Tag Archives | board

Apple Inc. (AAPL): How I Voted – Proxy Score 89

silver-apple-logo-apple-pictureStockUnderValueExtraxtionApple Inc. (NASD:AAPL) is one of the stocks in my portfolio. Their annual meeting is coming up on 2/28/2014. ProxyDemocracy.org was down for maintenance when I checked and voted on 2/19/2014, so no voting advice there. I checked a few other sources such as CalPERS, Florida SBA and OTPP but none had disclosed their votes on their sites as of yesterday. I voted with 89% of the Board’s recommendations. View Apple’s Proxy Statement. Continue Reading →

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Directors Forum 2014: Afternoon Sessions

RotundaBelow are notes I took during the afternoon sessions at the Corporate Directors Forum 2014, held on the beautiful campus of the University of San Diego, January 26-28, 2014. This year, I was only able to attend on January 27th. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion.

If you are a director or candidate, investor, senior corporate officer, board or management advisor, academic, or are in some way part of the corporate governance industrial complex or want to be, I hope to see you there January 25-27, 2015. If you attended the Forum this year and have ideas for articles you would like to see or to write for CorpGov.net, please email me your ideas or drafts. Part 1. Continue Reading →

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Proxy Access is Needed at Apple

silver-apple-logo-apple-pictureDespite the Apple Board’s best effort to obtain a “no-action” letter to exclude my proxy access proposal, it is included among the items to be voted on at or before the annual meeting to be held on February 28 at our Company’s principal executive offices in Cupertino, CA.  See Apple’s proxy, Proxy Proposal 11, ‘Proxy Access for Shareholders’ on page 63. (A minor gripe – why doesn’t Apple provide a linked index to our proxy so that shareholders can easily flip to the subject they are looking for? Let’s hope part of their strategy isn’t making it too hard to analyze the issues and vote.)

Here’s the thrust of my argument. We need directors who can address the big money pile – not with short-term buyback strategies that facilitate extraction of value but with long-term strategies that create value. Investing $150B in Treasuries or money markets is not efficient use of our money. The returns of Google Ventures, for example, are far above the industry’s mean. There is no reason why Apple couldn’t also put our money to good use though an Apple Ventures type of vehicle or through a revamped and enhanced Blue Sky program.  Continue Reading →

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Quick Bites on CorpGov

UnknownDon’t miss the following great reads:

 Activist shareholders’ top priorities for 2014. A must read for directors and shareowners alike. Here’s the first paragraph.

Many of us free ride on actions taken by active, long-term shareholders. These unsung heroes goad managers and boards to reach better decisions, make available desirable employment opportunities and, overall, push them to act like good corporate citizens. These active investors accomplish these things by talking to companies, preparing proxy proposals for all shareholders to consider, and offering recommendations on director elections and company-sponsored proxy measures.

Ralph Ward digs past the standard bullshit in his 2014 Boardroom Insider. Always plenty to chew on in a few short pages. Here’s a tidbit, which I hope will leave you wanting more, which includes more tips than you’ll find in pages and pages of other publications aimed at directors. Continue Reading →

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Video Friday: Vote "For" Proxy Access at Reeds Inc. (REED)

REEDGojiGinger_KombuchaMy first effort to record a video on corporate governance is about my proxy access proposal, now being voted on at Reeds Inc. (REED).  The video below explains Reeds’ great potential and why I submitted a 2013 shareholder proposal to allow shareholders proxy access for up to two director nominees.

Did you know 40% of our Board members own NO stock in our company or that directors are expected to show up for 10 Board meetings a year (plus various committee meetings) but are paid as little as $750 for their service? For that kind of work, with such little financial reward, what is their motive? Are they really Continue Reading →

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Reeds Inc. (REED): The Case for Proxy Access & How I Voted

ReedsIn mid-July I e-mailed investor relations at Reeds Inc. $REEDGojiGinger_Kombucha ([email protected]) asking if REED had a classified board or plurality requirements for director elections. Can shareowners call a special meeting or act by written consent? What supermajority requirements are in place re M&A or other actions? No response. This surprised and disappointed me since they were prompt in answering previous e-mails: Make kombucha; we’re already working on it. Try one with coconut water and ginger; good idea. Where can I find Reeds Kombucha in Sacramento?; here’s a list.

According to FactSet Research Systems, “insider/stake ownership” at REED is 33.5% of the company’s float. Being almost a controlled company, maybe they don’t feel the need to respond to inquiries from ‘outside’ shareowners about the firm’s corporate governance.  They not only didn’t answer me, they blocked me from following their Twitter feed. Maybe management and the current board think the less outside shareowners know, the better for them? Continue Reading →

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Video Friday: Rethinking the structure of corporations, Michael Yaziji

imagesMajor corporations are very good at maximizing revenue capture for their owners — but they do so by externalizing costs to society. This drives many of the fundamental problems we currently face, from environmental degradation to economic inequality. IMD Professor Michael Yaziji discusses limitations to the three current solutions to this root challenge: the free market, regulation and socialization. He also proposes a new fourth solution that deconstructs the concept of capitalism to maximize the benefits of market competition and minimize the societal impact of current systems: changing company ownership and governance structures to internalize the interests, and so create value for all stakeholders. Continue Reading →

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Proxy Advisor Competition at Cisco OK'd by SEC

ciscocisco

Mark Latham came up with a brilliant idea in the late 1980s: Shareowners should use their corporation’s funds to pay for external evaluations of governance and performance of the board and management. Shareowners would vote to choose among competing organizations to provide this service.

It was a simple concept but SEC rules made subsequent proposals unnecessarily complex and excluded advice on director candidates, often among the most critical decisions on a proxy. Continue Reading →

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Bank of America (BAC) Faces Proxy Access on May 8th

John Harrington, of Harrington Investments, will present his proposal on proxy access at the upcoming Bank of America (BAC) meeting on May 8th in Charlotte, North Carolina. It will be the first time language modified to provide a floor for retail nominators of at least 1/2% will be voted on.

That modification was made in an attempt to win over proxy advisors who were concerned the previous version could theoretically allow retail shareowners with as little as $100,000 in equity to nominate directors.  Under the revised proposal, the minimum threshold for a nominating group under provision 1(a) at BAC is approximately $1.3B and under provision 1(b) is approximately $666M. Under either option, that is a substantial investment. Continue Reading →

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Guns and Divestment

The California Constitution provides that the Legislature may, by statute, prohibit retirement board investments if in the public interest and providing the prohibition satisfies specified fiduciary standards. Current law prohibits the boards of CalPERS and CalSTRS from investing public employee retirement funds in a company with active business operations in Sudan and Iran, as specified.

AB 761 (Dickinson) would prohibit the funds from investing in companies which manufacture nonmilitary firearms or ammunition, as specified, and would require the funds to sell such existing investments. Continue Reading →

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Ground-Breaking Proxy Proposals Headed to Shareowner Vote

Climate Change Portfolio Exposure

Boston Common Asset Management has a proposal that will appear on the proxy of PNC Financial Services ($PNC) requesting that it report to shareowners on the greenhouse gas emissions resulting from its lending portfolio and its exposure to climate change risk in its lending, investing, and financing activities. Watch for your proxy. The annual meeting will be held on April 23, 2012. According to the proposal, Continue Reading →

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Corporate Directors Forum – Day 2

This is the last in my series on the Corporate Directors Forum 2013. See materials, slideshowCorporate Directors Forum 2013: Bonus Session, and Corporate Directors Forum 2013 – Day 1, Part 1, and Corporate Directors Forum: Day 1, Part 2. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. I throw in a lot of opinions. Some are those of panelists, some are mine, and some came from the audience. Continue Reading →

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Will Dell Shareowners Get Fair Value?

(Reuters/PRNewswire) Southeastern Asset Management, Inc. the largest outside shareholder of Dell Inc. (NASDAQ: $DELL), today announced that it has sent a letter to the Board of Directors of Dell noting that it believes Dell’s proposed go-private transaction grossly undervalues the Company, and will not vote in favor of the transaction as currently structured.  Southeastern intends to retain and avail itself of all options at its disposal to oppose the announced transaction, including, but not limited to a proxy fight, litigation claims and any available Delaware statutory appraisal rights.  Southeastern beneficially owns on behalf of its investment advisor clients approximately 8.5% of Dell’s outstanding shares (including options).  Southeastern filed the letter with the SEC in an SC 13D today. Continue Reading →

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Video Friday: Replace the Goldman Sachs Muppets

Goldman Sachs has come under fire for placing its interests above those of clients, lack of transparency and insensitivity  regarding its compensation practices. Goldman has been the target of numerous investigations, enforcement actions and private litigation. Key governance flaws include executive compensation and business practices that create financial and reputational risks. Continue Reading →

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Netflix: A Candidate for Proxy Access

Netflix Inc. (NFLX),  which has lost half its value in the last two years, adopted an antitakeover plan (poison pill) intended to block activist investor Carl Icahn from expanding his nearly 10% stake. They did so without seeking shareowner approval and the pill may make it harder to find a buyer. Writing for the WSJ, Miriam Gottfried notes, Netflix Pill Should Give Shareholders Pause. Let’s hope shareowners do more than just pause; let’s take action! Continue Reading →

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Apple: My "Say on Director Pay" Proposal & How I'm Voting

Apple (AAPL) is one of the stocks in my portfolio. Their annual meeting is coming up on February 23, 2012 (Thursday). This is one meeting I’ll be attending in person, both to vote and to move my motion to provide shareowners with a “say on directors pay.”

When I last looked, MoxyVote.com had recommendations from twelve “good causes.”  ProxyDemocracy.org had four participating funds voting. Continue Reading →

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Video Friday: Risk and the Board

Interview with: Andrea Zulberti, Member of the Board of Directors, Prologis and SYNNEX Corporation. Hosted by: Don Keller, Partner Corporate Governance Practice, PwC.

What elements of corporate risk are not receiving adequate Board oversight: (1) strategic, (2) financial, (3) compliance, (4) operational, (5) technology and/or (6) unknown? Is it Management’s or the Board’s responsibility to provide assurances that enterprise risk are all appropriately addressed and within the company’s agreed-upon risk appetite and tolerances? Is it Management’s or the Board’s responsibility to make a (continuing) assessment of whether the corporation has the right controls and processes in place? Should the Audit Committee undertake the Board’s role or a separate Risk Management Committee? Should the Board oversight of “financial” risk be separated from “business” risk?

See this and other brief podcasts on the Silicon Valley NACD website.

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Board Portal Security Offering by Directors & Boards

As we reported several days ago in Directors Desk Potentially Compromised, security of board documents and conversations has increased as a concern. Now Directors & Boards offers a free webinar open to public or private board member, senior corporate executive, corporate governance officer, corporate counsel, or board advisor interested in better understanding board portals and their applications for supporting board communications and executive team collaboration.

Register for Secure Board Portals: What Directors Need to Know About Security, Portability and Control, to be held March 16, 2011 at 2 pm Eastern, 11 am Pacific.

Secure board portals for the browser, and now for the iPad, are changing the nature of board work for directors everywhere. And given recent news, security is the critical issue.

Document security and portability contributes to enhanced communication between and among directors and boards, improved corporate governance, and expanded opportunities for dialog linking directors with management as well as with key shareholders.

In this 60 minute free webinar, BoardVantage’s Joe Ruck, along with a senior board member, and Directors & Boards’ Jim Kristie, will engage in a lively look at new developments in board portal and communications technology, including portable access to board communications and corporate collaboration via iPad apps, and a discussion of important data security concerns.

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A Failure of Governance

Many leading companies strive to follow best practices in corporate governance, demonstrating responsiveness to investors and protecting shareowner value in the process. Paradoxically these same companies often appear to leave their commitment to good corporate governance at the doorstep when they serve on the board of the U.S. Chamber of Commerce (the Chamber). In so doing, they perpetuate a dismal failure of governance.

How so? Many of these companies demonstrate strong environmental and social policies and urge their suppliers to follow suit. Yet sadly, they are silent at Chamber board meetings despite the association’s aggressive actions to undermine sustainable business practices.

The Chamber has always been a powerful force in Washington, lobbying and influencing elections. In the last two years, led by CEO Tom Donohue, it has attacked a wide range of issues including healthcare, climate change, and financial market reforms. The Chamber announced it would spend $75 million in political campaigns in 2010 with one goal being to unseat all congressional members who voted for health care reform. The funds for this partisan political fight were raised and spent in secret, with no public accounting or transparency.

Similarly, the Chamber, allegedly on behalf of the business community, lobbies, speaks publicly and puts political dollars to work effectively challenging company positions on environmental matters. Recently, the Chamber sued the EPA to block its ability to mitigate climate change through regulation.

The Chamber’s website states:

Directors determine the U.S. Chamber’s policy positions on business issues and advise the U.S. Chamber on appropriate strategies to pursue.  Through their participation in meetings and activities held across the nation, Directors help implement and promote U.S. Chamber policies and objectives.

Hence Walden, with other investors, has discussed with dozens of companies how membership on the Chamber board may be perceived as supporting the Chamber’s policies. Sadly, we are learning that Chamber board members rarely speak out publicly, or even privately at Board meetings, to challenge its anti-environmental positions. Nor do they confront the Chamber on its partisan political activities.

Clearly there are multiple contradictions between the environmental policies of Accenture, IBM, Pepsi, Pfizer, and UPS – all board members – and the Chamber’s antagonistic actions against climate change legislation and regulation. Yet, as Board members they set and oversee these very policies and campaigns that undercut their companies’ positions – a perplexing way to spend shareowner dollars.

It is time for Chamber board members to end this pattern of compliant and passive acceptance. It is not acceptable to allow anti-environmental policies to flourish and partisan political campaigns shrouded in secrecy to be the order of the day. A respect for good governance requires companies sitting on the Chamber board to stand up and be counted or head for the exit.

Guest post by Timothy Smith, Senior Vice President and Director of ESG Shareowner Engagement at Walden Asset Management, a leader in socially responsive investing since 1975.  See also, Resolutions Challenge Chamber Board Members on Political Expenditures, 11/15/2010.

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Moving Corporate Governance Out of the Fraternity House

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 staying in bankruptcy during his three year tenure wasn’t enough to bring about such scrutiny or cause the board concern about its own exposure. It took a misstep by one of his subordinates in circulating an offensive video and public disclosure of a ‘frat house’ atmosphere to bring things to this point. (Tribune Co. CEO Randy Michaels: I have not resigned, Chicago Tribune, 10/19/2010)

But sources said board members were concerned that Michaels had publicly embarrassed an iconic Chicago institution, made many of its employees uncomfortable, and had aggravated an already-tortuous 22-month-old bankruptcy process at a highly delicate stage.

In light of those issues, board members also were becoming concerned that the behavior of Michaels and his management team might open them up to legal action over their fiduciary duty to protect the company, the sources said.

To be clear: the juvenile hijinks are wrong, probably illegal and ill-befitting of an executive of a major public company. However, they and the public embarrassment and employee discomfort are a peripheral matter in the grand scheme of things and have nothing to do with return to shareholders, or in this case, creditors, which should as a matter of law, be the board’s focus. Something is wrong with a scenario where a board is motivated to act in accordance with its fiduciary duty only when raucous behavior comes to light, and had no such motivation in the face of poor financial performance resulting in a protracted bankruptcy, and drastic loss of market share.

Something needs to be done about our corporate law environment when CEO’s who have enough sense to avoid personal indiscretions (or keep them private) get a pass on poor strategy or execution, and their performance is subjected to real scrutiny only when juvenile antics come into public view. Similarly, boards should have at least as much legal exposure when they don’t hold management accountable for a lousy job with their core functions as when they don’t react to personal level foolishness.

It’s a curious legal environment indeed when an HP CEO who presided over a doubling of shareholder value and a Tribune CEO who presided over a bankruptcy filing and deterioration of business value during the process suffer the same fate on account of extracurricular personal indiscretion. It’s also a reflection of a system that needs drastic updating to take substantive performance into account as part of directors’ fiduciary duty.

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