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Boards and Committees

Below is some of the most recent Compliance Week coverage on issues related to boards of directors and board committees. Coverage includes issues such as board policies, audit and compensation committee practices, D&O insurance, and more. Many of these articles are columns written by our securities and governance experts, like former SEC Chairman Harvey Pitt, and Rick Steinberg, who authored Corporate Governance and the Board—What Works Best.

Business Groups Petition SEC for Tougher Proxy Rules

April 17, 2014

A coalition of business groups is petitioning the Securities and Exchange Commission to increase the threshold of favorable votes that a shareholder proposal must get before a company is obligated to include proposals on the same issue on the proxy the next year. Proposals must garner at least 3 percent of the total vote the first year to be resubmitted and 6 percent of votes in the second year. More inside.

Condoleezza Rice Joins Dropbox Board

April 14, 2014

Condoleezza Rice, former U.S. Secretary of State under President George W. Bush, has joined the board of directors of cloud file storage company Dropbox. Details inside.

Former Apple Executive Joins GoDaddy Board

March 14, 2014

GoDaddy, a technology provider dedicated to small businesses, has appointed Betsy Rafael to its board of directors.

Auditor Tenure, Internal Controls Could Be Hot Shareholder Topics

March 11, 2014

Auditor tenure, cyber-security, and the recent COSO framework for internal controls are among the top issues that shareholders are likely to ask about, and companies must be prepared to address, at upcoming annual meetings, says the accounting and consulting firm BDO USA. More inside.

Fomer General Motors CEO Joins Lockheed Martin Board

March 10, 2014

Lockheed Martin has elected Daniel Akerson, former chairman and chief executive officer of General Motors Company, to its board of directors, with immediate effect.

Apple CFO Joins Goldman Sachs Board

March 10, 2014

The Goldman Sachs Group has appointed Apple Chief Financial Officer Peter Oppenheimer as an independent director, effective immediately. He also will be a member of each of the firm's audit; risk; compensation and corporate governance; nominating; and public responsibilities committees. Details inside.

Former TransUnion CEO Joins Allstate Board

March 10, 2014

Home and auto insurer Allstate last month elected Siddharth Mehta, former chief executive officer of TransUnion, to its board of directors.

Campbell Soup Company CEO Joins MetLife Board

March 10, 2014

Denise Morrison, president and chief executive officer of Campbell Soup Company, has been elected to the board of directors of MetLife, a global provider of insurance, annuities and employee benefit programs.

Study: Cyber-security Forces Boards to Rethink Risk Oversight

March 03, 2014

Experience overseeing growing cyber-security risks is one of the top attributes boards will look for when appointing new directors, according to a new survey by NYSE Governance Services and senior executive search firm Spencer Stuart. The study also found boards wrestling with how to encourage director turnover. More survey results inside.

3M CFO Joins TRW Automotive Holdings Board of Directors

February 13, 2014

TRW Automotive Holdings, an automotive supplier, has elected David Meline to the company's board of directors. Meline joins as an independent director. Details inside.

PepsiCo Elects New Board Member

February 10, 2014

Food and beverage company PepsiCo has elected Rona Fairhead to its board of directors. She also will join the audit committee, effective March 13.

General Dynamics Elects New Board Member

February 05, 2014

General Dynamics has elected Laura Schumacher to its board of directors, effective as of Feb. 2.

Institutional Investors Petition SEC for 'Mix and Match' Board Elections

January 08, 2014

Institutional investors have petitioned the SEC to amend its rules for corporate board elections, allowing shareholders to more easily "split the ticket" and vote for any combination of management and dissident nominees. Shareholders have "extremely limited ability to vote nominees from different slates," Ann Yerger, head of the Council of Institutional Investors, which submitted the petition, said. More inside.

Corporate Boards Struggle With Technology Risks

October 22, 2013

With technology evolving at warp speed, corporate directors are ratcheting up oversight of IT risk, with one problem: Surveys find that a graying boardroom comes up lacking in tech savvy. "Directors said they're least satisfied with the talent on the board in terms of their expertise around IT," says Peter Gleason, managing director of the National Association of Corporate Directors.

Towers Watson Analysis: Director Pay Showed Moderate Increase in 2012

September 20, 2013

Total pay for outside directors at U.S. companies increased moderately in 2012, according to a recent analysis. "While director pay increases in the early years of this decade were primarily driven by rising equity values, last year's increase was fueled by growth in cash compensation," says Doug Friske, global head of executive compensation consulting at Towers Watson. Details inside.

Support for Shareholder Initiatives Ebbed, Says Glass Lewis

September 12, 2013

The 2013 proxy season lacked much of the predicted drama, and many shareholder campaigns didn't muster much support, says proxy advisory firm Glass Lewis. Improved market conditions, better corporate performance, and improved transparency may be to blame for low vote levels, although some proposals on environmental issues and political spending gained traction. More findings inside.

Survey Says Boards Troubled by Reputation Risk

May 20, 2013

After financial risk, reputation risk is the biggest concern that keeps board directors awake at night, according to the latest poll from audit firm EisnerAmper. Nearly two-thirds of the board members surveyed say it is their next biggest risk, a huge increase from when the survey was conducted last year. Directors cited compliance and regulatory risk as the third largest risk. More survey results inside.

Proxy Access Efforts Fizzle

March 05, 2013

Companies, once concerned that proxy access would throw the boardroom doors open to shareholder activists, are breathing a sigh of relief; campaigns to gain proxy access haven't really materialized, with only a handful of proxy access proposals filed so far this year. "If anything, we're actually seeing a drop-off in the level of activity," says Patrick McGurn, executive director at proxy advisory firm Institutional Shareholder Services.

First Batch of Say-on-Pay Failures Emerge from Annual Meetings

February 28, 2013

Proxy season has barely started and already shareholders at three companies, including Navistar and Nuance Communications, have turned a non-binding thumbs down to their executive compensation programs. Others, including Apple and Citigroup, are also facing shareholder scrutiny of their pay plans. More details inside.

Getting Global Ethics and Compliance on the Same Page

November 27, 2012

Building a single, global, culture is no easy task, especially at the sprawling, modern company that spans language, cultural, and political differences. During a panel discussion at the Compliance Week West conference compliance executives from Dell, Intel, and LRN exchanged ideas on developing a global corporate culture based on leadership, communication, and integrity. A summary of their discussion is inside.

Delaware Court Raises Bar on Director Liability

October 23, 2012

Delaware courts have generally set a high bar for proving that directors breached their oversight duties. A recent Delaware Chancery Court decision upholds that high standard, ruling that a derivative lawsuit can be dismissed if shareholders don't show they are acting on behalf of the company. The downside for companies, though, is that it could encourage more demands for books-and-records releases. More inside.

These Elections Are Rigged

October 12, 2012

As the November elections draw near, there are a lot of things that remind us how imperfect our system of democracy is—negative ads, for instance. But they are faultless compared to board elections. In the worst cases, directors fail to get more than half the votes, even though they are running unopposed, and keep their seats anyway. Inside, Deputy Editor Joseph McCafferty examines board elections and finds little to like.

Boards Look to Put Their Own Houses in Order

September 26, 2012

There's been no shortage of governance failures lately, so no surprise, then, that boards are looking to tidy up the boardroom. According to a recent survey from PwC, boards are working on self-improvement, including putting board evaluations to use, emphasizing continuing education, and putting in more hours. Deputy Editor Joseph McCafferty takes a closer look, inside.

Time to Split the Chairman and CEO Jobs

September 06, 2012

Among the biggest debates in Corporate America is the one over whether the chairman and the CEO should wear the same set of pants. Compliance Week Deputy Editor Joseph McCafferty looks at recent analysis from GMI Ratings, including evidence that over the long term companies that divide the jobs outperform those that combine them, and concludes that it's time to spit the CEO and chairman roles.

Are Corporate Directors Overpaid?

August 17, 2012

A survey just out from Hay Group finds that median director pay at the largest 300 public companies jumped 6.3 percent last year, from $213,774 in 2010 to $227,250 in 2011. Critics say directors work too little and fail too often to earn so much, while others say they are more engaged than ever and have a thankless job. Inside, Deputy Editor Joseph McCafferty looks at how board members earn their keep.

The Metrics System: Measuring Compliance Effectiveness

June 12, 2012

Compliance officers are under increasing pressure to demonstrate to senior officers, their boards, and regulators that the compliance function works. That means finding ways to measure compliance program effectiveness. At the Compliance Week 2012 conference, compliance executives shared their approaches to capturing and reporting compliance metrics. Details inside.

Proxy Access Efforts Starting Slow

May 15, 2012

Efforts by shareholders to win the right to nominate board members directly haven't fared well so far this proxy season. Many companies successfully petitioned the SEC for permission to ignore proxy access proposals. Of 22 proposals, only three have gone to a vote and all of them lost. Still, shareholder activists say they aren't about to give up the fight. Details inside.

Delaware Court Delivers Sharp Rebuke to Directors

November 15, 2011

The Delaware Court of Chancery warned directors in two recent decisions to put the interests of the company and its shareholders first. In one case, the court found the directors breached their duty of loyalty by allowing the company's largest shareholder to exert undue influence. In another case, the court ruled that the board erred when it issued preferred shares as a defense mechanism. Details inside.

Board Checklist: What Every Director Should Know

November 01, 2011

An increase in regulatory enforcement actions and attention to corporate governance issues is driving closer interaction between general counsels and board members. Recently, a panel of GCs discussed some practical ways to keep directors informed and offered a checklist of questions every board member should consider. More details inside.

The General Counsel's Role in Facilitating Board Evaluations

October 11, 2011

Regulatory pressures, shareholder scrutiny, and potential liability for directors has elevated the need for quality self-assessments by boards. In fact, the New York Stock Exchange requires them annually. General counsels and corporate secretaries can play a large role in facilitating board evaluations and ensuring that boards get the most out of them. More details inside.

Boards Continue to Struggle With Oversight of Risk Management

September 27, 2011

A new report suggests that boards haven't done all they would like to tackle risk-management issues. More than half of those surveyed say they don't spend enough time on them, and about the same amount say their companies still don't have a chief risk officer. Meanwhile, more than 60 percent say that personal liability risks for directors are increasing. More survey results inside.

Say-on-Pay Failures; Say-on-Pay Strategies

June 14, 2011

Companies that fail to win say-on-pay votes with shareholders this year—31 of them out of thousands at last count—now face another problem: shareholders suing the directors for disregarding their will. In truth, the lawsuits probably have little merit, experts say. But they do point to how companies might better deal with unhappy shareholders. More inside.

What the Board Needs to Know

June 07, 2011

Compliance officers increasingly report directly to the board, especially at companies that have experienced misconduct or where settlement agreements specifically require it. Inside, Douglas Lankler, chief compliance officer of Pfizer, describes his experiences updating the board on compliance issues and provides some recommendations on the best way to communicate with directors.

Board Diversity Down, Study Finds, Aguilar Weighs In

May 03, 2011

The number of minority men and white women decreased in Fortune 100 companies between 2004 and 2010, according to a new Alliance for Board Diversity study. In response to the release, SEC Commissioner Luis Aguilar said the "abysmal lack of diversity" was "unacceptable."

Shareholders Want More Transparency on Political Spending

April 19, 2011

Last year's Citizens United decision undid limits on corporate political spending. Now shareholders are demanding more disclosure on the topic, with a record number of proxy resolutions this season. "As shareholders, we just think they should be very transparent about this," says Laura Berry, executive director at the Interfaith Center on Corporate Responsibility.

Proxy Exclusions: When Close Isn't Close Enough

March 15, 2011

Companies can exclude shareholder proposals from the proxy statement if they can demonstrate that they are already doing what the investors' resolution asks them to do—an approach known as the "substantial implementation" exclusion. But it's getting a lot harder to convince the SEC to grant one. Details inside.

At Two Companies, Directors Under Fire

March 15, 2011

The SEC is pursuing enforcement actions against corporate directors in two separate cases. But rest easy; the cases seem to be isolated incidents of rogue directors stepping over the line, rather than an indication of a concerted effort by the SEC to pursue wrongdoing by board members.

This Proxy Season, Excluding Shareholder Proposals Gets Trickier

March 08, 2011

Two significant trends about which shareholder proposals companies can or cannot exclude from the proxy statement are already setting the tone for this year's proxy season; companies should read regulators' response letters carefully to stay on top of developing precedents.

From Tahrir Square to the Boardroom

March 08, 2011

"Fiduciary duty" might not be the phrase that comes to mind while watching news of uprisings across the Arab world, but when you perceive the uprisings as shareholders revolting against mis-governance—well, that should resonate with board directors quite loudly. Inside, Compliance Week Columnists Stephen Davis and Jon Lukomnik outline how corporations can prevent similar revolts here at home.

Take Advantage of the Hiatus In Corporate Governance Changes

February 08, 2011

This year, what wasn't on the agenda at the World Economic Forum in Davos might be as important as what was. The absence of executive compensation and Wall Street regulatory reform topics may signal a period of calm in corporate governance changes. Inside, Columnists Stephen Davis and Jon Lukomnik give advice on how to take advantage of the hiatus.

The Latest SOP Frequency Update

January 27, 2011

Recommendations for triennial say-on-pay votes continue to be the trend among companies that have filed their proxies so far. The big question is whether that trend will hold with some smaller companies out of the picture and companies starting to report vote outcomes.

Boards Increasingly Look to CFOs for a Reality Check

November 30, 2010

Boards increasingly lean on CFOs to provide more information about what could go wrong within the organization. The changing nature of the board-CFO relationship, in turn, is shifting the focus of the finance department overall. "If all you're doing is telling the board what is going right, you've only done half your job," says Ken Goldman, CFO of Black Duck Software.

Financial Accounting Foundation Appoints New Members

November 29, 2010

The Board of Trustees of the Financial Accounting Foundation has announced the appointment of nine new members to the Financial Accounting Standards Advisory Council (FASAC). The FASAC is responsible for advising the Financial Accounting Standards Board (FASB) on technical issues, project priorities, and other matters that affect standard setting.The following...

ISS Releases 2011 Proxy Voting Updates

November 22, 2010

They're here: Institutional Shareholder Services has unveiled its 2011 updates to its benchmark proxy voting guidelines.The U.S. policy updates cover new policies to address shareholder votes on say-on-pay frequency and on golden parachute provisions created by the Dodd-Frank Wall-Street Reform and Consumer Protection Act, as well as director attendance, shareholder rights...

Podcast: Monitoring, Advisory Duties of the Board

November 19, 2010

We talk with Rani Hoitash, business professor at Bentley University, about how boards can strike the proper balance between monitoring governance and providing strategic advice.

FAF Names Four New Board Members

November 17, 2010

The Financial Accounting Foundation, an independent, private-sector organization responsible for the oversight of the Financial Accounting Standards Board and the Governmental Accounting Standards Board, has elected four new members to its board of trustees. Each of the appointments is for a five-year term that begins in January 2011. Among the...

IFAC Appoints New President

November 05, 2010

The International Federation of Accountants (IFAC), the global organization for the accountancy profession with members and associates in 125 countries, has appointed Göran Tidström of Sweden as president of IFAC for a two-year term ending in November 2012. The IFAC Council also approved the nomination of Warren Allen of New...

Great Plains Energy Names Chief Compliance Officer

November 04, 2010

Great Plains Energy, the holding company of Kansas City Power & Light Company, has promoted Ellen Fairchild to vice president, corporate secretary and chief compliance officer.In her new role, Fairchild will be responsible for leading KCP&L's compliance and environmental departments. In addition, she will continue her responsibilities with the board...

XBRL Names New President, CEO

November 02, 2010

The board of XBRL US, the national consortium for XML business reporting standards, announced this week that it has named Campbell Pryde, current Chief Standards Officer and head of development, as president and CEO. He will assume the positions from Mark Bolgiano, who will be stepping down to lead technology...

A.M. Castle Elects New Independent Board Member

November 01, 2010

A.M. Castle & Co., a global distributor of specialty metal and plastic products, value-added services and supply chain solutions, has appointed James "Jim" Kelly as an independent director to its board of directors on Oct. 28.With more than 34 years of experience in engine manufacturing, Kelly retired in March from...
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