The Conference Board Governance Center Blog

Aug
26
2011

Could SEC Whistleblower Bounty Program Be in Plaintiff Bar Crosshairs?

If you think the federal appeals court decision to strike down the new SEC proxy access rule was the only salvo in the Corporate America’s fight against regulatory reform measures included in the Dodd-Frank Act, think again. From what I can gather, it seems support is growing to throw out the whistleblower bounty program rules as well. And that just might be the beginning.

In the past month, there have been two publications that allude to the possibility of business groups using the same argument model in the U.S. Chamber of Commerce/Business Roundtable lawsuit that successfully struck down the shareholder director nomination rules (AKA shareholder proxy access). Also, a partner and senior associate of the law firm that represented the chamber in the proxy access suit has authored an article that rails against the new SEC whistleblower rules, although it does not mention litigation as a way to fight the SEC. Read the rest of this entry »

Aug
11
2011

Conference Board Economist Quells Recession Fears, Calls for Coordinated Global Actions

In this week of stock market volatility and global economic upheaval, I would be remiss if I didn’t share the letter written by The Conference Board Economics department on Monday. In addition to quelling the fears about a second recession and putting the situation in perspective, there is one paragraph that corporate America should pay heed to.

“Perhaps the greatest danger right now is that the current fear of another global recession becomes a self-fulfilling prophecy,” Bart van Ark, chief economist, and Kathy Bostjancic, director of macroeconomic analysis, wrote. “For this reason, coordinated global policy actions that finally move ahead of the curve, as opposed to lagging behind, are needed to show leadership and to halt the current sharp sell-off in financial markets.”

I thought the words, “show leadership,” are quite apt in these trying times. While it seems such leadership is not coming from the divided Congress, it is apparent leadership has to come from the public companies that have a fiduciary duty to their shareholders. That leadership can come in many different ways, but one of the most important would be a constructive dialogue between directors and shareholders. Doing so could go a long way to rebuilding trust in the markets when shareholders need it the most.

As for the letter to Conference Board members, which was made public on Monday, it goes on to give an assessment of the economy and the markets.

The letter states: “Our assessment of the current state of most advanced economies, including the United States and most European countries, is one of weakness and has been so for quite a while. Yet it does not warrant the belief that recession is inevitably around the next corner. At the same time, the market’s assessment of the failing policy environment does pose a serious risk to global financial markets, which can spill over into a further weakening of our economic indicators.

“In our view the risk of recession has increased slightly, but overall it remains low about a one-in-three chance.”

Further economic analysis is available by visiting The Conference Board Economics web site. The Conference Board offers such regular programs and publications as The Conference Board Economics Watch® report and StraightTalk® , which are available free to certain member companies.

Aug
11
2011

Corporate Political Spending Issue Now at SEC’s Doorstep

In light of a divisive presidential election cycle that is about to start, the issue of corporate political spending has gotten some traction over the past month as a committee of academics has petitioned the SEC for new disclosure rules. Public companies may want to keep an eye on how this plays out over the next few months since it is an issue that involves politics and corporate governance at a time when Congress and the President are not too popular.

It would seem that the SEC, with all the rulemaking associated with the Dodd-Frank Wall Street Reform and Consumer Protection Act, would have its hands full. But politics has a funny way of dictating the agenda of a regulator that has had its own public image problems. Don’t be surprised to see if the SEC follows up on the Aug. 3 petition from a group of 10 professors from prestigious business and law schools to propose rules requiring disclosure of corporate political spending. Read the rest of this entry »

Aug
09
2011

E&Y Survey: Uniform Standard for Broker-Dealers, FINRA Rules Worrisome

While the new Dodd-Frank Wall Street Reform and Consumer Protection Act and Financial Industry Regulatory Authority (FINRA) rules that would affect broker-dealers have either not been written or implemented yet, many of those who would be affected expect there to be a huge impact, according to a new study released by Ernst & Young.

Of the four major rulemaking decisions being mulled by the SEC, FINRA and the FDIC, the uniform fiduciary standard and FINRA’s know-your-customer (KYC) and suitability rules (effective date was extended to July 9, 2012) have caught the attention of the broker-dealers the most. (The other two rulemaking decisions mentioned in the survey are OTC derivatives regulation and the so-called Paul Volcker Rule – ban on proprietary trading.) The Ernst & Young survey, which included responses from 42 broker-dealers from March 20-May 3, found that 71.5 percent of respondents the FINRA rules would result in a high impact on their compliance and control processes while 64.3 percent believed the uniform fiduciary standard, although there is no planned specific rulemaking scheduled, would have a high impact. Read the rest of this entry »

Aug
05
2011

Reports: Key to Successful Corporate Philanthropy is Better Alignment to Business

Based on the economic news of the past week, it’s probably not a good time to bring up corporate philanthropy. But then again, maybe it is.

Corporate charitable giving has become an even more important part of doing business over the past five years as corporate citizenship has moved up the board agenda. With a sell-off  in the equity markets under way since last month amid the controversy over the U.S. government debt ceiling debate and sovereign debt worries overseas, many public companies may not have charitable contributions high on their to-do list.DN-V3N15-11 Cover

With that said, it is worth noting that charitable giving by corporations will most likely be flat in 2011 [See Chronicle of Philanthropy,  Corporate Giving Slow to Recover as Economy Remains Shaky, July 24]. However, according to a survey from the Chronicle, cash giving rose by 13 percent in 2010 after there was a 7.5 percent decline in 2009 during the recession. Read the rest of this entry »

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