Corporate governance - Vigil

Several sources have reported that Acting SEC Chair Michael Piwowar recently issued a directive mandating that only the Acting Director of the Division of Enforcement can authorize the issuance of formal orders of investigation, the means by which the SEC authorizes its investigative staff to issue subpoenas. [1] The change—which reportedly strips approximately 20 Enforcement Division senior officers of the power to authorize formal orders—was not announced publicly and is not reflected in the SEC’s Enforcement Manual.

A small but growing number of domestic and multinational companies are adopting some form of the management concept called Creating Shared Value (CSV).

In the Dodd-Frank Act legislation after the 2008 Financial Crisis, the inclusion of shareholder SOP voting was driven by bipartisan Congressional support to “control executive compensation…” at corporations. In 2009, a former SEC chief accountant said, “Executive compensation at this point in time has gotten woefully out of hand... The time to adopt 'say on pay' type legislation is certainly past due.”1 Politicians, regulators, and some institutional shareholders clearly thought that, “The impetus for passage of Dodd-Frank's say-onpay requirement in 2011 focused on remedying ‘excessive’ CEO pay.” 2

On Tuesday, State Street Global Advisors (SSGA) issued a memo and press release (discussed on the Forum here) calling on 3,500 global companies, representing more than $30 trillion in market capitalization, to increase the number of women on corporate boards. Timed to coincide with observance of International Women’s Day, SSGA’s initiative is the latest, and most assertive, move by a major U.S.-based institutional investor to push companies toward increasing gender diversity on boards.

The significant rise of activism over the last decade has sharpened the focus on shareholder engagement in boardrooms and executive suites across the US.

Royal Dutch Shell saidon Thursday its chief executive Ben Van Beurden saw his totalpay jump 60 percent in 2016 to 8.263 million euros from 5.135million a year earlier mainly due to deferred bonuses and shareplans.

Corporate Secretary editor Ben Maiden moderates a panel discussion on cyber-security, hosted by Nasdaq 

For the past thirty years, regulatory reform efforts have focused on encouraging diversified institutional investor involvement in corporate governance. Now, some recent economic research threatens to chill these developments.

Under the Modern Slavery Act 2015, organisations conducting business in the United Kingdom with worldwide revenues of at least £36 million are required to publish a transparency statement describing the steps they have taken in the last financial year to ensure their business and supply chains are free from modern slavery and human trafficking. The obligation applies to financial years ending on or after 31 March 2016, and transparency statements should be published as soon as reasonably practicable after, and ideally within six months of, the financial year end.

One of the most enduring debates in corporate law is whether the United States system of corporate law federalism leads to a “race to the bottom” or a “race to the top.” [1] Race to the bottom theorists argue that because insiders of companies must initiate incorporation decisions, jurisdictions compete to provide legal rules that favor insiders, allowing them to extract private benefits at the expense of the corporation or its shareholders. Race to the top theorists argue that market constraints prevent insiders from favoring such jurisdictions, and that jurisdictions actually compete to provide efficient legal rules that enhance shareholder value. Although the dichotomous framing as a “race” to the “top” or “bottom” is a bit of an oversimplification of a more nuanced debate, that version of the debate has dominated discussions of corporate law for decades.

I see several familiar faces here today.  On behalf of all of us here at the Commission, I would like to extend our thanks to the members of the IAC for your continued service to our agency and our country.  I am also delighted to welcome the IAC’s newest member, Jerry Solomon.

The Canadian Board Diversity Council's Annual Report Card provides a snapshot of corporate board diversity in Canada. This project, initially started in 2010, provides historical views and measures the pace of change for diversity on FP500 boards.

Corporate innovation is an important driver of firm value. However, given the inherently risky nature of innovation outcomes, CEOs would be reluctant to undertake innovation. Mainstream research in economics has focused on extrinsic motivation though the design of financial incentives. An alternative solution is to select CEOs with the right temperament for innovation.