Tag Archives | NACD

General Counsel: Corporate Culture Influencer

Corporate Culture Influencer

On September 11, 2017, the John L. Weinberg Center for Corporate Governance hosted a discussion on the role of the general counsel and how she should be a positive corporate culture influencer. The Center has been working with the Association of Corporate Counsel (ACC) to examine this issue in light of ACC’s recent research and white paper on this topic.  ACC is a global bar association with more than 43,000 in-house counsel members worldwide.  Participating in the discussion were the following; Continue Reading →

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NACD Directorship 100 Released

NACD-DirectorshipThe National Association of Corporate Directors (NACD) announced the 2014 NACD Directorship 100, the annual list that recognizes leading corporate directors, corporate governance experts, policymakers, and influencers who significantly impact boardroom practices and performance. NACD has recognized individual directors who serve as role models in promoting exemplary board leadership, oversight, and courage in the boardroom for more than 37 years. Continue Reading →

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The Coca-Cola Company (KO): How I Voted – Proxy Score 63 – Things Go Better With a Split CEO/Chair

CokeThe Coca-Cola Company $KO, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/23/2014. ProxyDemocracy.org had collected the votes of four funds when I checked and voted on 4/15/2014.  I voted with management 63% of the time.  View Proxy Statement, which by the way is very nice and user friendly. See 18 Cool Things about the proxy.

Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →

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A Big Reason Small-Caps Undertake Bad Financings: Board Composition

Adam Epstein - Web - CroppedGuest Post: Adam J. Epstein is a NACD Board Leadership Fellow, the small-cap contributing editor to Directorship magazine, and advises small-cap boards through his firm, Third Creek Advisors. He is the author of The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies (McGraw-Hill, 2012). A version of this article first appeared in the Jan/Feb ’14 issue of Directorship magazine. Mr. Epstein can be reached at [email protected]. More from Epstein on CorpGov.net.

Much is said and written about initial public offerings in this country from seemingly every possible angle. Interestingly, though, there is an equally important financing ecosystem in the U.S. capital markets that is similar in size to and sometimes even larger than the IPO market, about which comparatively little is said or written. Continue Reading →

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NACD Focuses on Ombuds Programs

Last year I attended the NACD Directorship 100, proud to be listed again a worthy of being watched. This year, even though so honored, I won’t be able to make this important learning event. Learning event? Aren’t these functions mostly just networking opportunities? They are both. No one should question the value of such functions as networking opportunities. Who better to meet than the Directorship 100 (and even the ones to watch)? But I just noticed the October edition of NACD Directorship provides evidence of learning beyond even what those putting on the event might have expected. Amazingly I may have played a small part in it.   Continue Reading →

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SVNACD Event: M&A Pitfalls for Directors

M&A activity is on the rise, and recent decisions by the Delaware Chancery Court make the stakes for directors higher than ever. The businesspersons and lawyers on this panel offered plenty of insights about the life-cycle of a current M&A transaction from initial market check to consummation and then follow-up litigation, pointing out the all-too-frequent pitfalls for directors. Continue Reading →

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James McRitchie Honored by NACD

Sacramento, CA (Oct. 8, 2012) — James McRitchie download <https://www.corpgov.net/wp-content/uploads/2009/03/resume2012.pdf>, Publisher of Corporate Governance (aka, CorpGov.net) <https://www.corpgov.net>, has been named to the 2012 National Association of Corporate Directors (NACD) Directorship 100’s “People to Watch” in recognition of his exemplary leadership in influencing corporate boards and for promoting the highest standards of corporate governance.  Selected by the NACD Directorship Editorial Advisory Committee and the NACD Board of Directors, the
NACD Directorship 100 recognizes the most influential leaders in the boardroom and corporate governance community. Continue Reading →

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Video Friday: China: Handle With Care — What Boards Need to Know

China presents enormous opportunities for Silicon Valley companies, but it also offers a very different regulatory, cultural, financial and operational paradigm for boards and executives. What should you know when contemplating investments, operations or acquisitions in China? How should you balance the often conflicting requirements of U.S. and Chinese regulators? What do best practices look like? How can you comply with the Foreign Corrupt Practices Act in a culture where acceptable norms can be very different than in the U.S.? Watch this video from a recent SVNACD event.

CHINA: HANDLE WITH CARE — WHAT BOARDS NEED TO KNOW from WMS media Inc. on Vimeo.

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NACD Names McRitchie as One to "Watch"

(Elk Grove, CA, September 20, 2011) — CorpGov.net is pleased to announce that Publisher, James McRitchie has been named for the second year in a row to the National Association of Corporate Directors’ (NACD’s) 2011 Directorship 100 list of “People to Watch,” in recognition of his work promoting the highest standards of corporate governance.

James McRitchie will be among those recognized at a gala dinner on November 8 at Continue Reading →

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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 session on September 15, 2011 focusing on the pitfalls of CEO changes and how to avoid them. There will be a candid discussion between an experienced CEO and an experienced chairman of a board, facilitated and led by Rich Moran, a member of our board of directors.

Location: Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA 94304. This program, like all SVNACD programs, is subject to the Chatham House RuleRegister Now!

7:30-8:00 a.m. Continental Breakfast; 8:00-9:30 a.m. Program

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NACD Wants SEC to Back Off Say-on-Pay Provisions

In response to the SEC request for comment on say-on-pay rules, the National Association of Corporate Directors (NACD) issued formal concerns, cautioning against dependency on regular, yes-or-no votes.

NACD’s opinions are grounded in its more than 30 years of proprietary research across a broad range of board leadership and corporate governance topics, insights expressed through confidential peer exchanges with its membership spanning F100 through mid-cap and small cap companies, and best practices detailed in its Blue Ribbon Commission reports. NACD’s comments were reinforced by a national survey that drew 280 responses from its members.

Representing the voice of its more than 10,000 corporate director members, NACD urges the SEC not to issue universal requirements, but to allow companies to determine the most appropriate means of communicating with and seeking feedback from shareholders as a more effective governance practice. Additionally, NACD provided the SEC with specific views on frequency of say-on-pay votes, say on golden parachutes and other matters pertaining to executive compensation on behalf of the director community.

NACD appreciates the symbolic value of say-on-pay. However, we believe it is a poor substitute for dialogue. It is much more valuable to have shareholder communication well in advance of plans or votes on plans. Say-on-pay is a yes-or-no, backward-looking vote that may have little utility except to express a very general shareholder view of a pay plan already in effect,

the Association wrote in a letter signed by Honorable Barbara H. Franklin, chairman of NACD and former U.S. Secretary of Commerce, and Ken Daly, NACD’s president and CEO.

In addition to the survey, NACD cited recent board research indicating that dialogue between companies and institutional investors is increasing.  Additionally, say-on-pay votes for early adopters has been substantially positive, calling out the potential for say-on-pay voting to become a meaningless and burdensome ritual for companies and shareholders alike. According to the organization’s letter, “NACD would urge caution in the area of rulemaking. Compensation terms can be interpreted in an overly broad manner, regulating areas that are best left alone.”

Issues also under SEC consideration where NACD offered an opinion include:

  • Small company exemption: NACD strongly supports an exemption on say-on-pay for small companies (those with less than $75 million in public float), as the compliance and paperwork requirements are particularly costly for small businesses that can less easily absorb the cost. Notably, 73 percent of respondents in the director survey indicated preference for small business exemption.
  • Superclawbacks in financial institutions: NACD encourages the SEC to work alongside it in serving as a “voice of reason” when identifying standards and process for whether directors and officers of a company are in fact “substantially responsible” for insolvency. NACD has concerns of this rule being misused for “witch hunts.”
  • SEC disclosure rules regarding compensation consultant conflicts: NACD urges caution that a consultant for an independent board committee should not be considered in conflict just because it performs a significant amount of work. The key point is that the same consultant does not also work for management, a position long-held by NACD and first raised in its 2003 Blue Ribbon Commission report.
  • Recovery of executive compensation: NACD has serious concerns that this provision is ripe for abuse, and may unfairly target honest executives whose compensation and bonus was reasonably earned. NACD recommends an exemption for companies that obtain shareholder approval for retention of the originally rewarded compensation.
  • Disclosure of pay for performance and pay ratios of CEO to median pay of all other employees: Pay for performance, as detailed in the Report of the NACD Blue Ribbon Commission on Performance Metrics: Understanding the Board’s Role, is a value that has long been championed by NACD and practiced by its members. Boards of directors should be able to express how they link pay to performance. However, NACD cautions that companies should be provided the flexibility to describe their philosophy in their own terms, and disclosures should be allowed to vary. NACD commends the SEC for its decision to postpone implementation of pay ratio rules until after the next proxy season. The median pay figure can be highly misleading for a number of reasons, particularly for a global company.
  • Exemption for newly public companies from issuing a say-on-pay vote: With 72 percent of directors indicating preference for exemption, directors believe road shows for IPOs already offer investors ample opportunity to evaluate compensation packages. Furthermore, these requirements place a focus on process during a critical growth phase of a newly public company.
  • “Golden parachute” plans during exceptional corporate transactions (e.g., mergers and acquisitions): NACD does not believe it is necessary to require disclosure during M&A periods above and beyond what is required of companies in general. However, NACD strongly supports disclosure requirements for any newly named executive officers of the company following a merger or acquisition, a view supported by 79 percent of directors surveyed. Any senior executive at a target company joining the leadership of an acquiring company is important, and stockholders have the right to know about leadership.
  • Disclosure of previous say-on-pay: Aligned with 79 percent of surveyed directors, NACD recommends that only the most recent say-on-pay vote should be disclosed. In the current proposal, issuers are required to consider “previous” votes on compensation, but the proposal does not offer a specific definition of “previous.”

“NACD represents the collective voice of the director, and we urge the SEC to closely consider these clear messages coming from America’s boardrooms as it continues to implement new regulations,” said Daly.

I was never a big fan of say on pay to begin with but if we’re going to have it, personally I can’t see carving out so many exemptions as NACD recommends. In my experience, small companies are in greater need of corporate governance “guidance” than many large companies. If the paperwork is burdensome, that should be addressed by reducing paperwork requirements, not through exemptions. Sometimes I wonder if NACD represents the needs of the shareowners its members represent or the more parochial interests of its members… operating like a union for directors. Your thoughts?

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Enhancing Shareholder Value: What's Hot in M&A and IP

Wilson, Sonsini, Goodrich & Rosati

It had been months since I’d attended an SVNACD breakfast meetings. Top talent was on hand, both among the panelists and in the audience. The facility at Wilson, Sonsini, Goodrich & Rosati was great. Sorry about photo quality… first time working with a new camera that I may not keep.

As usual, my notes are cryptic, without much of an attempt to thread coherent sentences. I’m tempted to say the following is for entertainment purposes only, but that would be too escapist. Corrections, comments and better photos are welcome.

My purpose is to provide readers with a sense of what was discussed and highlight a few areas. It may help you know what to investigate further and you’ll be that much more incentivised to attend in person to get answers to your concerns.  Continue Reading →

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We're Being Watched

I’m very honored to have made an NACD Directorship list. No, not the illustrious “Directorship 100,” billed as “the veritable who’s who of the American corporate governance community.” Instead, I’m on a “short list of movers and shakers who merit serious attention as potential boardroom influentials. This new feature of the Directorship 100 recognizes a few outstanding individuals who, by virtue of what they do and how they do it, bear watching.”

Thanks to whoever nominated me. Great to be on a list that includes Vineeta Anand (AFL-CIO) Kenneth Bertch (Morgan Stanley), Francis H. Byrd (The Altman Group), Paul Lapides (Kennesaw State University), Gary Lutin (Shareholder Forum), Frank Partnoy (University of San Diego), Francis G.X. Pileggi (Blogger on DE Courts) and several others, some of whom I have admired and followed many years.

Coming up with the short list or the Directorship 100 would appear to be a tough job. Someone highly influential will always be missing, even if they’ve been there in years past. For example, this year where is Nell Minow? She’s still the queen of quotes and as influential as ever, as far as I’m concerned. And if they are going to consider bloggers like me, where is Broc Romanek? Doesn’t everyone read theCorporateCounsel.net? What about Jay Brown’s theRacetotheBottom.org?

Anyway, thanks NACD… I’m watching you too and honored to be on your short list. NACD does good work. Proxy access offers them an opportunity to provide training on how to be or how to word with “dissident” board members.

While I’m on the topic of lists and watching each other, I also made J.W. Verret’s list of My Favorite Corporate Law Blogs. “Corpgov.net.  Always good to keep an eye on what the other side is up to.  Jim McRitchie blogs about the latest developments in shareholder activism.”

I feel the same way about Verret. For example, his Defending Against  Shareholder Proxy Access: Delaware’s Future Reviewing Company Defenses in the Era of Dodd-Frank feels too much like providing advice on how to circumvent the law to me. I’m not nuts about paying taxes but I certainly see it as a moral duty and don’t look for every possible loophole, especially anything of borderline legality.

Boards that use many of his “defenses” will simply stir unwanted animosity among their shareowners. Better to try to work together. (For example, see Proxy Access: Be Sure Your Board Is Ready by Beverly Behan, BusinessWeek, 8/31/10 and/or 2011 Proxy Season: The First 100 Days—How to Get Ready for the Brave New World of Say on Pay and Proxy Access, BoardMember.com)

However, from “the other side,” it is good to know what loopholes may need plugged. Verret’s on my blogroll too, under Truth on the Market.

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Dodd-Frank Webinar

President Obama just signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Time/CNN coverage). The Act contains a number of governance-related provisions that will affect all U.S. public companies—and their boards, and is likely to increase the influence of shareowners in corporate governance matters almost immediately. The NACD and Weil, Gotshal & Manges are putting on a complimentary webinar to help you understand the bill’s likely impact. Although focused on boards, I’m sure it will be very informative to shareowners as well. Registration. Overview of the act. Friday, July 30, 2PM-3:15PM (Eastern time)

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