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.

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...
 

Rayonier Elects New Board Member

November 01, 2010

Rayonier, an international forest products company, has elected Mark Gaumond to its board of directors, effective immediately.Gaumond retired earlier this year as senior vice chair of markets for Ernst & Young, where he oversaw the assurance, tax, transaction and advisory service lines in the Americas region. Previously, he was the...
 

Time Warner Appoints New Board Member

October 28, 2010

Time Warner has elected Paul Wachter to its board of directors, effective immediately.Wachter is the founder, CEO and a director of Main Street Advisors, an investment advisory services company.With Wachter's election, the Time Warner's board now has 13 members, 12 of whom are independent.
 

ISS Draft 2011 Proxy Voting Policies Out For Comment

October 28, 2010

Those involved in proxy voting take note: Here's your last chance to weigh in on Institutional Shareholder Services' voting policies for the upcoming proxy season.ISS has opened the annual public comment period on its 2011 draft proxy voting policies to gather input from institutional investors, corporate issuers, and others on...
 

Morgan Stanley Elects New Board Member

October 25, 2010

Global financial services firm, Morgan Stanley, has elected James Owens, chairman of Caterpillar, to the firm's board of directors, effective Jan. 1, 2011. He also will serve on the nominating and governance committee. Owens served as chairman and CEO of Caterpillar from 2004 to June 2010 and is serving as...
 

UBS Promotes Chief Risk Officer

October 22, 2010

London-based UBS has promoted its group chief risk officer, Philip Lofts, to chief executive officer, UBS Group Americas. Assuming his role as group chief risk officer will be Maureen Miskovic, who also will serve as a member of the group executive board. The appointments will be effective Jan. 1, 2011.Miskovic...
 

Podcast: Women Directors and Governance

October 15, 2010

We chat with Bonnie Gwin, a partner at recruiting firm Heidrick & Struggles, about the path women take into the corporate boardroom and their governance concerns once they get there.
 

New Director at Hartford Financial Services Group

October 13, 2010

The Hartford Financial Services Group, an insurance and wealth management company, has announced in an 8-K filing the election of Kathryn Mikells to its board of directors. She also will serve on the legal and public affairs committee; compensation and personnel committee; and finance, investment and risk management committee.Mikells was...
 

Edgar Online Names Interim CEO

October 11, 2010

EDGAR Online, a provider of XBRL (eXtensible Business Reporting Language) filing services, datasets and analysis tools, dropped a bombshell recently: president, chief executive officer, and board member, Philip Moyer, resigned from his positions on Sept. 30, citing "personal reasons."Interestingly, his resignation follows the departure of Chief Financial Officer John Ferrara,...
 

KB Home Elects New Board Member

October 08, 2010

Homebuilder, KB Home, has elected Barbara Alexander to its board of directors. She also will serve on the board's audit and compliance committee.Her appointment brings the total number of directors to 10, nine of which are independent. Alexander has been an independent consultant since January 2004. Prior to that, she...
 

NIRI Elects New Board Chairman

October 04, 2010

The National Investor Relations Institute has elected Douglas Wilburne, vice president of investor relations for Textron, as the 2011 chairman of its board of directors. He succeeds Brad Wilks, CEO and managing director of Sard Verbinnen & Co.During his tenure as NIRI chair, Wilburne said he plans to focus on...
 

Hi Score Corporation CFO Appointed to Board

September 24, 2010

Peter Ruggeri, chief financial officer of Hi Score Corporation, a Miami, Fla.-based supplier of eco-friendly lighting products, has been appointed to the company's board of directors. He replaces Joseph Anounou, a member of the board since June, who has resigned from his position to pursue other opportunities.Ruggeri began working with...
 

Eastman Kodak Appoints New Board Member

September 22, 2010

Eastman Kodak Company announced that Kyle Prechtl Legg, former Chief Executive Officer of Legg Mason Capital Management, was elected to the company's board of directors, effective immediately. In addition, she will serve on the corporate responsibility and governance committee, as well as the executive compensation committee.Legg, whose election brings the...
 

Boards Turn to Self Evaluations to Regain Trust

September 21, 2010

The performance evaluation may be a standard tool in most areas of corporate life—but in the boardroom, collars are still a little stiff to the idea of turning a spotlight on the annual performance of individual directors.
 

Iron Mountain Appoints New Board Member

September 20, 2010

Iron Mountain Incorporated has appointed Paul Deninger, a vice chairman of Jefferies & Company, the principal operating subsidiary of Jefferies Group, to its board of directors. Deninger is currently a vice chairman of Jefferies, a global securities and investment banking firm. He joined the company in 2003 after it acquired...
 

Proxy Access Rules Effective Nov. 15, but Who Is Affected?

September 16, 2010

At last, Corporate America finally has the answer to a question it's been awaiting for weeks: When will the Securities and Exchange Commission's new proxy access rule take effect?The answer—Nov. 15.—arrived with the rule's publication in the Federal Register on Sept. 16. That means shareholder nominees will be allowed at...
 

Unsettling Questions on BP, Boards, Risk Management

September 14, 2010

With the Deepwater Horizon oil well finally capped, BP has largely dropped off the nation’s front pages and dwindled to an afterthought on cable TV gabfests. But just as it may take years to restore the waters and shores of the Gulf of Mexico, governance consequences flowing from BP’s 2010 travails are certain to be long-lasting—and may well spatter public companies across the United States. Here is sample of the BP buzz among market players, and how the fallout may affect your corporate board, your investors, and your regulators.
 
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