Event Summaries 2009 - 2010
GOVERNANCE
From Compliance to Excellence: An In-Depth Look at Board Evaluations
Moderator Bill Poduska, an independent business consultant and member of multiple corporate boards, kicked off the panel discussion at NACD New England’s January 12, 2010 Breakfast Event by voicing a sentiment that seemed to resonate with everyone in attendance: evaluating director performance is a hard thing to do. “Most boards operate in a very collegial way, which makes it very difficult to do objective, intellectual and thoughtful evaluations of our peers,” he said. Sharing their experiences in overcoming these difficulties were three panelists with extensive backgrounds serving as directors and board advisors. CLICK HERE to view the slide presentation.
December
GOVERNANCE
The Government's New Role in the Corporate Boardroom
Ron Logue, Chairman and CEO of State Street Corporation, and James Segel, Special Counsel to House Financial Services Committee Chairman Barney Frank shared their insights on how the financial crisis has changed the federal government’s relationship with Corporate America. Ron Logue advised corporate directors to insist on more open and transparent board processes, to ask the toughest questions, and to take the time necessary to understand the most challenging issues in executing their governance responsibilities. CLICK HERE to view Mr. Logue's slide presentation.
November
GOVERNANCE
Breakfast With The Delaware Chancery
Breakfast event speaker Stephen P. Lamb stepped down as Vice Chancellor of the Delaware Chancery Court in June 2009. In his position as one of five jurists on the primary court for disputes involving Delaware corporations, Vice Chancellor Lamb has heard many of the most important recent cases regarding standards and practices in corporate governance. Before being appointed to the Delaware Chancery bench in 1997, he practiced for a number of years in the area of corporate and securities litigation in Delaware, at first with Skadden, Arps, Slate Meagher and Flom, and then as a principal in several smaller firms.
COMPENSATION
Updates in Executive Compensation
Risk
ERM - A Solution for Every Organization
Caturano and Company - Mar 02, 2010
Business risk management is something that most managers will say they do on a daily basis as part of their job. When probed to explain the process, however, the answers get less specific. While most other areas of business have seen the need to establish mature, sustainable and measurable processes, business risk management tends to still be done on an intuitive level, with no real data to support or validate its effectiveness. The advance of technology, the accelerating pace of business, globalization, regulation, increasing financial sophistication and the uncertainty of the economy all contribute to the growing number and complexity of risks. To say these are managed intuitively without structure, reporting and measurement can no longer be the best way to approach understanding and managing these risks.
SEC Modifies Approach to Advice on Risk
Hinckley, Allen & Snyder LLP - Feb 25, 2010
In October 2009, the Securities and Exchange Commission, Division of Corporation Finance (the “Staff”) issued Staff Legal Bulletin No. 14E (the “Bulletin”) regarding Rule 14a-8(i)(7) of the Securities Exchange Act of 1934. The Bulletin effectively reverses the Staff’s prior guidance, which allowed companies to exclude most shareholder proposals pertaining to internal assessments of risks, such as health, financial or environmental, on the basis that the proposals and supporting statements related only to the evaluation of such risks by the company, which the Staff previously viewed as relating to a company’s ordinary business operations.
Proxy Disclosure and Governance in an Increasingly Transparent World
Radford - an Aon Consulting Company - Feb 25, 2010
The ongoing march toward greater disclosure of, and investor engagement in, key pay and governance issues at US public companies is accelerating again in 2010. With the proposal and/or adoption of substantive legislative, regulatory and policy changes, Congress, the Securities Exchange Commission (SEC) and investor advisory groups have transformed the landscape on which company decisions about pay and governance are made.
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Compensation
Relative Total Shareholder Plans - Performance-Based Equity Design
Radford - an Aon Consulting Company - Feb 25, 2010
The most prevalent equity incentive vehicle in use today is still the stock option, particularly in
the technology and life sciences sectors. However, options have been under great scrutiny in recent years. Backdating investigations, debate over accounting treatments, underwater option repricings and outsized executive grants have all brought this equity vehicle into the harsh spotlight. Option proponents argue they remain the most effective and motivational incentive for high-growth and high-potential companies, but pressure from detractors has lead to increased use of time-vested restricted stock in lieu of options.
Market Stock Units: Another Arrow in the Equity Compensation Quiver
Radford - an Aon Consulting Company - Feb 25, 2010
Companies are continuing to look at new and more sophisticated types of equity that better support compensation objectives while increasing alignment with shareholder interests. In the current business environment, traditional equity vehicles are flawed. Stock options are highly sensitive to strike price and exercise timing, and are vulnerable to falling underwater, creating employee morale and retention issues. Time-based restricted stock, on the other hand, delivers value with minimal linkage to performance – vesting whether or not the company has been successful.
SEC Adds New Compensation Disclosure Requirements
Radford - an Aon Consulting Company - Feb 25, 2010
On December 16, 2009 the Securities Exchange Commission (SEC) expanded the disclosure rules it originally laid down several years ago, adopting several new regulations related to executive compensation and board structure. The new regulations pertain to the relationship between public company compensation policies and the potential risks engendered by those policies, the qualifications and relationship of the board to management, how equity values are reported, and the relationship between companies and the compensation consultants they retain (see Figure 1). This Radford Alert provides an overview of the new rules, as well as our perspective on the impact to clients.
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Audit
Audit Committee Brief
Deloitte - Mar 10, 2010
Recent economic events have heavily influenced the SEC’s scrutiny of financial reporting. At the 2009 AICPA National Conference on Current SEC and PCAOB Developments, SEC Director of Enforcement Robert S. Khuzami said that during fraud investigations, his division is evaluating whether boards of directors and audit committees have properly discharged their duties. This evaluation includes determining whether red flags and other information that may have identified fraud were recklessly ignored.
Why Benchmark your Organization's Operations?
Caturano and Company - Mar 02, 2010
Companies are experiencing tighter budgets, longer sales cycles, and declining revenues. A focus on
reducing costs and improving efficiencies and effectiveness throughout the organization may provide a
growth path, if not survival. As a result, strategic initiatives such as benchmarking are on the rise,
providing business executives with valuable information that will help them remain at the forefront of their industry.
Benchmarking Survey
Caturano and Company - Mar 02, 2010
In August 2009, Caturano and Company conducted a high-level budgeting and planning benchmarking survey of more than 70 finance executives throughout New England. The purpose of this study was to examine current trends and best practices, as well as identify issues organizations contend with during their budgeting and planning process.
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Governance
Considerations for Navigating the SEC's New Proxy Disclosure Rules
Deloitte - Mar 10, 2010
The new SEC disclosure requirement regarding compensation-policy risk gives companies the opportunity to take a fresh look at their compensation programs, especially the incentive plans. While risk has always been an implicit consideration in the design of incentive compensation programs, the new requirement provides management and the compensation committee with an opportunity to have a constructive discussion regarding the level of risk taking that should be allowed in the company’s incentive plans. It also allows an excellent opportunity to improve the design of incentive plans and the required internal controls.
E-Proxy Update
Hinckley, Allen & Snyder LLP - Mar 10, 2010
On February 22, 2010, the Securities and Exchange Commission (“SEC”) amended its notice and access proxy rules, better known as the “e-proxy” rules, which were
initially enacted in 2007. The e-proxy rules require all issuers and other soliciting persons to post their proxy materials on an internet website, while allowing
issuers and soliciting persons the option of providing only a Notice of Internet Availability of Proxy Materials (“Notice”) to shareholders instead of the full set of printed proxy materials. The Notice, if
sent without the full set of proxy materials, would indicate how shareholders could access the proxy materials on the website. The goal of the e-proxy rules was to limit the cost and resource wastefulness
of traditional mailed proxy materials.
The Challenge to the Business Family: Growing and Chaning with the Business
RSM McGladrey - Feb 23, 2010
Research from the Family Firm Institute indicates that only 12 percent of family-owned businesses successfully transition from second to third generation ownership and leadership. Those that do make the leap are faced with increasingly complex business and family challenges.
One of the shifts that are necessary to secure continued business growth is for the second generation to begin to build the disciplines required to ensure that the work ethic, vision values and entrepreneurial spirit embodied in the founder becomes part of the unifying fabric of the family. We are calling this intentionally developed and nurtured family system the “Business Family.”
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Nominating
Diversity Management
Egon Zehnder International - Sep 20, 2008
Today, diversity is a topic that is much broader than
efforts from yesteryear to be in compliance with
anti-discrimination laws and regulations. Workplace
diversity now focuses on creativity and creating
competitive advantage. More and more businesses
are making diversity an integral part of their strategy. When making executive appointments they
deliberately target specific populations that are
underrepresented on the management team.
Will a Board Review Improve Your Team and Talent?
Egon Zehnder International - Sep 20, 2008
Building a Pipeline
Egon Zehnder International - Sep 20, 2008
The bad news is that the average CEO falls well
short of delivering a level of leadership development
that would build a talent pipeline. The good
news is that more and more CEOs are questioning
their organisation’s approach in this field. In the
experience of Egon Zehnder International, one way
of successfully developing the next leadership
cohort is through structured exposure to selected
challenging business experiences. Pursued with the
involvement of top management, such leadership
development initiatives deliver substantial financial
benefits.
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Strategy
Strategies for Going Public
Deloitte - Mar 10, 2010
You may be thinking of taking your company public and,
if so, you undoubtedly have many questions. Deloitte has been advising clients and assisting them in the process of going public for many years. Drawing on that experience, we have prepared this publication to assist you in answering those questions, to acquaint you with the “language” of going public, and to give you a working knowledge of some of the technicalities of the process.
Planning for Success: 10 Steps to Take Before the IPO Window Opens
Sharon Merrill Associates - Mar 19, 2009
Forecasts vary as to when the IPO market will come back, and even optimists say it could take a long time. To give you a sense of how slow the market has been, there were only 43 IPOs priced in 2008 versus 272 in the prior year. In your role as director of a pre-IPO company,it is your responsibility to ensure that management is using the current slowdown in the market to the company’s advantage. It is also an opportunity to update your own knowledge about recent developments in corporate disclosure and investor relations. Directors are increasingly becoming involved in these areas at the tactical, as well as strategic, levels.
How Effective Is Your Board?
Egon Zehnder International - Sep 20, 2008
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