Stephen Davis and Jon Lukomnik

The first rule of care and feeding of directors: no surprises. A major one lurks in the new revenue recognition rules, due to be implemented in 2017. Early surveys show most boards and audit committees have little idea what is looming on the horizon. This week, columnists Stephen Davis and Jon Lukomnik offer advice on keeping boards in their comfort zone during what portends to be a tumultuous time.

Shareholder activism is always simmering in the United States and overseas, so predicting more of that in 2015 is not news. Compliance Week columnists Stephen Davis and Jon Lukomnik, however, have provocative predictions about how activism will unfold next year—including potentially toxic fights with Corporate America, pressure on proxy advisory firms, and more investor collaboration.

The complaint is a common one in governance circles: everyone talks about the importance of long-term value, and then follows the market’s mantra for short-term results. Why? Executive compensation tied to the wrong metrics doesn’t help. Inside, Compliance Week columnists Stephen Davis and Jon Lukomnik pick apart the fallacy of tying pay to Total Shareholder Return and give examples of metrics that drive future growth instead.

Regulators are looking to curtail abuses by proxy advisory firms with new rules that include a mechanism for companies to complain about unfair treatment. While some CEOs and boards, many which have long loathed proxy advisers, may be eager to use these new tools as weapons against them, columnists Stephen Davis and Jon Lukomnik urge caution. Inside, they explain the new rules and potential consequences of misusing them.

The lack of transparency into what happens inside public company boardrooms has long frustrated investors. In no other corporate governance relationship is the information asymmetry so stark and, perhaps more importantly, so difficult to change. Senior management can direct line managers to report whatever data and analysis is necessary for management oversight. Directors can ask […]

Cyber-security suddenly is everywhere. Beginning with the U.S. Department of Commerce’s release of its long-awaited National Institute of Standards and Technology (NIST) framework for cyber-security earlier this year, we have seen a myriad of regulators use the bully pulpit to turn up the pressure for companies to adopt better security measures.   SEC Commissioner Luis […]

For nearly thirty years, until his death in 1955, Albert Einstein searched for a unified theory of physics. Confronted with an incomplete understanding of the universe, he also was motivated by profound antipathy toward quantum mechanics—the theory that says the universe is created of microscopic waves and particles that are somewhat interchangeable and whose location […]

Attention board members, investor activism and its widening influence are here to stay.  Activist investors have become an everyday presence in the business news headlines, affecting companies as iconic as Apple and Sotheby’s and industries as varied as restaurants (Darden) and pharmaceuticals (Allegan). Nonetheless, many directors may not yet appreciate that such shareowners augur change […]

In past years, our eyes glazed over during proxy season from so much focus on a series of corporate-specific issues Questions put to shareholders at individual companies often had little bearing on the larger trends and challenges facing corporate America. Was the dilution contemplated by one company’s incentive stock option plan appropriate? What about splitting […]