Tag Archives | social media

CorpGov Tidbits

PLANSPONSOR.com reports, a provision in President Obama’s Fiscal Year 2014 budget that pertains to employee stock ownership plans (ESOPs) could result in a disincentive for offering the plans.

The provision would eliminate Internal Revenue Code section 404(k), an incentive for ESOP creation and operation that permits a C corporation to deduct the value of dividends paid on ESOP stock passed through to employees in cash, deductions used to pay the ESOP acquisition loan, or when the employee reinvests in more company stock in his/her ESOP account balance. 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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Video Friday: Johnson & Johnson's Acuvue Fails to See Issues of Stereotyping Clearly

Sociological Images (Boys Want Success, Girls Want Boys) noted a recent Acuvue contact lens commercial aimed at teens that reinforces both gender and racial stereotypes.

The teens look forward to their futures. For the boys, these involve future career success — notice the African American teen dreams of being a famous athlete, while the White boy’s Continue Reading →

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Corporate Spring

Ordinary people using Facebook and Twitter overturned dictators in Tunisia, Egypt and Libya. David Kirkpatrick of Techonomy Media, which promotes the integration of technology with business and social progress, writes “this social might is now moving toward your company… you’d better get out of their way—or learn to embrace them.”

Gary Hamel, one of business’ most eminent theoreticians of management says,

I don’t think it’s crazy to ask if your CEO is the next Mubarak. The elites—or managers in companies—no longer control the conversation. This is how insurrections start.

Says Marc Benioff, CEO of Salesforce.com: “This isn’t just about Arab spring. This is about corporate spring.”

Twitter is a potent broadcast tool for anyone with a following. By “checking in” via a smartphone app or SMS through FourSquare, users share their location with friends. Foursquare allows users to bookmark information about venues and make Continue Reading →

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CSX Decision May Encourage Use of Social Media by Shareowners

In a guest post on Active Investing, Phil Goldstein notes the importance of the Second Circuit’s CSX opinion is not about swap contracts.  See Blog Post on CSX Decision
More important is that it reduces the fear that mere communication between like-minded shareowners generates the need to form a 13d group. Merely alleging “concerted action” is not enough.  Instead, applying the statute literally requires that coordinated  purchases must be alleged (and proven). According to the decision:
As we have noted, the statute and the implementing rule are both concerned with groups formed for the purpose of acquiring shares of an issuer. See 15 U.S.C. § 78m(d)(3); 17 C.F.R. § 240.13d-5(b)(1).
Whether a group exists under section 13(d)(3) “turns on ‘whether there is sufficient direct or circumstantial evidence to support the inference of a formal or informal understanding between [members] for the purpose of acquiring, holding, or disposing of securities.’” CSX I, 562 F. Supp. Continue Reading →
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Making Independent Board Leadership Work for the Long Term: Yale Governance Forum 2011 Concluding Remarks

Elise Walton

This session was the last for me at the fabulous Yale Governance Forum 2011. I had to leave this session early, missed the last one, missed the Rising Stars event and all those other sessions during the breakout.

The session was held under Chatham house rule, so no citing people or their organization when discussing what they said. Elise Walton moderated a panel that included Geoff Beattie, Thomas Glocer and Lynn Stout.

With two panelists from Thomson Reuters, that company was central to much of the discussion and I think that gives me a little more flexibility under the Chatham house rule, since readers can’t tell where comments came from if I Continue Reading →

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What is Corporate Governance For? Yale Governance Forum

Stephen Davis

The second session of the second day of the Yale Governance Forum 2011 was held under Chatham House Rule. Panelists were announced in advance, so that is no secret, but under the rule those reporting must not attribute what was said to specific individuals on the panel or in the audience. Stephen Davis was the moderator. Kerstin Jorna, Bernadette Kelly and Gregory Lau were panelists.

What you’re getting here is largely my take-away, complete with all my own personal bias, rather than an accurate reflection of what actually was said.

Who is corporate governance meant to serve? We all know it is not a national affair but is Continue Reading →

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Governance in the Cloud

Fay Feeney

The fourth session of the Yale Governance Forum 2011 was was a breakout. All four sessions looked great. I choose the one on social networking held under Chatham House Rule. Under the rule those reporting must not attribute what was said to specific individuals on the panel or in the audience. This discussion was especially interactive, with a great deal of participation from the small audience, as well as the panel. And, just to mix it up, I also added my own thoughts and commentary to these notes.

The panel, moderated by Fay Feeney, started with a YouTube video from Socialnomics on the Social Media Revolution. The message was clear. Social media represents a fundamental shift in how we communicate. They will find you. Will you shape Continue Reading →

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LinkedIn: Connecting to Profits

Social network LinkedIn has reached more than 100 million users and released some surprising facts, including which companies are most connected to the site…

Dominic Jones says Campbell Soup is a standout. Here is an old-economy company among other most connected companies, which include Cisco, Amazon, eBay, Apple, Cisco and EMC.

Venture Beat reportedon a study by a doctoral student at Pace University that concludes that companies with more followers on social networks tend to perform better on the stock market. Another study has also found that social media improves stock liquidity, especially for small companies.  Of course, these conclusions seem rather obvious because the more attention a company gets, the more potential buyers it has for its stock, and share prices are simply a function of supply and demand.

IR Web Report Group Group News | LinkedIn. Dominic Jones sure seems to be using social media tools. See also, Wanted: Tech-Savvy Directors.

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IR Makes Use of Social Web: AGMs?

While many companies are using social media to push out investor relations information, global conferencing firm PGi (NYSE: PGI) is among a rare few that is also using social media in two-way conversations with investors.

During the company’s recent Q4 earnings call, PGi Senior Vice President of Strategy & Communications Sean O’Brien, who was an equity analyst and portfolio manager before crossing over to the corporate world, used StockTwits to highlight key figures from the company’s results and was on-hand to answer questions from investors…

In an interview with IR Web Report, O’Brien says Atlanta-based PGi, well-known to IR professionals as the service provider behind 1 in 4 earnings calls, views social media as just another way to communicate with external stakeholders, one that soon won’t seem unusual.

via PGi makes investor relations social | Dominic Jones, IR Web Report, 3/21/2011.

It would interesting to see similar tools used by directors at annual meetings. (see The Annual Meeting: From Gloss to Dialogue) Disclosure: The publisher of CorpGov.net has a very small long position in PGi.

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Boardrooms at the Speed of Light

Technology has become a staple of the boardroom over the past decade. Today we see it reshaping the parameters of corporate governance itself. Electronic board books and board portals are shaking up what happens in the boardroom, of course, but online social media such as Facebook, Twitter, and LinkedIn will force directors to rethink how they reach out to stakeholders.

Fay Feeney‘s article in the March/April edition of The Corporate Board, Leading a Board at the “Speed of Instant,” provides another excellent overview of why boards should embrace social media. She elaborates on three key lessons:

  1. Know what people are saying about you and your directors.
  2. Work with your corporate counsel to explore how board portals can improve your board effectiveness.
  3. Ask your corporate counsel to explore technology for enhancing shareholder communications.

The same issue contains a good conversation with John Gillespie: Why Boards Continue to Fail. The co-author of Money for Nothing: How CEOs and Boards Enrich Themselves While Bankrupting America says Continue Reading →

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PotashCorp wants you to “Like” its pay disclosures

PotashCorp (TSE, NYSE:POT) is tackling the touchy topic of executive pay with a web-based communication campaign that includes a shareholder survey, a series of videos, and pay disclosures you can easily tweet or Like on Facebook.

The Canadian company, which voluntarily adopted an annual say-on-pay vote two years ago, yesterday announced the availability of a new shareholder survey and director videos explaining the company’s pay practices. It did so in a note that was posted on its website and distributed to its Twitter account and Facebook page.

via PotashCorp wants you to “Like” its pay disclosures | IR Web Report, 3/4/2011.

Dominic Jones walks readers through one of the most innovative efforts I’ve seen to date to educate shareowners about a company’s compensation practices. I think I’ve seen the near-term future of CD&A’s, HTML proxy statements, online surveys and use of social media to better ensure favorable say on pay votes for management.

I took Potash’s survey (you have to say your a shareholder or else it kicks you out). Although I didn’t click on enough links to satisfy myself that executives at Potash are paid reasonably, I did note that they hit the right buttons and presentation was great. Drilling down further might yield issues though. For example, as I recall, they had a clawback policy that calls for the recoupment of unearned compensation that results from misconduct by an executive that causes the company to restate its financial statements.

That doesn’t go far enough, as far as I’m concerned. I would recommend a “no-fault” clawback provision, which would require recoupment following a determination that the prior achievement of performance goals was based on incorrect data. Like clawback provisions triggered by any restatement, a “no-fault” provision addresses the argument about the unfairness to shareowners that results from allowing executives to keep compensation awarded on the basis of performance targets that were not actually met. However, a “no-fault” provision would also require recoupment in circumstances where incorrect data result from an innocent mistake, not fraud or misconduct or where applicable accounting standards would not require a restatement of financial statements. Why should an executive get a bonus for a target not actually met?

Although I can’t fully endorse Potash’s pay plans (primarily because I haven’t done the analysis), they certainly deserve credit for presentation. I’ve seen the future. It is in Canada.

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Social Media for Directors

Winnie Yu recommends directors join LinkedIn. Patricia Lenkov, president of Agility Executive Search, advises joining a LinkedIn group that interests you. A search for “corporate governance” turned up 186 groups when the article was written. Last I checked it was 240.

Want the latest corporate governance news on Twitter? Lucy P. Marcus, CEO of Marcus Venture Consulting and a board director herself (@lucymarcus), recommends following:

Social Media Networking: Quick Tips for Busy Directors – First Quarter 2011 – Boardmember.com. I’m delighted to be in the company of such fine tweeters. Social Media has great potential to help us all learn from each other.

Bill Baue and Marcy Murninghan authored working paper several months ago that Continue Reading →

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