Directors could be forgiven for feeling a bit insecure these days. The move toward majority voting in uncontested elections of directors has picked up so much steam that even Wachtell Lipton, diehard defenders of corporate management, acknowledged earlier this year that it is likely to become universal. Meanwhile, the New York Stock Exchange has decided […]
O'Hara Neil
Posted inFrom the Archive
Insurance Industry Finally Bites The SOX Bullet
The insurance industry has finally swallowed Sarbanes-Oxley. Four years after Congress imposed SOX on publicly traded companies, insurance commissioners last month approved a new auditing rule that does much the same for insurers—including privately held or mutual insurers, who until now have been exempt from SOX obligations. Publicly held insurers have long sparred with their […]
Posted inBoards & Shareholders
Hilton Fight Targets Binding Bylaw Changes
Shareholders and board directors at Hilton Hotels are sparring over an age-old question these days: Who’s the boss? At issue are two corporate governance resolutions filed by shareholders in the last three years—an advisory resolution in 2004 calling for more independence on the board of directors, and a binding one from this past April requiring […]
Posted inFrom the Archive
CSR Unchecked: The Risks Of Doing Good
Pioneers in the corporate social responsibility movement may win plaudits for trying to serve the public good—but without due caution, they can just as easily find that no good deed goes unpunished. Take Title VII of the Civil Rights Act, which prohibits discrimination based on race, color, religion, gender or national origin. Most U.S. corporations […]
Posted inBoards & Shareholders
Tough Climate Drives Funds To Activism
Life is hard for hedge funds these days. The industry grew up making money on carry trades, arbitrage and relative value plays. But current market conditions—a flat yield curve, tight credit spreads and low volatility—and the sheer volume of money now sloshing around in hedge funds has squeezed returns across the board. Weingarten “It’s hard […]
Posted inBoards & Shareholders
Defensive Moves When Hedge Funds Attack
As any good corporate executive knows, hedge funds can attack quickly, causing all sorts of headaches as they grab headlines and shareholder attention with calls for various reforms. Little surprise, then, that experts now recommend companies create “rapid response teams” to defend themselves. A recent memo from law firm Wachtell, Lipton, Rosen & Katz urges […]
Posted inInternal Controls
Self-Assessments: True Views On Internal Controls
Call it navel-gazing, Sarbanes-Oxley style. When SOX went into effect four years ago, the now-infamous “Section 404” required that management assess its internal control over financial reporting. And while the process may have initially focused on the documentation of those controls—considered critical to the outside auditors’ ability to sign-off on management’s assessment—corporate executives quickly began […]
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Talking Compliance With Kraton Polymers CCO
In the latest of our weekly Q&As with governance and compliance executives, we talk to Jim Nortz, chief compliance officer at $752 million Kraton Polymers Corp. An index of previous conversations is available here. What need was Kraton looking to fill when it hired you? When the company spun off from Shell, it took with […]
Posted inBoards & Shareholders
Proxy Puzzle: Tracking Shareholders, Predicting Votes
As calendar year-end companies gear up for their annual shareholder meetings, one question looms large: Will shareholders follow management’s recommendations when they vote? Companies can typically count on shareholder support for routine matters—such as electing unopposed directors, and appointing auditors for the next fiscal year—but non-routine business is another matter. If a dissident shareholder launches […]
Posted inFrom the Archive
SOX Tentacles Wrapping Around Private Equity
When Sarbanes-Oxley first took effect, private equity groups thought they had it made. Public company executives horrified at the cost of SOX compliance and its intrusive governance provisions, they figured, would try to escape the law’s purview by rushing into the arms of private equity buyers. Wender It hasn’t worked out that way. For starters, […]