A Director Note by Richard Sandler and Elizabeth Weinstein, Davis Polk & Wardell, recently published by The Conference Board examines the corporate governance practices of the top 50 IPO companies from 2009 through August 2011. A copy of the full Director Note is available here. Read the rest of this entry »
Board diversity in the United States has remained relatively unchanged, despite a variety of developments affecting United States public companies, including an increased emphasis on business justifications for diversity and increased disclosure requirements related to diversity, according to a recent Director Note entitled Revisiting Justifications for Board Diversity published by The Conference Board. The Director Note also reports, however, that the existence of an outlined strategy for implementing a diversity initiative was an important factor in the overall success of such an initiative, according to one study.
To assist companies seeking to increase gender diversity of their boards, The Conference Board announced this week the release of an innovative scenario modeler developed by The Conference Board and Georgetown University’s McDonough School of Business in partnership with The SAIS Center for Transatlantic Relations at Johns Hopkins University. The model draws on historical data from 2,749 U.S. public companies to examine the evolution of gender diversity on U.S. corporate boards each year between 2011 and 2040. The interactive model allows users to adjust board characteristics to assess how departures from today’s prevailing corporate governance trends could accelerate or impede the progress toward greater gender parity in coming decades. Read the rest of this entry »
Even though shareholders approved most of the executive compensation plans put up for vote in the 2011 proxy season, the tiny minority of failed say on pay votes are getting an inordinate amount of attention for a myriad of reasons.
Those reasons, which reflect an overarching problem between shareholders and companies, range from a pay-for-performance disconnect to poor pay practices to poor disclosure and pay reasonableness, according to a new study by the Council of Institutional Investors (Say on Pay: Identifying Investor Concerns). Based on its interviews with institutional shareholders who voted against say on pay proposals, Farient Advisors LLC, which was commissioned by CII to write the report, found that 92 percent gave pay-for-performance disconnect as the biggest reason for their vote. The other top reasons were poor pay practices (57 percent) and poor disclosure (35 percent). Read the rest of this entry »
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.
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 »
Through the use of sustainability reporting, a handful of public electronics companies are learning how the processes used in the due diligence of tracking their supply chain can help them get out in front on a little known section of the Dodd-Frank Act.
Section 1502 of Dodd-Frank will require public companies to disclose and possibly audit its manufacturing process when it is believed they may be using so-called conflict minerals from the Democratic Republic of Congo and neighboring countries. It is believed that country uses the proceeds of sales of those minerals to finance sexual and gender-based violence and exploitation in the war-ravaged nation. Under the law, the SEC is supposed to draw up rules that will require companies to conduct supply chain due diligence, third party verification and possibly audits of sources such metals as tin, tantalum, tungsten and gold. Read the rest of this entry »
Wouldn’t it be the ultimate irony if the shareholder proxy access rules approved by the SEC under the Dodd-Frank Act were thrown out by a federal court because they could cost companies too much money? One of the major thrusts behind proxy access over the past couple of decades was that the traditional proxy fights to replace directors has been cost prohibitive to minority shareholders who had to pay for their own ballots.
Most likely the court won’t strike down the rules entirely, but instead will ask the commission to tweak the rules to take into account its concerns about costs of implementing the rules, a major argument made by the federal court hearing the case earlier this month. Read the rest of this entry »
The recent Delaware Court of Chancery Air Products v. Airgas decision and the spate of poison pill adoptions in recent months lends credence to the theory that the anti-takeover shareholder rights plans are alive and well.
A Director Notes report entitled Poison Pills in 2011 released by The Conference Board Governance Center yesterday addresses the issue of poison pills and offers some recommendations for corporate boards to avoid becoming a hostile takeover target. The report, co-authored by Andrew L. Bab (a partner) and Sean P. Neenan (an associate) of Debevoise & Plimpton, states that while the shareholder rights agreement is no longer prevalent, recent case law shows that properly structured poison pills can be valuable anti-takeover devices.
Among the four recommendations in the report [Read March 17 press release], Bab and Neenan write that boards should: Read the rest of this entry »
Corporate Governance News
