http://tcbblogs.org/governance Wed, 01 Feb 2012 20:44:19 +0000 en hourly 1 http://wordpress.org/?v=3.3 Governance Center Blog no http://tcbblogs.org/governance/wp-content/plugins/powerpress/rss_default.jpg http://tcbblogs.org/governance http://tcbblogs.org/governance/2011/09/09/2012-proxy-access-shareholder-proposal-wave-can-commence-next-week/ http://tcbblogs.org/governance/2011/09/09/2012-proxy-access-shareholder-proposal-wave-can-commence-next-week/#comments Fri, 09 Sep 2011 17:58:11 +0000 Gary Larkin http://tcbblogs.org/governance/?p=1323 http://tcbblogs.org/governance/2011/09/09/2012-proxy-access-shareholder-proposal-wave-can-commence-next-week/feed/ 2 http://tcbblogs.org/governance/2011/03/08/chamber-sec-may-sow-the-seeds-for-corporate-governance-compromise/ http://tcbblogs.org/governance/2011/03/08/chamber-sec-may-sow-the-seeds-for-corporate-governance-compromise/#comments Tue, 08 Mar 2011 22:26:28 +0000 Gary Larkin http://tcbblogs.org/governance/?p=1041 http://tcbblogs.org/governance/2011/03/08/chamber-sec-may-sow-the-seeds-for-corporate-governance-compromise/feed/ 1 http://tcbblogs.org/governance/2010/11/08/could-sec-whistleblower-bounty-program-harm-internal-compliance/ http://tcbblogs.org/governance/2010/11/08/could-sec-whistleblower-bounty-program-harm-internal-compliance/#comments Mon, 08 Nov 2010 21:04:23 +0000 Gary Larkin http://tcbblogs.org/governance/?p=848 http://tcbblogs.org/governance/2010/11/08/could-sec-whistleblower-bounty-program-harm-internal-compliance/feed/ 6 http://tcbblogs.org/governance/2010/08/25/proxy-access-first-reform-measure-in-place/ http://tcbblogs.org/governance/2010/08/25/proxy-access-first-reform-measure-in-place/#comments Wed, 25 Aug 2010 20:20:42 +0000 Gary Larkin http://tcbblogs.org/governance/?p=677 http://tcbblogs.org/governance/2010/08/25/proxy-access-first-reform-measure-in-place/feed/ 6 Dodd-Frank Act,Dodd-Frank Wall Street Reform and Consumer Protection Act,Elisse Walter,financial regulatory reform,Kathleen Casey,Luis Aguilar,Mary Schapiro,proxy access,Rule 14a-11,Rule 14a-8,sec,shareholder proxy access It may not be hailed as a shareholder Bill of Rights, but today’s 3-2 SEC vote on shareholder proxy access is the first significant part of the Dodd-Frank Act to be put into place long before the 2011 proxy season. It may not be hailed as a shareholder Bill of Rights, but today’s 3-2 SEC vote on shareholder proxy access is the first significant part of the Dodd-Frank Act to be put into place long before the 2011 proxy season. (The rule changes take effect 60 days after they are posted in the Federal Register.) The reason the SEC could act so quickly on proxy access is that it already had everything in place long before the Democrats pushed through the legislation over the summer. SEC Chair Mary Schapiro just needed the authority to act. “Some of the debate during the past has concerned whether the Commission has the authority to adopt these rules,” she said today. “That question was resolved last month, when Congress adopted and the President signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. That law confirms the Commission's authority to act in this regard.” [See video replay of the SEC open meeting.] And when you factor in the director election-related developments of the past year, it’s easy to see why some company directors may indeed have to worry about facing legitimate competition. In the past year, there has been the loss of the broker discretionary vote, a voluntary movement toward majority voting standards (although some were driven by shareholder proposals) and a trend to declassify boards. These changes point to a need for more shareholder board dialogue. That was part of the message from the three commissioners who voted in favor of the measure (Schapiro, Elisse Walter, and Luis Aguilar). “A significant effort was made by members of the corporate community, academics, investors, and other ‘commenters’ to write detailed and thoughtful letters to the Commission on the proposal,” Aguilar said. “Approximately 600 letters were received. These letters responded to the Commission’s call for comment on all aspects of the rules, and responded to several hundred detailed questions contained in the proposal.” But not all the commissioners were singing the praises of the rulemaking. Troy Paredes and Kathleen Casey, both appointees of President George W. Bush, dissented. “My prediction is that, paradoxically, the rule that the Commission adopts today virtually guarantees that the Commission will be forced to deal with this issue for years to come,” Casey said. “I say this for two reasons. First, I believe that the rule is so fundamentally and fatally flawed that it will have great difficulty surviving judicial scrutiny. Second, an inevitable consequence of this rule, if it survives, is that the staff will be tasked with the unenviable responsibility of brokering disputes and addressing a broad array of issues arising from the operation of this new federal right every proxy season.” [To read all the commissioners statements from today’s meeting, click here.] According to the commission press release, the new rules require companies to include the nominees of significant, long-term shareholders in their proxy materials, alongside the nominees of management. This “proxy access” is designed to facilitate the ability of shareholders to exercise their traditional rights under state law to nominate and elect members to company boards of directors. Under the rules, shareholders will be eligible to have their nominees included in the proxy materials if they own at least 3 percent of the company's shares continuously for at least the prior three years. Of all the changes included in the 451-page adopting release, there are two directors and management should become most familiar: Rule 14a-11 and amended Rule 14a-8. Rule 14a-11 Rule 14a-11, which was adopted by the SEC today, requires public companies under certain circumstances to include on the proxy the names and pertinent information about shareholder director nominees. However, the right of shareholders to nominate directors is subject to state law and, in the case of multinationals, foreign law. [Read the adopting release.] Governance Center Blog no http://tcbblogs.org/governance/2010/08/16/sec-wants-financial-reform-comments-before-regs/ http://tcbblogs.org/governance/2010/08/16/sec-wants-financial-reform-comments-before-regs/#comments Mon, 16 Aug 2010 14:25:58 +0000 Gary Larkin http://tcbblogs.org/governance/?p=662 http://tcbblogs.org/governance/2010/08/16/sec-wants-financial-reform-comments-before-regs/feed/ 0 http://tcbblogs.org/governance/2010/07/15/sec-wants-your-proxy-plumbing-stories/ http://tcbblogs.org/governance/2010/07/15/sec-wants-your-proxy-plumbing-stories/#comments Thu, 15 Jul 2010 20:10:29 +0000 Gary Larkin http://tcbblogs.org/governance/?p=635 http://tcbblogs.org/governance/2010/07/15/sec-wants-your-proxy-plumbing-stories/feed/ 1 Alan Beller,Cleary Gottlieb Steen & Hamilton,concept release,Guy P. Wyser-Pratte,Lagardere SCA,Mary Schapiro,proxy access,proxy plumbing,sec,shareholders,society of corporate secretaries and governance professionals With more than 600 billion shares being voted electronically at more than 13,000 shareholder meetings every year and the growing practice of share lending and the proliferation of short selling by hedge funds, With more than 600 billion shares being voted electronically at more than 13,000 shareholder meetings every year and the growing practice of share lending and the proliferation of short selling by hedge funds, it’s no wonder the so-called “proxy plumbing” is getting “clogged.” But when you consider that shareholders are about to be granted more power than ever, the need for a more accurate and transparent proxy system becomes paramount. It’s hard to imagine that such a complex system as the proxy voting infrastructure has been operating under rules from the 1980s. That’s the justification for the SEC’s 5-0 vote Wednesday to issue  a concept release on making changes to that system, as SEC Chair Mary Schapiro spelled out in a July 9 speech in Chicago at the annual meeting of the Society of Corporate Secretaries and Governance Professionals. [Read Schapiro’s prepared text and watch her comments during the July 14 SEC open meeting.] To get a good idea of just how much the proxy voting system has changed in the past three decades, consider the quick history lesson that Alan L. Beller, a partner at Cleary Gottlieb Steen & Hamilton LLP, related at the Society’s meeting last week. “It got to a point [about 25 years ago] that [actual paper] shares were immobilized and stored in a depository because companies couldn’t keep up with the volume of shares sold on Wall Street,” Beller said. “They had actual runners who used steam trunks to deliver the shares to brokerage houses. Needless to say, that caused lots of inaccuracies.” Even with high technology to keep track of and transmit virtual shares of stock, there are still quite a lot of inaccuracies and a lack of transparency in today’s markets. Thus, the need for some new rules. The concept release, which is the first step toward the SEC issuing new rules, is broken down into three areas: Accuracy, transparency, and efficiency of the voting process Communications and shareholder participation Relationship between voting power and economic interest. The 151-page release deals with such specific matters as: Over-voting and under-voting Vote confirmation Proxy voting by institutional securities lenders Proxy distribution fees Issuers’ ability to communicate with beneficial owners of securities (objecting beneficial owners vs. non-objecting beneficial owners – see Council of Institutional Investors white paper on the OBO/NOBO distinctions) Potential means to facilitate retail investor voting participation Data tagging proxy-related materials Role of proxy advisory firms (possible conflicts of interest) Dual record dates Empty voting (decoupling of voting rights from economic interest in shares) One of the early public comment letters depicted a good example of what is wrong with the proxy voting system, although the incident involved a French company listed on the Paris Stock Exchange. Guy P. Wyser-Pratte, president of  the institutional investment manager and broker-dealer Wyser-Pratte Management Co., described how possibly thousands of shares in Lagardere SCA, a media and aerospace company, were not properly transmitted during that company’s annual general meeting in April. He wrote: “I proposed two  resolutions for inclusion on the proxy statement of  Lagardere SCA. In view of the contested nature of this shareholder meeting, I took great care to electronically vote a portion of our shares, and to be present myself with an admission card and vote in person the remainder of our shares for this AGM. The electronically voted shares were duly transmitted by the usual process, via the custodians of the shares of my clients in the United States. “But on the day of the AGM [annual meeting], upon arriving for the actual vote, held in Paris on April 27, 2010, I was informed by a representative of Arlis BNP Paribas, the official registrar for the shareholder vote, Governance Center Blog no http://tcbblogs.org/governance/2010/07/10/schapiro-sec-ready-to-tackle-proxy-voting-structure/ http://tcbblogs.org/governance/2010/07/10/schapiro-sec-ready-to-tackle-proxy-voting-structure/#comments Sat, 10 Jul 2010 16:45:35 +0000 Gary Larkin http://tcbblogs.org/governance/?p=627 http://tcbblogs.org/governance/2010/07/10/schapiro-sec-ready-to-tackle-proxy-voting-structure/feed/ 1 http://tcbblogs.org/governance/2010/05/06/climate-change-disclosure-start-of-long-standard-setting-process/ http://tcbblogs.org/governance/2010/05/06/climate-change-disclosure-start-of-long-standard-setting-process/#comments Thu, 06 May 2010 21:09:47 +0000 Gary Larkin http://tcbblogs.org/governance/?p=489 http://tcbblogs.org/governance/2010/05/06/climate-change-disclosure-start-of-long-standard-setting-process/feed/ 1 http://tcbblogs.org/governance/2010/03/31/beware-sec-fishing-for-repos-in-company-10-ks/ http://tcbblogs.org/governance/2010/03/31/beware-sec-fishing-for-repos-in-company-10-ks/#comments Wed, 31 Mar 2010 21:59:39 +0000 Gary Larkin http://tcbblogs.org/governance/?p=429 http://tcbblogs.org/governance/2010/03/31/beware-sec-fishing-for-repos-in-company-10-ks/feed/ 1 http://tcbblogs.org/governance/2009/12/18/sec-wants-more-concise-disclosure-that-is-material/ http://tcbblogs.org/governance/2009/12/18/sec-wants-more-concise-disclosure-that-is-material/#comments Fri, 18 Dec 2009 16:49:31 +0000 Gary Larkin http://tcbblogs.org/governance/?p=222 http://tcbblogs.org/governance/2009/12/18/sec-wants-more-concise-disclosure-that-is-material/feed/ 3 CD&A,corporate governance,corporate governance handbook: legal standards and board practices (third edition),disclosure,Elisse Walter,Executive compensation,Mary Schapiro,materiality,proxy,proxy rules,sec,the conference board task force on executive co... The SEC has three messages for public boards and management next proxy season when it comes to disclosing policies and practices regarding executive compensation, risk and corporate governance: the Compensation Discussion and Analysis (CD&A) should be ... The SEC has three messages for public boards and management next proxy season when it comes to disclosing policies and practices regarding executive compensation, risk and corporate governance: the Compensation Discussion and Analysis (CD&A) should be ... Governance Center Blog no