The Conference Board Governance Center Blog

Dec
02
2016

A Strategic Cyber-Roadmap for the Board

To ensure proper oversight of cybersecurity issues, boards should consider either establishing a special committee of the board of directors or securing access by directors to the objective advice of a cyber-expert. That is one of the lessons learned from interviews with five corporate board members conducted by The Conference Board for the  recent Director Notes project.

The report, entitled “A Strategic Cyber-Roadmap for the Board,” also illustrates a three-phase cyber-risk governance roadmap, discusses elements of an effective dashboard to document progress, and articulates practical recommendations for directors. It is a follow-up to The Conference Board’s Emerging Practices in Cyber-Risk Governance study, published in 2015.

For more information on Director Notes and to read archives, visit the Director Notes page.

Dec
01
2016

Is it Time for Sustainability to be a Pocketbook Issue for Executives?

The Conference Board’s newly released Sustainability Practices 2016 Key Findings report shows there is a significant uptick in the number of companies including sustainability metrics as part of their executive compensation schemes. While globally disclosure of most practices remained fairly flat this year, this particular practice saw an increase in disclosure across all indexes, sectors, revenue groups, and regions. To read the report, click here (membership required).

This post from Semler Brossy, an executive compensation consultant, explains how sustainability can be linked to executive pay.

By Seymour Burchman and Barry Sullivan

History suggests that many industries periodically reach inflection points, where factors other than profits, returns, and share price really matter. They generally occur when the business case for major change becomes clear and cannot be ignored. It’s at these points where compensation can help signal change.

Today, we believe many industries have reached such inflection points with sustainability (i.e., operating in the interest of corporate, environmental, and societal good at the same time). This significantly increases the urgency to respond.

The recent rise in public discourse that corporations are bad for society makes the time ripe to ramp up efforts to align sustainability with company missions, core competencies, strategies and pay. Putting corporate executive’s pay at risk would help demonstrate their commitment and help quiet critics who have been busy casting such executives as opportunists.

Read the rest of this entry »

Nov
22
2016

Introducing Director Notes India

The Directors’ Collective™ has published the first installment of its Director Notes India series, Providing Guidance on Related Party Transactions.

The publication is intended to be a resource for directors, general counsels, and company secretaries with regards to the new legal framework and corporate governance regime on related party transactions under the Companies Act, 2013 and the listing regulations prescribed by the Securities and Exchange Board of India (SEBI).

To download the first installment of Director Notes India on related party transactions or to learn more about The Directors’ Collective, visit www.conference-board.org/thedirectorscollective

This installment is a comprehensive and updated guide on the subject and reviews all legal and regulatory standards for compliance in the context of related party transactions, including:

  • The notion and scope of such transactions
  • The thresholds for transactions and consent requirements
  • The role of the audit committee
  • The analysis of key exemptions
  • The protection of minority shareholders—enforcement options and remedies
  • The applicable accounting standards for such transactions

The Directors’ Collective brings together the independent research and thought leadership of The Conference Board with the subject matter and global expertise of professional services firm KPMG and executive search firm Russell Reynolds Associates. The Directors’ Collective is assembling a holistic suite of knowledge assets—encompassing educational publications and benchmarking research; immersive workshops, webcasts and other training programs; and peer networking groups.

Nov
10
2016

Fact of the Week: As companies seek pay-for-performance, stock awards drive higher CEO compensation

By Matteo Tonello, Managing Director, Corporate Leadership at The Conference Board

Stock awards have taken up the slack of virtually every other component of pay. S&P 500 CEOs receive 47 percent of their total pay in the form of stock awards, up from a third in 2010, while in the Russell 3000 it has risen from less than a quarter of total pay to more than a third.

Unfortunately, in its rules on the compilation of the Summary Compensation Table, the SEC does not require companies to distinguish stock awards from performance and time-based awards. But the reviewed incentive plan data included in this report confirms an increasing use of performance share awards, which is driven by the introduction of Say-on-Pay and shareholders’ desire to see a closer link between compensation and performance. In addition, because performance share awards are more liable to loss than fixed share awards, amounts awarded tend to be higher to mitigate this risk.

Download the report for more information about challenges facing corporate compensation practitioners. CEO and Executive Compensation Practices: 2016 Edition and the full Corporate Intelligence portfolio are complimentary to members of The Conference Board and The Conference Board Governance Center. A fee may apply to non-members. (To learn more about our member benefits, email us at membership@conferenceboard.org.)

The report is a collaboration of The Conference Board, Arthur J. Gallagher & Co. and MylogIQ.

In his role, Matteo Tonello advises members on issues of corporate governance, risk management, corporate sustainability and citizenship. He regularly participates as a speaker and moderator in educational programs on best practices and conducts analyses and research in collaboration with leading corporations, institutional investors, and professional firms. Follow Matteo on Twitter: @MatteoTonelloNY.

Oct
26
2016

SEC calls for mandatory universal proxy cards

By Gary Larkin, Research Associate, The Conference Board Governance Center

The issue of using universal proxy cards in contested elections has been on The Conference Board Governance Center’s radar since the spring and held a roundtable for its members last month on the topic. In fact, a small subgroup of the roundtable met with SEC staff earlier this month to discuss the feedback they received and a possible industry solution. [The Governance Center will publish highlights of its September 20 roundtable and a primer on universal proxy in the coming weeks.]

And now, some three weeks after that meeting, the SEC has voted to usher in the mandatory use of universal proxy cards in contested elections that would include the names of all board nominees – those nominated by the board and those nominated by dissident investors. The proposal would give shareholders the ability to vote by proxy for their preferred combination of board candidates. Currently, this can only be done by shareholders who attend shareholder meetings in person.

“This change would allow shareholders through the proxy process to more fully exercise their vote for the director nominees they prefer,” SEC Chair Mary Jo White said. Read the rest of this entry »