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.

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.
 

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.
 

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.
 

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.
 

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.
 

SEC Adoption of Proxy Access Draws Mixed Reactions

August 31, 2010

Making the fourth time a charm, the Securities and Exchange Commission finally adopted a rule to give shareholders access to include a limited number of nominees to the board of directors in a company’s proxy materials.
 

How Governance, Investor Relations Will Combine in 2011

August 17, 2010

As public companies prepare for the 2011 proxy season, investor relations officers and other senior executives will need to re-invent themselves. All will confront a greatly enhanced world of shareholder communications stemming from the Dodd-Frank Act, the SEC’s new proxy disclosure rules, and its proposed “proxy plumbing” reform bound to streak across the stage in 2011.
 

Podcast: Activism in the Boardroom

August 13, 2010

This week we talk with Lucy Marcus, CEO of Marcus Venture Partners, about activist shareholders and board directors and how companies can better work with them.
 

How to Improve Governance at Small Companies

August 10, 2010

Nell Minow, the editor and co-founder of The Corporate Library, has a way with words. Corporate directors, she once said, “are like sub-atomic particles. They act differently when they are being observed.”
 

Audit Committee Checklist: Compliance Programs

July 27, 2010

In recent years, audit committee members have seen the scope of their responsibilities expand in all directions—but none so much as in their oversight of ethics and compliance.
 

Audit Committee Checklist: D&O Coverage

July 27, 2010

Audit committees have many concerns to worry about, yes, but one very prosaic matter trumps all the others: that the directors themselves have enough insurance to insulate them from lawsuits.
 

Audit Committee Checklist: Anti-Trust Reviews

July 20, 2010

Anti-trust concerns are suddenly back in vogue for federal regulators, and by extension for board directors as well.
 

Audit Committee Checklist: Good Disclosure

July 20, 2010

Confession is good for the soul, and likewise, disclosure is good for the audit committee. And unfortunately, knowing exactly what to say can be difficult for both.
 

The Risk of Losing the Retail Investor

July 20, 2010

Imagine you’re an individual investor with shares in Diebold, the maker of ATMs and security systems. You’ve just sat down at the company’s annual shareholders meeting on June 2. Back stage, just minutes before taking the podium, CEO Thomas Swidarski learned the company’s share price has dropped 30 percent—in six seconds! You turn off your Blackberry so you’re no longer connected to the outside world.
 

Audit Committee Checklist: FCPA Compliance

July 13, 2010

Audit committees have many concerns on their plates these days. But none, it seems, are as vexing and consequential as the Foreign Corrupt Practices Act.
 

Breaking Down the Risk-Assessment Process

June 15, 2010

The Compliance Week 2010 conference provided a series of “conversations” on risk assessment that revealed how far along leading companies have come in implementing that process, and gave some valuable insight into how executives can improve the information that boards of directors need to exercise their risk-management role.
 

Risk and Audit Information Directors Want to Hear

June 08, 2010

Board directors can be a demanding lot. For the compliance officers trying to report the right information to them about risks, compliance, and other elusive data, working with directors can be that much harder.
 

Podcast: Disclosure of Boardroom Diversity

May 28, 2010

This week, we chat with Jessica Lochmann of the law firm Foley & Lardner about the SEC’s new rules on disclosure of boardroom diversity and what a company considers when it recruits director candidates.
 

Seeking Governance Inspiration—From Sweden?

May 11, 2010

You may not have noticed, but lots of investor eyes are turning these days to a Swedish model—and no, we don’t mean a blonde strutting the catwalk. Instead, the model they like is the Swedish way of nominating board members at public companies.
 

Podcast: Board Reforms in Dodd Bill

March 23, 2010

Compliance Week editor Matt Kelly talks with Ken Daly, CEO of the National Association of Corporate Directors, about proposed corporate governance reforms in Washington.
 

Analyzing ‘Corporate Risk Oversight Principles’

March 09, 2010

It’s way too early for nostalgia about the financial crisis. But one of the most telling anecdotes coming out of this period was from John Thain, remarking to the Wall Street Journal on his time as CEO of Merrill Lynch. “Merrill had a risk committee,” he asserted. “It just didn’t function.”
 

Providing Directors the Risk Information They Need

February 17, 2010

My column last month outlined the kind of information boards of directors need to execute their responsibilities, viewed from the director’s perspective. This month I want to continue that discussion, but looking at the opposite side of the coin: what information chief executives, chief compliance officers, chief risk officers, and other top executives should be providing to help directors in their oversight activities.
 

Making 2010 a New Start for Shareholders

January 20, 2010

The past decade wasn’t kind to America’s investors. So why not turn the table and make the 2010s the “decade for the shareholder”?
 

Podcast: Splitting CEO & Chairman Roles

December 25, 2009

Compliance Week editor Matt Kelly talks with Aiyesha Dey, an accounting professor at the University of Chicago, about new research casting doubt on the wisdom of splitting the chairman and CEO roles.
 

What’s Coming in Governance in 2010

December 15, 2009

Adhering to a year-end tradition, once again I offer a wish list of governance enhancements I’d like to see in the coming year. So, with fireplace aglow and coffee-mug close by, here’s what we can hope for in 2010.
 

Recapping 2009 Investor Trends; Previewing 2010

December 15, 2009

Corporations saw significant change in 2009 in how they communicate with shareholders, thanks to a confluence of emerging trends: changes in how the markets work, regulations affecting corporate disclosure and the proxy process, and an upsurge in investor activism. Companies need to take stock of what’s happened and reconsider their communications strategies going in 2010 and beyond.
 

When the Chief Audit Executive Serves Two Masters

Lione Susan December 08, 2009

I saw that the Institute of Internal Auditors recently recommended that a company’s chief audit executive report functionally to the board of directors and administratively to the CEO. The IIA also says the board should approve the audit executive’s performance evaluation, pay, and bonus. I have two questions about all this.
 

Preparing for the Big Headache of Spring 2010

November 17, 2009

What lies ahead for the 2010 proxy season and annual meeting, and why should you care? Simply stated, public companies will face the greatest challenges that most have experienced in recent memory.
 

Board Role in Succession Planning

November 10, 2009

Once upon a time, choosing a successor to the CEO wasn’t much of a responsibility for the board of directors. Today it’s one of the most important tasks the board has—and one the board should protect carefully, before shareholder activists hijack the process.
 

Advocating New Best Practices for Governance

November 10, 2009

Corporate boards and institutional investors are bracing for a tide of corporate governance changes after the financial crisis. We (and others) have written reams about majority voting, the end of broker-dealer voting in director elections, say-on-pay, and shareholder proxy access. How you feel about those issues largely depends on what hat you wear in the vast corporate governance realm.
 

Preparing for Broker Vote Change

November 03, 2009

The elimination of broker votes in director elections may well to tip the scales of power from corporate boards to shareholders. Companies should prepare now so they won’t be left dizzy by the rule change.
 

A Trio of Academic Papers for the Real World

October 13, 2009

We both live in two worlds: The workaday reality of investing, and the sometimes-rarified air of academia. Often those two realities are disjointed, existing separate and apart as if they were different dimensions in a science fiction novel. But every once in a while we’re struck by a little-noticed academic paper that offers insights both timely and important to Compliance Week readers. Recently we discovered three such pieces of research.
 

Splitting the Chair, CEO Role: Practical Considerations

September 29, 2009

From shareholder pressures to recent regulatory and legislative reform, the contentious question of splitting the chief executive officer and board chairman roles may soon become a reality for U.S. companies.
 

All Our Governance Mistakes, in One News Cycle

September 22, 2009

Like most people, I read the daily news … and, unfortunately, little shocks me anymore. Recently, however, I was especially distressed to read—in just one day—how many major companies were found to have gone terribly wrong! The reports shed light on what goes on behind closed doors, and how these organizations’ tone at the top had become so tainted.
 

The Shareholder Rights Express Rolls On

August 18, 2009

Well, the shareholder rights express continues to roll down the track.
 

Cloaked in Mystery, ETFs Arrive as Investor Kingpins

August 18, 2009

The world of investor relations began shrinking several years ago with the decline of sell-side analyst research. Today, the game changer is the buy-side's growing move away from analyzing individual companies in their portfolios and toward the use of asset management. This should alarm any investor relations officer, senior managers, and boards of directors.
 

Management’s Role in Merrill Lynch Downfall

July 21, 2009

Many people have analyzed the meltdown of platinum-branded financial institutions, amazed at how quickly they went from supposedly sound and powerful to being taken over or filing for bankruptcy. The lessons to be learned, and hopefully not forgotten, are far-reaching at several levels.
 

Your Guide to Creating a World-Class IR Function

July 21, 2009

A Fortune 500 mining company client recently asked me what constitutes a “world-class” investor relations function. That’s a question I periodically pondered during my 24 years as CEO of the National Investor Relations Institute, certainly, but I had never explored it in any formalized manner.
 

Take Heed: Investors Empowered on Proxy Access

July 14, 2009

The Great Recession has now produced the Great Unfreezing. For years shareowners and boards sparred over the same governance issues, frozen like ice into the same opposing positions. But the financial crisis, economic meltdown, and political change have combined to break the old mold of governance battles in surprising ways.
 

What’s Coming Round for Boards of Directors

June 09, 2009

What should we call the looming changes in how directors are elected and overseen at public companies? A seachange? A paradigm shift? A whole new ballgame?
 

What Drives a Successful Compliance Committee?

May 12, 2009

As risk management intensifies and Washington considers all manner of new regulatory requirements, the wisdom behind establishing and operating a compliance committee continues to get stronger.
 

The Changing Role of Directors in Difficult Times

May 05, 2009

Setting a proper tone at the top has not been easy for corporate boards since the Sarbanes-Oxley era began—and it’s only grown harder as the tone everywhere else has turned decidedly sour.
 

A “Best Practice” Lesson: Don’t Follow the Herd

April 21, 2009

When you work with senior executives and boards of directors as long as I have, troubling behaviors that directly affect corporate performance become all too clear. And a number of major corporate failures we’ve all seen in the news can be traced back to these behavioral characteristics. I’ve coined names for these bad habits. Worst is “keeping up with the Joneses” syndrome, followed by its two corollaries: “best practices” and “groupthink.”
 

Incoming CalPERS Exec: Give Shareholders a Voice

March 10, 2009

In the latest of our conversations with corporate governance movers and shakers, we catch up with Anne Simpson. Simpson recently resigned her post as director of the International Corporate Governance Network in London, to take over the corporate governance function at the California Public Employees Retirement System. Excerpts of our conversation are below.
 

Governance Challenges Facing Corporate Boards

January 20, 2009

Not long ago, I was interviewed for RiskCenter and the Global Association of Risk Professionals, where I had the opportunity to discuss a range of governance challenges faced today by boards and management. As a change of pace from my usual monthly essay, I'm going to share some of those thoughts again here in an edited version.
 

Business Judgment Rule: Feeling New Pressures?

January 13, 2009

If corporate boards were granted a New Year’s prayer for 2009, there is no doubt what it would be: “May God preserve the business judgment rule!”
 

Risk Management and the Board of Directors

Wachtell, Lipton, Rosen & Katz November 25, 2008

Excellent briefing on the board's role in risk management, from the law firm of Wachtell, Lipton, Rosen & Katz. Covers all the basics, from state law fiduciary duties to stock exchange requirements, while also outlining some "common areas" of risk.
 

A Well-Drafted D&O Insurance Policy

November 25, 2008

Having sufficient director and officer insurance has always been a worry for senior executives, but lately the focus of that concern has expanded to include compliance officers.
 

Transparency, Disclosure Should Be Top SEC Priorities

November 18, 2008

One has to wonder if the old Shakespearean saying “timing is all” will become a guiding factor in which direction the Securities and Exchange Commission will go with a new administration and Congress.
 

Dept. of Labor to Figure Prominently in Coming Year

November 11, 2008

Now that the election is over, get ready for a deluge of predictions on the coming wave of corporate governance legislation and regulation.
 
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