Corporate governance - Vigil

Although board seats don’t become available all that often, as more organizations broaden their definition of diversity the pool of potential candidates is expanding. What does it take to land such a spot? Industry and international experience, a knowledge of risk and technology issues, and personal traits that range from intellectual curiosity to unassailable integrity are just some of the qualities and qualifications that matter. Learn how to assess your viability and what steps you might take to enhance your appeal to search committees.

Companies that go public with multiple classes of shares will be excluded from the major U.S. stock indexes of S&P Dow Jones Indices, the organization announced in July.

In my forthcoming article, The Case for Investor Ordering, I show that Securities and Exchange Commission (SEC) regulations regarding corporate arrangements could be substantially improved if investors in corporations were able to choose whether those regulations apply to the corporation. For all but a few SEC regulations, such “investor ordering” would result in greater aggregate net benefits for corporations and their investors. Investor ordering also interacts with requirements for cost-benefit analysis to reduce the cost of SEC regulation, and makes SEC regulations more dynamic. Investor ordering will be most beneficial for recent and future SEC regulations, such as regulations regarding internal controls, pay ratios, say-on-pay, proxy access, and universal proxies. These considerations should guide future SEC regulation, and deregulation, towards investor ordering.

Corporate culture counts. But bad culture can damage a company’s reputation, results and recruitment.

On September 21, 2017, the U.S. Securities and Exchange Commission (SEC) released additional guidance on the pay ratio disclosure rules that require public companies to disclose how the compensation of their chief executive officer compares to the median annual total compensation of their employees overall. As a reminder, these rules are effective for most public companies (other than emerging growth companies and smaller reporting companies) in 2018 with respect to 2017 compensation. For a summary of the key provisions of these rules, please see our previous WSGR Alert. The SEC's additional guidance provides relief on a number of issues that should reduce the overall time burden on companies and provide greater flexibility in how they calculate and disclose their pay ratio. This guidance also resolves any lingering possibility that the SEC will delay or significantly modify any requirements related to the pay ratio disclosure rules.

The state of Delaware fell from the top-ranked position to number 11 in the most recent survey on the business-friendly environment for lawsuits in state courts, ceding ground to the state of South Dakota. Delaware had been in the highest perch for the last ten surveys, going back to 2002 (the surveys were not conducted every year).

The Background: The NYC Pension Funds, which led the largely successful campaign to implement proxy access rights across corporate America, have launched a new crusade to improve the diversity of corporate boards.

Activism at public companies can reduce board diversity, or it can increase it, depending on the circumstances. In recent years, activist hedge funds have installed dissident nominees who collectively have trailed the S&P 1500 index significantly in terms of gender and racial diversity. In contrast, institutional shareholders and asset managers are promoting board diversity to an unprecedented extent, with concerted public efforts already producing results. Several institutional investor initiatives, announced earlier this year, and the New York Comptroller’s Boardroom Accountability Project 2.0, announced earlier this month, may be game-changing initiatives on the path to greater board diversity.

[September 21, 2017], the SEC announced that it had adopted interpretive guidance in connection with the pay-ratio disclosure requirement, which mandates public company disclosure of specified pay-ratio information, beginning with the upcoming 2018 proxy season. Generally, the guidance provides a more expansive reading of three topics: company reliance on reasonable estimates, the use of existing internal records to determine the median employee and non-U.S. employees, and the use of other recognized tests and criteria (such as published IRS guidance) to determine employee/independent contractor status.

On September 21, 2017, the Securities and Exchange Commission (SEC) released additional guidance on the CEO pay ratio disclosure requirement. While many had hoped for some form of delay or outright reprieve from the required disclosure, it is now evident that the SEC expects companies to fully comply with the reporting requirement in early 2018 when the rule becomes effective.

Public and private companies in search of growth and value creation often pursue M&A transactions as a way to achieve greater lo

The process by which shareholders are permitted to include their proposals in company proxy statements is under attack. The Business Roundtable and the Chamber of Commerce have each published reform proposals that would sharply limit these proposals. The Financial CHOICE Act, which passed the House of Representatives on a strictly partisan vote, includes provisions that are similarly, if not more, restrictive. Not surprisingly, the Council of Institutional Investors is vigorously opposing these efforts. It is an area in which agreement between the two sides has been elusive. At the risk of wading into the corporate governance equivalent of the Middle East peace talks, here are some proposals that, while they do not completely overhaul the process, might make it better without undermining the fundamental rights the shareholder proposal rule provides.

The financial crisis of 2007-2009 caused the most severe global economic downturn since the Great Depression.  The recent crisis has generated renewed interest in the Glass-Steagall Banking Act of 1933, which Congress adopted in response to the collapse of the U.S. banking system and the freezing of U.S. capital markets during the Great Depression.  Glass-Steagall was designed to stabilize the U.S. financial system by separating commercial banks from the capital markets and by prohibiting nonbanks from accepting deposits.

The first global blockchain benchmarking study presents a systematic and comprehensive picture of a rapidly evolving industry, examining how blockchain and dist

In response to the recent Green Paper and the U.K. Government Response, the Institute of Chartered Secretaries and Administrators (ICSA-The Governance Institute) and the Investment Association (IA), with U.K. Government approval, have issued a paper, The Stakeholder Voice in Board Decision Making, setting forth core principles for complying with Section 172 of the U.K. Company Law.