Corporate governance - Vigil

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Good morning. This is an open meeting of the U.S. Securities and Exchange Commission on October 26, 2016, under the Government in the Sunshine Act. Today, the Commission will consider two recommendations from the Division of Corporation Finance. First, the Commission will consider a recommendation to propose changes to our proxy rules to require the use of universal proxy cards in contested director elections. Second, the Commission will consider recommendations for final rules to further facilitate companies’ access to capital through intrastate and regional securities offerings, with accompanying investor protections provided by state and federal law.

Several months ago, Chairman Scott Garrett of the House Subcommittee on Capital Markets and Government Sponsored Enterprises raised questions about how the Commission has been prioritizing its resources. [1] As he noted, the universal proxy initiative has been pushed for years by special interest groups and it would increase the likelihood of proxy fights at public companies, thereby distracting management and employees from carrying out their core mission. [2]

As more women enter the upper echelons of large corporations (according to Catalyst, the proportion of CEOs in Fortune 500 firms has increased from 0.4% in 1998 to 4.6% in 2015 and the proportion of board members has increased from 9.6% to 19.9%), the natural question that arises is whether women executives have equal access to material and relevant information as their male counterparts. Clearly, establishing and comparing men’s and women’s access to relevant corporate information is difficult. We use a novel approach to explore this question. Our proxy for executives’ corporation-specific knowledge is the profitability of insider trading. To the extent executives have access to material, non-public information about their own corporation, they will be able to trade profitably.

OTTAWA — The Liberal government hopes that proposed legislation requiring publicly traded companies to disclose the gender composition of their corporate boards and senior management will lead to greater diversity, but will consider imposing specific targets if the new measures don't work.

Many publicly listed firms around the world allow their executives and other major shareholders to pledge their company shareholding as collateral for a personal loan. Pledging is valuable to corporate insiders because it allows them to nominally retain their ownership in the firm, while at the same time accessing the liquidity that is tied up in their firm’s stock. These liquidity benefits of pledging allow corporate insiders to enjoy valuable private benefits such as greater consumption or diversification of their personal wealth by funding other private investment opportunities.

Which 100 executives delivered top results over the long term? HBR’s 2016 ranking provides the answer.

It seems like a director’s oversight responsibility is ever increasing and without an end in sight. From company history and policies to financial forecasting, boards are bombarded with information on the organization that they serve and the industry they are competing in. In this busy environment, can you be sure that your board is getting the information it must know to make sound decisions and justify them to shareholders and stakeholders? What can boards do in order to get the information they need to do their jobs properly?

Banks have long been known for paying high dividends. Their payout decisions in the financial crisis of 2007-2009 received considerable coverage in the press. Acharya et al. (2012) document that, despite mounting losses, many of the largest US bank holding companies kept dividends constant and in some cases even increased them until the end of 2008. While this behavior could have been motivated by the desire to transfer wealth from their creditors (or the government), banks may have been reluctant to cut dividends fearing that dividend reductions would lead to uncertainty about their fundaments, and cause subsequent refinancing problems. Our study, Understanding Bank Payouts During the Crisis of 2007-2009, sheds light on the possible motives and implications of banks’ payout policy at the beginning of the financial crisis.

Good morning. I would like to thank the staff for all of their hard work leading up to this proposal. The team spent a lot of time listening to and considering a variety of views regarding the issue of universal proxy. In particular, I would like to thank Tiffany Posil, Tina Chalk and Michele Anderson in the Office of Mergers & Acquisitions and Tara Bhandari of DERA.

In the fifth full season of the advisory vote on executive compensation (“say-on-pay”), average shareholder support for these proposals remains high—in excess of 91% so far in 2016, according to our research. However, although there have been slightly fewer “failed” votes this year, more than 10% of issuers receive a negative recommendation from at least one of the proxy advisors, and many more spend the early part of the proxy season scrambling to deal with executive compensation issues preemptively to ensure that they do not develop into a negative outcome.

Review of The Handbook of Board Governance Part 8, Governance of Different Forms -nonprofits, startups, small-caps, family firms and more.

Good afternoon and thank you for that very kind introduction. It’s a pleasure to speak with you all today [Oct. 13, 2016]. Before I start, I must give our standard disclaimer that the views I express today are my own and do not necessarily reflect the views of the Commission or its staff.