Are the CEO and the Chairman of the Board the same executive at your company? While there can be very good reasons to have these positions held by the same person, the separation of these posts continues to be a hotly debated topic. Since the early 1980s, much attention has been paid to corporate boards… Continue Reading
Category Archives: Corporate Governance
Subscribe to Corporate Governance RSS FeedWhen does hedging or pledging of company stock by insiders equate to bribery?
Posted in Corporate GovernanceThe answer: when ISS is evaluating a public company’s corporate governance under its revised policies for the 2013 proxy season. We previously blogged about the potential insider trading issues that could theoretically arise when insiders pledge company stock to secure loans. Now, with the implementation of the revised ISS governance standards, there are additional reasons… Continue Reading
Starting the New Year off right: In-house counsel disclose their New Year’s resolutions
Posted in Corporate GovernanceAs we start 2013, I thought it would be fun to ask in-house counsel what their New Year’s resolutions were. I wasn’t looking for the usual “go to the gym more/ lose weight/ get organized” type answers, but rather what corporate secretaries/ securities counsel would want to improve upon in 2013 in their professional lives. … Continue Reading
Are investors’ interests served by proxy advisory firms?
Posted in Corporate GovernanceAs we say “goodbye” to 2012 we say “hello” to another proxy season full of angst caused by the self-appointed czars of corporate governance, the proxy advisory firms. Although ISS and Glass Lewis have been making voting recommendations for more than a decade, over the past two years their power over voting outcomes has increased. … Continue Reading
GUEST BLOGGER: Lessons learned in corporate governance from the Jerry Sandusky tragedy
Posted in Corporate GovernanceMr. Lamm is Assistant General Counsel and Assistant Secretary at Pfizer Inc. and a Gunster alumnus. The views expressed in this posting are Mr. Lamm’s personal views and should not be attributed to Pfizer Inc. or to Gunster. While nothing good has come out of the Jerry Sandusky sexual abuse scandal at Penn State, I… Continue Reading
Proposed compensation committee independence rules will impact some issuers more than others
Posted in Corporate GovernanceIssuers listed on the NYSE or Nasdaq should pay close attention to the rules proposed by the exchanges last week because the proposed rules will impact compensation committees; however, the impact may be a “tale of two exchanges” because the impact is more significant to Nasdaq-listed companies. As you may recall, Congress included several provisions… Continue Reading
Margin calls: The insider trading trap
Posted in Corporate GovernanceImagine the following scenario. Your company is publicly traded. As such, senior management is keenly aware of the potential for executives and employees trading in the company’s securities on the basis of material nonpublic information in violation of Section 10(b) of the Exchange Act and the infamous Rule 10b-5 promulgated thereunder. To prevent improper trading,… Continue Reading
NASDAQ aims to ease indepedence rules, offer limited relief to issuers
Posted in Corporate GovernanceIssuers who would not otherwise meet the NASDAQ independence rules may now breathe (a small) sigh of relief. On May 30, the SEC published notice of NASDAQ’s proposed change to Listing Rule 5605. Generally, Rule 5605 requires issuers to maintain an “independent” audit, compensation, and nominating committees. There is an exception to the independence rules… Continue Reading
Could directors be personally liable if Facebook paid too much for Instagram?
Posted in Corporate GovernanceIt is a basic tenant of corporate law that directors of a corporation are not liable for business decisions as long as the directors acted with a reasonable level of care in making these decisions. This is referred to as “the business judgment rule.” Because directors are not guarantors of corporate success, the business judgment… Continue Reading
Groupon has accounting problems (again)
Posted in Corporate Governance, Technology Company IssuesOne of the most well-known and popular Internet companies, Groupon, Inc., has again encountered significant accounting problems. These problems appear to be potentially severe. This situation is very negative for Groupon, but it also has troubling ramifications for the entire technology industry and especially for technology companies that have recently gone public. There is also… Continue Reading
Your company may be ‘publicly traded’ without your knowledge – and there may be a price to pay
Posted in Corporate GovernanceWhen someone refers to a company as being “publicly traded” we normally understand that to mean that it has sold shares to the public through an initial public offering (or “IPO”) and is listed on a national securities exchange (like the NYSE or Nasdaq) and makes periodic filings with the SEC. However, some smaller companies… Continue Reading
First Proxy Access Proposal Received
Posted in Corporate GovernanceLate last week, a shareholder activist filed, what is believed to be, the first proxy access resolution for this proxy season. The target of the proposal, MEMC Electronic Materials, Inc., is an S&P 500 company that manufactures and sells wafers and related products to the semiconductor and solar industries. As discussed in a previous blog… Continue Reading
Proxy Access Still on the Table
Posted in Corporate GovernanceDespite the SEC’s decision not to appeal the recent decision by the U.S. Court of Appeals for the D.C. Circuit to vacate the proxy access rules, proxy access is still alive and well. In Tuesday’s release by the SEC, the SEC noted that the amendment to Rule 14a-8, which had been stayed pending the litigation… Continue Reading
More Costs to Pile on Public Companies?
Posted in Corporate GovernanceOn August 16, 2011, the PCAOB issued a concept release seeking comments on ways that auditor independence, objectivity, and professional skepticism could be enhanced. While the PCAOB seeks advice on any approach, the concept is focused on mandatory audit firm rotation. Consequently, the release could lead to companies having to change their auditors every few… Continue Reading