Stephen Davis and Jon Lukomnik

Watching Citigroup mishandle a shareholder revolt over executive pay brings to mind one of history’s most colorful parables about chief executive hubris and recovery. The year was 483 B.C.; Persian emperor Xerxes was bent on sending a vast army to attack Athens and its allies. But the pontoons his engineers hastily assembled and sent across […]

Deep underground, tectonic plates are continuously shifting, generally unnoted by all but the most dedicated geologists. That is, until those small, inexorable changes manifest into literally earth-shaking events: volcanoes, earthquakes, tsunamis, new land masses, and majestic mountains.  In the world of corporate governance, fiduciary obligation underpins the legal responsibilities of everyone from corporate directors to […]

It’s only year two of broadly-mandated “say-on-pay” votes by investors at U.S. public companies, but already questions are arising about whether the exercise is “working.” Will shareowners veto more plans this year? Will proxy advisers grab even more influence? Will compensation continue to be contentious and perceived by many as unfair? Will more boards reach […]

We’re on the verge of a revolution in corporate reporting. Everything—the what, how, who, to whom, and when—could change. You already know the increased reporting your company does. Some of it is mandated; think of the Dodd-Frank Act requirements for increased public company disclosure, either planned or already enacted, in areas as varied as executive […]

The best perspective on what lies ahead in corporate governance might just be from the pilot’s seat of the Duke of Cambridge’s air-sea rescue helicopter. Why? We’ll get to that in a moment. First it is time for that dread exercise, accountability. Each year we try to predict trends emerging in corporate governance over the […]

Auditors are once again squarely in regulators’ crosshairs in ways not seen since the frenzied days before and after adoption of the Sarbanes-Oxley Act in 2002. In the United States, the Public Company Accounting Oversight Board—itself a product of SOX—is testing market appetite for expanded auditor reporting, including the disclosure of audit partner names in […]

For more than a generation, institutional investors have preached the gospel of aligning executive compensation with performance. When results disappointed, we redoubled our efforts. As a result, we have gone from preferring cash to options to performance-vesting options to restricted shares. We have researched vesting periods and grant dates. We have prompted executive pay plans […]

Quick—free associate the word “corruption.” If you are anywhere near a compliance job, you might immediately think “Foreign Corrupt Practices Act,” as in the federal law that outlaws bribery in distant climes. But the truth is that corruption isn’t only about graft in far-flung corners of a corporation’s field operations. It can be close to […]

The venom directed at proxy advisory firm ISS—and to a lesser extent, its competitor Glass Lewis & Co.—has become so vicious that it now poisons discourse about governance. Perhaps this first proxy season with widespread say-on-pay shareholder votes caused the commotion. Perhaps the anger is a reaction to the shift in power to shareowners and […]

Call it a stealth development in U.S. corporate governance. Media, investors, and boards have been scrambling to handle—or head off—annual meeting uprisings over executive pay. But beyond the headlines, a revolutionary structural change is quietly sweeping through boardrooms. The shift can be summarized in one concise truth: that the overwhelming U.S. practice is no longer […]