) On Request

John Chevedden

John Chevedden

Just a quick note to other shareholders who have filed proxy proposals this season. If the company you filed with requested and obtained a no-action letter from the SEC under Rule 14a-8(i)(9), you might obtain a reversal of that sanctioned exclusion. However, as far as I know, you need to ask for reconsideration. I don’t think the SEC is automatically reversing such letters without being requested to do so by the shareholder proponent. See letters to shareowner activist John Chevedden below.

As previously reported (SEC Withdraws No-Action: Rule 14a-8(i)(9) Suspended), the SEC has essentially suspended Rule 14a-8(i)(9) Conflicts with company’s proposal. Chair Mary Jo White issued the following: Continue Reading →

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Recommendations to SEC-IAC on Proxy Access

Proxy Access Road Building (photo by Erik Johansson)

Proxy Access Road Building (photo by Erik Johansson)

I’m delighted to see “Discussion of Proxy Access” (11:05-12:05 p.m.) as one of the items on the agenda for the SEC’s Investor Advisory Committee (SEC-IAC) at the upcoming February 12th meeting. I discuss two recommendations below. Take Action: Please submit your own and paste into comments below. See comments submitted.

Proxy Access: Rule 14a-11

In light of CFA Institute’s Proxy Access in the United States: Revisiting the Proposed SEC Rule with the following findings, it is time to revisit the SEC’s overturned Rule 14a-11. Continue Reading →

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How RIAs Can Take the Lead on Corporate Governance

Louis Brandeis

Louis Brandeis

In his 1914 collection of essays called Other People’s Money and How the Bankers Use It, Louis Brandeis argued that powerful men such as J.P. Morgan leveraged unbalanced control of the public’s assets to their own benefit. One hundred years later, not much has changed. If Brandeis were alive today, you can be sure that he would be advocating for new systems of financial accountability for those on top of the financial hierarchy. Continue Reading →

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SEC to Hold Proxy Voting Roundtable: I’m on Panel Two

Seal of SEC(1/27/2015) The Securities and Exchange Commission announced that it will host a roundtable on February 19 to explore ways to improve the proxy voting process.  The roundtable, which will be held at the SEC’s Washington, D.C. headquarters, will focus on universal proxy ballots and retail participation in the proxy process. I will be a member of the second panel. I invite readers to help me by sharing your ideas.

Proxy voting is important to both investors and companies.  The ability to vote allows investors to make their views known to the company’s management and to participate effectively at annual or special meetings. Thus, the proxy voting process should be robust, effective and workable. Continue Reading →

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Groupthink in the Boardroom Context

GroupThink

GroupThink

Corporate boards are entrusted to make sound and informed business decisions on behalf of shareholders and to take their best interest into consideration. Decisions made at the board level are of strategic significance that may perhaps completely transform the future path of corporations. Examples of major strategic decisions include mergers and acquisitions, entering new markets, launching new product lines, selling off company assets, etc.

An effective board deliberation routine signals to the shareholders that the company directors are carrying out their duties diligently. In the absence of a proper board deliberation mechanism and a healthy and constructive exchange of diverse views across the table, the company and its shareholders could inevitably suffer the unfortunate consequence of losing out on great business opportunities, or being exposed to high levels of risk, or enduring financial difficulties, and ultimately risk losing shareholder value. Continue Reading →

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