Event Summaries 2011 - 2012
January
Governance
Key Board Issues for 2012
The year 2012 is off to a challenging start for U.S. big business. Occupy Wall Street has convinced most Americans that they belong to the 99%, and not the 1% that reaps the rewards of private enterprise. Both political parties are turning to anti-corporate rhetoric as the presidential election looms. Social media is emerging with shocking speed as a powerful force in shaping public and consumer opinion about the behavior of companies in the marketplace and in society.
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December
Governance
Dimensions of Board Effectiveness
Corporate boards evolve and grow as the company’s life cycle advances. In highly functional boards, there are parallel changes in the mix of personality styles that directors bring to the table – their individual strengths and patterns of behavior beyond formal qualifications. Some directors excel at building consensus; others are good at synthesizing information; others may have outstanding critical thinking skills. Which personality styles tend to have the greatest impact at key points in a company’s life trajectory?
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November
Strategy
Shareholder Activism
Reflecting today’s high levels of liquidity in the capital markets, shareholder activism is more prevalent than ever before. Not surprisingly, boards are increasingly looking at the rise in dissident shareholder activity and asking themselves, “Are we prepared?” The two speakers at NACD New England Chapter’s November 8, 2011 Breakfast Event provided the audience with riveting personal accounts of how two very different boards recently rose to the challenge when their companies were targeted by activist investors.
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October
Compensation
Compensation Committee Challenges in Fall 2011 - An NACD Peer to Peer Program
This peer to peer program on executive compensation brought up the key timely issues in proxy statements and Say on Pay, feathering a comprehensive case study. The panelists shared their views on what the boards should do to prepare for 2012 and beyond.
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October
Risk
Strategy & Risk - Are They Aligned?
Corporate directors are tasked with helping set their company’s strategic direction, while at the same time balancing the implications of an increasingly complex risk environment. Bet the farm incorrectly, even when all risk factors are taken into consideration, and the company may face long-term or irreversible damage. The panel of speakers at the NACD New England Chapter’s October 18 Breakfast Event consisted of three senior directors who have lived on the front lines of corporate risk management. Sharing insights gleaned from their personal experiences, they provided an insider’s perspective on the challenges board members confront in identifying, assessing and managing the risk profile resulting from the strategic planning process. After their prepared remarks, the panelists answered a wide range of questions from the floor related to the pros and cons of board-level involvement in risk assessment and management.
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September
Governance
Corporate Governance in the Spotlight: A Conversation with Jay Hooley of State Street Corporation
Life on the board of State Street Corporation is more demanding than it used to be. Evolving federal regulations and a plethora of emerging risks have conspired to create a “new normal” that makes the task of strategic planning more crucial and challenging than ever before. At the NACD New England Chapter’s September 16, 2011 Breakfast Event, State Street’s chief executive officer joined one of the company’s directors, as well as a prominent corporate attorney, to paint an insider’s picture of the new governance landscape at one of New England’s largest companies
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Event Summaries 2010 - 2011
June
Strategy
Board Succession: The Who, What, When, Where and How's
What does a board see when it looks in the mirror?
· Seasoned executives with the right mix of backgrounds, perspectives, skills and incentives?
· Successful leaders who, although strong-willed and opinionated as individuals, respect differing viewpoints and perform as a team under pressure?
· Professionals who embody the principles of ethical business practice and keep the interests of shareholders first and foremost in their minds?
And if the board’s reflected image is not of this high caliber, what can be done to fill the gaps?
Representing three different perspectives, the distinguished panelists at the NACD New England Chapter’s June 14, 2011 Breakfast Event recommended steps to ensure optimum board composition and improve board performance, exploring with members and guests the latest issues in board succession planning, governance policy and performance evaluation.
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May
Risk
Peer to Peer Event: Nonfinancial Risk Governance
As the Board becomes increasingly involved in Enterprise Risk Management, it is essential that Board members fully understand the complexities of Risk Management given the uncertainties in the local and global economies, limits of the Board’s knowledge, pressure for profits and the dynamics of each Boardroom. In the end, it is up to the Directors to insure that management has processes to manage known risks, be constantly vigilant to explore areas for unknown risks to create additional value for their stakeholders, test their assumptions on worst case scenarios, and know there is no single process or right answer that guarantees that all risks are understood.This session was an interactive discussion on the nature and implications of risk management for Board members.
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May
Governance
The Board in Time of Crisis
Serving on a board is nothing less than stimulating and demanding under normal circumstances, but the stakes and stress levels quickly escalate in times of corporate crisis:
·A single unexpected phone call can radically change the next year or more of a director’s life;
·An annual board calendar with five meeting days can explode to 57 days;
·The public respect engendered by a glowing corporate reputation can turn to cold contempt;
·Enduring bonds of trust with key executives can break down in an instant;
·And not least, the small print in the board’s D&O policy immediately takes on greater personal significance.
Telling war stories and sharing lessons learned from their own experiences, the panelists at the NACD New England Chapter’s May 10, 2011 Breakfast Event provided members and guests with practical insights for directors eager to learn how to prepare for corporate crises.
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Here is a link to a related article:http://www.directorship.com/balancing-risk-and-reward/
April
Governance
A New World of Governance for Non-Profit Boards
Every nonprofit organization is unique, and the same can be said for their boards of directors. Underscoring this point, moderatorElizabeth Mora, Chief Financial Officer at Draper Laboratory, set the stage for the NACD New England Chapter’s April 12, 2011 Breakfast Event by saying, “When you’ve seen one nonprofit organization in terms of its governance structure . . . you’ve seen one nonprofit organization.”Recognizing the perils in making broad-brush observations about the nonprofit sector, the ensuing panel discussion then focused on the key governance themes, issues and challenges shared in common by even the most disparate nonprofit organizations. Four seasoned panelists drew from their broad range of nonprofit board experiences in highlighting best practices for addressing these concerns.
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March
Strategy
M&A Today - Real Time Decisions to Foster Growth and Value
As the economy recovers, many companies are not yet seeing strong organic growth and are looking at acquisitions to boost revenues and consolidate industries with excess capacity. Wall Street rewards the management teams that can demonstrate growth. Developing and executing a solid acquisition strategy is one way to deliver that growth and increase shareholder value. Attendees at the NACD New England Chapter’s March 8, 2011 Breakfast Event had the chance to observe and then participate as board members working through a public company M&A scenario pitting a strong-minded CEO against an independent board. The event’s five panelists played the roles of CEO, CFO, lead director, outside counsel and investment banker in considering an acquisition opportunity being presented by the CEO to key directors and their outside advisors.
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February
Governance
Corporate Governance Law - The Delaware Chancery Speaks
Major U.S. companies have a propensity to incorporate in Delaware, so rulings by the Delaware Court of Chancery have a disproportionately large impact on American corporate governance. Attendees at the NACD New England Chapter’s February 8, 2011 Breakfast Event were treated to a fascinating Chancery Court insider’s perspective on some of today’s critical corporate legal trends and governance issues, along with a lively exchange of views on the implications for board best practices and decision-making.
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January
Governance
Boardroom Issues of 2011
As public scrutiny and economic uncertainties continue in 2011, corporate boards will need to focus on corporate governance, generating growth and sustained profitability, global competition, and new regulations.A panel of three directors with significantC-level and board experience discussed these topics.Moderating the panel was Ernest L. Godshalk, III, member of the advisory board of Velocity Equity Partners and director of three public company corporate boards.
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December
Strategy
Being Competitive - The Role of the Board in Setting Strategy
Approving long-term strategy is a key board function and an integral part of a board member’s role as an advisor to the executive team. But in today’s economy, the pressure to set effective strategy often makes it difficult for directors to resist crossing the line between “advising” and “managing” the effort.The panelists at NACD New England’s December 14, 2010 Breakfast Event brought a range of opinions to questions related to striking the right balance between governance and management in developing corporate strategy.
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November
Governance
Board/Shareholder Communications - Speak Now or Forever Wish You Had
Sarbanes Oxley, Dodd-Frank and a round of upcoming SEC rulemakings will likely lead to an even more federalized and politicized corporate governance environment going forward.Two kinds of activists tend to flourish under these conditions.One group is the labor unions and state pension funds that treat corporate governance as a political process and focus on public issues like executive compensation.The other group is the hedge funds and corporations that are taking advantage of the current climate in pushing for a higher degree of control – ranging from seats on the board, to getting involved in a transaction with the goal of driving up the share price, to targeting companies for takeover.
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CLICK HEREto see the PowerPoint Presentation
CLICK HEREto see the Checklist for Responses to Unsolicited Acquisition Proposals and Activist Stockholder Proposals
October
Compensation
The Next Challenge for Compensation Committees –Ensuring Pay and Performance Alignment in 2011 & Beyond
Before Dodd-Frank and ‘Say on Pay,’ a company’s Compensation Discussion and Analysis (CD&A) served as a disclosure exercise.Going forward, the CD&A will be an advocacy document.Starting with the executive summary, CD&As will have to demonstrate responsiveness to shareholder concerns, that risk-taking has been mitigated, and that executive pay has truly been connected with performance.
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CLICK HEREto see the PowerPoint Presentation
September
Governance
Corporate Governance in the Spotlight: A Conversation with Bank of America President and CEO, Brian Moynihan
“Corporate executives tell me that, in the end, what is holding the economy back is uncertainty – not credit availability, or a lack of good ideas or places to invest.Our most important job as business leaders in times like these is to provide the certainty we need to move forward, and certainty is a product of good corporate governance.”
—Brian Moynihan, President and CEO, Bank of America
CLICK HEREto read the complete writeup.
Risk
New York Court of Appeals Confirms Robust In Pari Delicto Defense
Bingham McCutchen - Feb 03, 2011
In Kirschner v. KPMG LLP, et al. and Teachers’ Retirement System of Louisiana v. PricewaterhouseCoopers, LLP, the New York Court of Appeals recently acknowledged that a robust in pari delicto defense protects a company’s outside professional advisors (such as auditors, lawyers and investment bankers) against claims made on behalf of the company that the outside advisors either assisted in or wrongfully failed to detect financial fraud committed by the company’s management.
Boardroom Liabilities - Sharing a Spotlight on Risk
Bingham McCutchen - Dec 30, 2010
“The board should always be aware of the company’s risk philosophy and risk tolerance, understand how management has established the company’s structure to deal with risk exposures, and stay informed and updated about the most significant risks facing the company.”
–Jordan D. Hershman, Bingham McCutchen LLP
The Board and Risk Oversight: Increasing Transparency Through Proxy Disclosure
Deloitte - Dec 17, 2010
While risk oversight has always been an important board function, a number of questions have arisen since the Securities and Exchange Commission (SEC) issued the enhanced proxy disclosure rules in December 2009. Who owns risk oversight? Is it a full-board responsibility or the domain of the audit committee? Is there a “correct” level of risk? How has the oversight of risk been altered by heightened shareholder scrutiny?
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Compensation
An ISS Holiday Gift Basket - Technical Guidance on Pay-for-Performance Test
Pearl Meyer & Partners - Dec 29, 2011
A detailed look at much-anticipated, end-of-year information from proxy advisory firm Institutional Shareholder Services on their planned methodologies for evaluating executive pay programs in 2012.
ISS Issues Policy Updates for 2012 Proxy Season
Pearl Meyer & Partners - Dec 07, 2011
In a webcast presented today, ISS reviewed its 2012 Policy Updates, which contain several key
changes from previous years. Given ISS’s growing influence, it is critical that companies and
their Boards understand how these policy updates will impact its evaluation of select proxy proposals, including Say on Pay and Director re-election matters.
PM&P on Compensation Planning: Looking Ahead to Executive Pay Practices in 2012
Pearl Meyer & Partners - Nov 30, 2011
PM&P ON COMPENSATION PLANNING: LOOKING AHEAD TO EXECUTIVE PAY PRACTICES IN 2012
This new survey offers a preview of how firms plan to adapt their executive pay practices and programs in 2012 to evolving, regulatory and economic challenges, including forward-looking data on the design of pay-for-performance programs and related payouts, equity use, perquisites and severance arrangements.
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Audit
Fraud, Corruption and the Audit Committee: Protecting Reputation and Value
Deloitte - Aug 31, 2011
Global media and the Internet enable news to travel faster and reach more people than ever before. The international nature of business and growing collaboration among regulators worldwide can expose an entity to a greater number of regulatory regimes. These factors may increase both the likelihood and the potential impact of alleged wrongdoing on a company’s reputation and shareholder value. Experience suggests that companies that manage their risks proactively may be less vulnerable to having their reputations harmed by allegations of wrongdoing, falling behind in the news cycle of reactions, and losing the support of regulators, customers, suppliers, investors, the general public, and even politicians. Audit committee members may want to consider how their company manages its risks of fraud and corruption and whether today’s risk environment merits a more proactive approach. In this edition of the Audit Committee Brief, we discuss 10 areas the audit committee can evaluate that may help mitigate reputational risks of fraud and corruption.
Key Factors Shaping Financial Reporting: The Decade Ahead
Deloitte - Jul 31, 2011
Several financial reporting challenges and trends have emerged during the past few years, including three key qualitative characteristics of useful financial reporting: relevance, understandability, and timeliness. These characteristics have long been recognized as essential qualities in supporting financial, investment, and other economic decision making. As it is the audit committee’s responsibility to oversee the integrity of the company’s financial statements and financial reporting process, it is important that committee members understand these characteristics and work with management to strengthen their company’s financial statements
Accounting Roundup: Year in Review - 2010
Deloitte - Jan 01, 2011
This issue covers accounting standard-setting and regulatory activities that affect year-end financial reporting, as well as recent developments at the end of 2010.
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Governance
Senate's Financial Reform Bill Impacts Executive Compensation Rules and Corporate Governance
Bingham McCutchen - Feb 03, 2011
The attached alert provides an overview of key corporate governance provisions that may become law based upon the Senate's recent passage of financial reform legislation, and the House's passage of similar legislation in December 2009. It discusses the proposed legislation as it would impact executive compensation, including "Say-on-Pay," compensation committee independence, compensation clawbacks, and linking pay to performance, as well as proxy access, majority voting, the separation of CEO and chairman of the board roles, and certain issues concerning securities litigation.
Who's at the Helm of your Company's Ship?
Deloitte - Jan 20, 2011
Board leadership structure continues to be top of mind for directors, investors, and members of management, especially given recent regulations in this area. Proponents of a split CEO/chairman structure assert that this model is the most beneficial for companies and best positions them for strong performance. Opponents of this structure emphasize that there is no irrefutable data demonstrating that companies that split the roles fare better than companies that combine them and further, that the combination of the roles helps to eliminate the potential for confusion and duplication of efforts. In analyzing this issue, it is important for companies to consider the background of the debate, review historical trends, and prepare for the future.
Today's Boards Have a Role in Building Employee Trust
Deloitte - Jan 01, 2011
When boards provide independent management oversight and compelling strategic input, the positive impact on business performance can be felt by consumers and investors. Today, in the midst of the most challenging economic environment in decades, the impact of board governance must register with another vital group—employees in general and, specifically, a growing percentage who simply do not trust their employers anymore.
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Nominating
A Leadership Repository for Boards of Directors
Korn/Ferry International - Apr 28, 2010
As the scrutiny of corporate boards of large U.S. companies intensifies, it has become clear that something is missing from the governance picture: Hispanic directors. Hispanic Americans, who represent 14 percent of the United States population, occupy only 2.3 percent of the total board of director seats among Fortune 1000 companies. Only 19 percent of Fortune 1000 boards have a Hispanic director, a percentage that has barely budged in the past nine years, a period when the country’s Hispanic population – and the Hispanic consumer market (HCM) – increased dramatically.
A New Breed of Director Emerges as Public Policy Enters the Boardroom
Korn/Ferry International - Apr 28, 2010
The global credit crisis and the resulting rescue plans have raised the specter of ongoing government involvement in corporate life. Public companies are now and will continue to be under a microscope to an extent they have never experienced before. Are boards equipped with the expertise to navigate successfully through this impending era of heightened scrutiny?
Today's boards will be expected to watch over an organization's various risks, while at the same time help corporate management develop strategies to cope with the myriad of regulatory and policy issues that may affect their businesses. This whitepaper indicates that it is more important than ever for nominating committees to consider candidates with strong backgrounds in government policy making. Best- in-class nominating committees will find it useful to broaden their search to include individuals with executive-level experience working in government and for public policy-making entities.
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.
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Strategy
Dodd-Frank: What's Relevant for Boards of Public Companies
Deloitte - Aug 31, 2011
A recent publication by Deloitte's Center For Corporate Governance, The Dodd-Frank Act's impact on public companies: After one year, provides an update on provisions that may be applicable to all public companies - those now final, those in proposal stage, and those under consideration. Read more about the provisions of the Dodd-Frank Act that are of importance and relevance to the board of directors.
The Top 11 Hot Topics for Directors in 2011
Deloitte - Jan 20, 2011
This edition provides insights on boardroom priorities and key issues in the context of today’s challenging business environment. To see expanded discussion on these topics developed by Deloitte Touche Tohmatsu member firms, as well as questions that directors may ask related to each topic, see Directors’ Alert: 11 Issues for 2011
Good Medicine or a Bitter Pill? Health Care Reform
Deloitte - Oct 31, 2010
The full implications of the Patient Protection and Affordable Care Act, and other legislative and regulatory initiatives affecting health care, will unfold over the next decade and beyond. But the journey to a new health care system has begun, with enormous implications for American businesses.
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