Tag Archives | Rock Center for Corporate Governance

Activism, Short-Termism and Corporate Governance

Activism, Short-Termism and Corporate Governance

Activism, Short-Termism and Corporate Governance: David J. Berger & J. Daniel Plants

Silicon Valley companies continue to be the leading target for “activism, short-termism and corporate governance.” Directors of some Silicon Valley companies believe these activists are too short-term focused, while some institutional investors believe the activists create value for all shareholders.

One response to the growth of activism has been the adoption by some high-profile tech companies of multi-class stock, as seen in Snap’s recent IPO. Another response has been a movement by several large institutional investors for more independent and diverse boards engaging with investors and focusing on long-term value creation, rather than short-term results.

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Governance Lessons from Wells Fargo

Governance Lessons From Wells Fargo

Governance Lessons From Wells Fargo

Tone at the Bottom: Governance Lessons from Wells Fargo

That was the advertised title for the program co-sponsored by the Rock Center for Corporate Governance and the Silicon Valley Directors Exchange. (Sign up to be on the SVDX mailing list.) After the program, I am still not convinced the real governance lesson from Wells Fargo (ticker: WFC) is not more about lack of oversight from the top, rather than the tone at the bottom.

It was another great panel of corporate governance, legal, and public relations experts for the deep dive into what went wrong. As usual, it was Chatham House Rule, so I’m mostly providing a little more background and some commentary on the presentations. I am sure others drew different conclusions than I did. The panel focused on issues ranging from public disclosure requirements, whistleblower policies and mechanics, compensation policies (including the board’s use of claw-back provisions), company policies regulating employee conduct, and the negative publicity suffered by the bank. Here were some of the advertised questions:

WFC panel

WFC panel

What happens when you have a well-meaning and talented board and a CEO who was regarded within the industry as one of the best managers with a stellar reputation? Was it inevitable that the CEO would be forced to step down by an outraged Congress and populist sentiment? What governance lessons from Wells Fargo are applicable to the non-banking industry, with special attention to Silicon Valley-based tech companies?

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Video: Heads or Tails? The Art and Science of Executive Compensation

SVDXAll directors are keenly aware of their responsibility in setting executive and CEO compensation. Increased external pressure on — and opinions about — CEO pay and more crowded meeting agendas limit the available time for meaningful discussion and make this role more challenging than ever. The stakes in getting executive compensation right are high, with real opportunities to engage leadership and drive business results, but also with real risks of poor outcomes. Continue Reading →

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Heads Or Tails? The Art And Science Of Executive Compensation

SVDXI thought the title of the program referred to heads I win, tails you lose. Now, I’m thinking ‘art’ is one side of the compensation committee coin, ‘science’ the other. Titles that keep us on our toes – just like the programs held by the Silicon Valley Directors Exchange and the Rock Center for Corporate Governance at Stanford Law. The stakes in getting executive compensation right are high, with real opportunities to engage leadership and drive business results, but also with real risks of poor outcomes. As advertized: Continue Reading →

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Video Friday: SVDX Upcoming Event – Got Technology Chops?

SVDXIf you don’t speak Geek, you’re not a competent director.

Have you heard of “Big Data,” but aren’t sure what it really means (or how much it has to do with your industry)? Do you keep seeing articles about cyber-security, but couldn’t describe the difference between SQL-injection and a brute-force (hacking) attack, if your life depended on it? Have you seen the Google self-driving car, but wonder how that could possibly matter to your company (especially in the next five years)? Are you, as they say, somewhat “technically challenged,” but good at what you do and feel content to rely on one of your fellow directors to be the digital media and/or technology guru for the board? Continue Reading →

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Shareholder Lawsuits: Where is the Line between Legitimate and Frivolous?

Larcker, David F. and Tayan, Brian, Shareholder Lawsuits: Where is the Line between Legitimate and Frivolous? (November 27, 2012). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance and Leadership No. CGRP- 29. Available on SSRN. Shareholders of public companies are not responsible for designing executive compensation packages. Still, a shareholder vote on compensation is required in two circumstances: when a company wants to establish an equity-based compensation plan, and annually as part of the Dodd Frank requirement shareholders have an advisory “say on pay.” In deciding how to vote, shareholders rely on information provided in the annual proxy. Continue Reading →
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Video Friday: Use of Social Media By Senior & Board Level Executives is Pitiful

Less than a third of companies today use social media to support their corporate strategy and risk management practices, according to new research conducted by Stanford University’s Rock Center for Corporate Governance, the Center for Leadership Development and Research at the Stanford Graduate School of Business, and The Conference Board.

What Do Corporate Directors and Senior Managers Know about Social Media? details the results of a survey of more than 180 senior executives and corporate directors of North American public and private companies. The findings reveal a disconnect between companies’ understanding of social media and how they apply it to their business. The report appears in the latest Directors Notes published by The Conference Board. 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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