News

6 more ‘C’mon, man!’ moments

Is this U.K. Shareholder Spring III?

Missing Links in Regulators’ View of Compliance Programs

Board of Director Line of Sight Into FCPA Violations

A board of directors must set the appropriate tone at the top for any organization. Yet it must do more than simply set the tone, sit back, and do nothing. A board needs to take a hard look at the information it is being presented and tell management to stop if executives approaching a line that could cross into illegal conduct. This week, FCPA blogger Tom Fox explores how a board can spot when the company might be moving toward an FCPA violation.

What Really Serves Shareholders’ Best Interests

Companies Face New Twists in Shareholder Proposals

Boards Show More Interest in Cyber-Security Threats

Boards Look to Enhance Oversight of IT Risk

Corporate directors would like to devote more time to IT strategy and cyber-security risk management, but many say they still are not receiving an adequate level of information from management in these areas to provide effective oversight. Directors also admit, in two new surveys, that they don’t have enough confidence in their IT expertise to oversee cyber-security risks.

Starboard Ousts Darden’s Entire Board

Darden Restaurants formally announced this week that it has elected all twelve of activist hedge fund Starboard Value's nominees to its board of directors; the board also appointed Jeffrey Smith as independent non-executive chairman. The ousting of Darden’s entire board caps a one-year heated battle between Darden and a group of disgruntled activist investors, who issued a scathing 294-page, soup-to-nuts report on how the food chain can—and should—improve its operations. Details inside.

Groupon Appoints New General Counsel

Groupon has appointed Dane Drobny as general counsel and corporate secretary, effective July 7. The company also named Ann Ziegler as an independent director, effective immediately. Details inside.

Kodak Alaris Appoints New Board of Directors, General Counsel

Kodak Alaris this week appointed several new non-executive directors to its board of directors, continuing with its expansion since the company's separation from Eastman Kodak in September 2013. The company also appointed John O'Reilly as general counsel and company secretary. Details inside.

Managing Cyber-Security Risk:Who Cares, and Who Doesn’t

Plenty of voices are now churning out good advice on effective oversight of cyber-security risk, Compliance Week Editor Matt Kelly writes. The only problem? Investors don't yet seem to care that much about it. That leaves boards, compliance officers, privacy directors, and even regulators struggling to move forward with an effective approach to the problem. More inside.

Aguilar: Boards Must Take More Active Role in Cyber-Security

SEC Commissioner Luis Aguilar warned boards not to pass the buck on cyber-security and said companies should adhere to voluntary government guidelines on data privacy and security. During a speech at the New York Stock Exchange last week, he said boards should also create a separate enterprise risk committee so that they can better oversee a company's preventative measures and response plan. More inside.

Stein Urges Investor-Focused Reports, Board Election Reform

The Securities and Exchange Commission's review of disclosure requirements must be focused on investors, Commissioner Kara Stein said during a speech last week. In her remarks, she also supported calls to amend rules for contested corporate board elections, allowing shareholders to vote more easily for any combination of management and dissident nominees. More inside.

Target Chairman Resigns in Wake of Data Breach

Five months into the recovery of its massive data breach, retail giant Target announced today the resignation of its long-time President and Chief Executive Office Gregg Steinhafel. He also will step down as chairman of the board of directors, effective immediately. Details inside.

Lions Gate Settles With SEC Over Takeover Defense Reporting Lapse

Movie studio Lions Gate Entertainment has agreed to pay a $7.5 million fine to settle charges by the Securities and Exchange Commission that it failed to disclose to investors an important aspect of its effort to thwart a hostile takeover bid by activist investor Carl Icahn. As part of the settlement, the company agreed to admit wrongdoing. More inside.

Study: Boards Looking to Gain More Cyber-Security Expertise

Experience overseeing growing cyber-security risks is one of the top attributes boards will look for when appointing new directors, according to a new survey by NYSE Governance Services and senior executive search firm Spencer Stuart. The study also found boards wrestling with how to encourage director turnover. More survey results inside.

3M CFO Joins TRW Automotive Holdings Board of Directors

TRW Automotive Holdings, an automotive supplier, has elected David Meline to the company's board of directors. Meline joins as an independent director. Details inside.

Proxy Advisory Firms Release 2014 Voting Policies, Strategies

Proxy advisory firms Institutional Shareholder Services and Glass Lewis have released changes to their proxy voting policies for 2014. While the firms aren't introducing any radical changes, companies and boards will have to prepare for several shifts if they want to avoid negative votes, including changes to how the firms view pay-for-performance and compensation committee independence. Details inside.

Many Activist Investor Groups Keep Coming Back for More

Boards and managements are often tempted to consider a matter closed once they have engaged with an activist shareholder group, especially if they have made some concessions. Yet such an approach can backfire—because many activist investors come back for a second bite of the apple. "These investors tend to be aggressive, well-capitalized, and thoughtful. They won't just go away," says Spencer Klein, a partner at law firm Morrison & Foerster.

Towers Watson: Director Pay Showed Moderate Increase in 2012

Total pay for outside directors at U.S. companies increased moderately in 2012, according to a recent analysis. "While director pay increases in the early years of this decade were primarily driven by rising equity values, last year's increase was fueled by growth in cash compensation," says Doug Friske, global head of executive compensation consulting at Towers Watson. Details inside.

Less Support for Shareholder Initiatives This Proxy Season

The 2013 proxy season lacked much of the predicted drama, and many shareholder campaigns didn't muster much support, says proxy advisory firm Glass Lewis. Improved market conditions, better corporate performance, and improved transparency may be to blame for low vote levels, although some proposals on environmental issues and political spending gained traction. More findings inside.

Studies Highlight Compliance Obstacles and Budget Trends

Two new benchmarking surveys paint a mixed picture of compliance executives' success. The good news: More of you answer directly to the board or CEO, rather than the general counsel. The bad news: Most of you still feel like you don't have the resources you need to do your jobs well, and finding the right metrics to help understand future risks is as elusive as ever. Full coverage inside.

Winning Over Shareholders on Compensation Practices

This proxy season shareholders are continuing to pressure companies to adopt more pay-for-performance practices. With changes to proxy advisers' voting recommendation policies, the emergence of "say-on-pay" lawsuits, and other factors, many companies are feeling the heat. Inside, guest columnist Arden Phillips, governance officer at Washington Gas Light Co., provides some tips on gaining shareholder support for compensation practices.

When Stock Buybacks Get More Complex So Does the Accounting

Companies flush with cash are conducting increasingly complex stock buybacks, some with thorny accounting implications. Buybacks with forward repurchases, written put options, and those involving derivatives, for example, can invite accounting scrutiny. "Essentially you are pulling very complicated accounting rules down upon yourself," says Bruce Pounder, director of professional programs at training firm Loscalzos.