Thursday July 03, 2008
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Cover StoryLipton vs. BebchukDo stockholders own the company? To most board members, and probably most Americans, the idea is so axiomatic that the question hardly seems worth asking. Yet a long-simmering debate on the age-old argument over the board’s responsibilities to shareholders versus the arguably inherent rights of all company stakeholders recently burst out in the open, shedding new light on that central question. Full Story What Worries Board Directors?Here’s some welcome news: strategic initiatives, rather than compliance and regulation, top the list of board directors’ concerns. According to a survey conducted by The National Association of Corporate Directors (NACD), strategy topped the list for the first time, an indication that board members’ forced obsession with regulatory compliance is starting to wane. Full Story Fiorina on What's Best for BoardsThe first female CEO of a Fortune 20 company, Carly Fiorina’s rise and fall at Hewlett-Packard was nothing short of spectacular. The first outsider chosen to lead the decades-old technology company, Fiorina, hired in 1999 as a change agent, arrived at the height of the dot-com boom. Full StoryFive Trends Reshaping the Internal Audit FunctionGiven the clear need for internal audit to sharpen its focus on risk, and thereby provide more value, internal auditors find themselves at a strategic crossroads: They can either pursue the status quo, a path that could lead to their obsolescence, or they can transform themselves from an internal-audit model focused on controls assurance to a risk-centric model based on the effectiveness of risk management processes. The latter path is far more likely to address the evolving needs of modern organizations and meet the rising expectations of directors and senior management. Full StoryWhat to Expect in D&O PricingSo far, the credit debacle and backdating cases haven’t had an immediate impact on the price of Directors and Officers (D&O) liability insurance. The market has remained soft, despite some high-profile settlements, such as the proposed $117.5 million agreement with shareholders of Mercury Interactive over options backdating. Full StoryPostings: Directors Recently Elected to BoardsPepsiCo treasurer Lionel L. Nowell, III was elected to Reynolds American’s board, and will serve on the audit committee. Nowell is also a board member of the American Electric Power Company. Full StoryInside the SEC's Rule-Making ApparatusThis past summer, the Securities and Exchange Commission proposed two rules on shareholder proxy access with opposing aims: One provides for greater access to ballots, while the other upholds the status quo of restricting access. Together, the initiatives received more than 34,000 comment letters. Full StoryMichael Milken: A Capitalist's Manifesto, Part IIIIn parts one and two, Michael Milken demonstrated the power of investments in health and education to lift nations and contribute to prosperity, and he showed how market-fueled innovation can have a profound impact on economic growth. In this third part, Milken, chairman of the Milken Institute, an independent think tank devoted to global economic issues, discusses the dampening effect that regulation can have on competition and growth. He also explains how through unconventional thinking about finance we can begin to solve our thorniest problems in energy, healthcare, and the environment. Full Story Mattel's Blues: Lessons from a Global Crisis Management EffortAs the critical holiday shopping season bears down like a toddler on a Big Wheel and Mattel announces yet another recall, Chairman and CEO Robert Eckert finds himself repeating this mantra to customers, retailers, analysts, reporters, consumers, regulators, investors, and the board of directors—frankly, to anyone who will listen during the stormiest period in Mattel’s storied 62-year history. Full StoryCapital Markets: Navigating the ExchangesThere have been concerns voiced about the U.S. capital markets losing market share. Earlier this year, the market capitalization of European equity markets surpassed those of the United States for the first time, prompting many to speculate that New York has lost its dominance as the financial capital of the world. Full StoryNasdaq's Global AmbitionsRobert Greifeld, chairman and CEO of the Nasdaq Stock Market Inc., has been busy. He has steered the nation’s largest electronic stock exchange through a series of ambitious growth initiatives and acquisitions, since being named to the top spot in May of 2003. He led Nasdaq’s 2004 launch of Market Center, a system capable of trading Nasdaq, NYSE, and AMEX-listed securities and exchange traded funds on a single electronic platform. But Greifeld’s boldest plans involve giving the exchange a global presence. After the prestigious London Stock Exchange rebuffed his advances, even though Nasdaq owned a sizable minority stake, Greifeld turned his attention to Stockholm-based OMX, which it agreed to buy for about $4.9 billion in a deal struck jointly with Borse Dubai. “We fought the good fight,” he said, during a third-quarter conference call. Regardless, Greifeld told Directorship, Nasdaq is marching forward with its plans to carve out an international footprint. Full Story25 Years After Tylenol: What Have We Learned?Twenty-five years later, Johnson & Johnson’s reaction to the Tylenol product-tampering incident in 1982 is still the gold standard in crisis management. All boards should learn from the lessons of the Tylenol case and should be aware of new lessons that have emerged as events have changed the nature of the public marketplace. Full StoryNew D&O Offerings Provide Better ProtectionThere’s a change taking place in the market for Directors and Officers (D&O) liability insurance. Since the demise of Enron and WorldCom, there has been increasing interest in the purchase of D&O insurance for the sole benefit of a company’s directors and officers. These mammoth bankruptcies highlighted the danger that a bankruptcy court might refuse to allow directors and officers to access D&O policies that also provide coverage to the company. It was argued that the only sure solution was to limit the beneficiaries of the policies to the directors and officers. Full StoryWhite Knight Swoops in for Glass LewisClosing a lightning-fast deal, Ontario Teachers’ Pension Plan’s (OTPP) private-equity unit acquired proxy adviser Glass Lewis for $46 million from troubled Xinhua Finance in October. Full StoryToward Global BookkeepingA Securities and Exchange Commission (SEC) plan, passed unanimously last month, to allow foreign companies listed in the United States to stop reconciling their financial statements to U.S. accounting standards is getting panned by investors. Full StoryO'Neal's Exit Package Stirs Reaction: Senate May Revisit Say on PayThe retirement of former Merrill Lynch Chairman and CEO Stanley O’Neal added some fuel to the fiery debate over CEO compensation, and the public’s perception of the disconnection between pay and performance. Full StoryReadings: Boning Up on the New Views of RiskRecent events on Wall Street and in other sectors of the economy have reminded board directors that they can never know too much about risk. We will make a risk-free bet that most will admit they need to know more, even lots more, and are currently looking to advance their knowledge. To scratch that itch, we recommend two books that are, in terms of payoff, unlike most investments. They are sure things. Full StoryMaking it Work: The CEO and Board Relationship RoundtableLike any successful partnership, it takes is trust, understanding, and a mutual view of the goals for CEOs and the board to work well together. The best boards and CEOs communicate through the official structure of the board and an informal network, and understanding how both work is the key. Full StoryPeer Exchange: Compensation StrategiesNo board-related topic generates as much lively debate these days as executive pay, and it’s likely the discussion will intensify over the coming year. This isn’t surprising, given the national business media’s tabloid-like fascination with CEO pay. An additional factor will be the unknown and perhaps unintended consequences of Compensation Discussion and Analysis (CD&A), giving boards reason to believe the compensation controversy will continue to draw attention. Full StoryPeer Exchange: Getting a Grip on Data Loss and TheftSecurity breaches that put credit card numbers and personal information of customers or employees into the hands of those who would misuse the information or sell it on the black market make headlines almost on a daily basis. Whether the breach occurs through hacking, a dishonest employee, or a misplaced laptop or backup tape, the risks that come with lost or stolen data are real and can have a devastating effect on business. Full StoryTopic A: Does Independence Matter?There is currently no hotter topic in the mutual fund industry than that of board independence. The debate begins with how exactly to define “independence” as it relates to mutual fund boards of directors, and continues into the discussion of the true impact of board composition on mutual fund shareholder experience. How important is board independence to fund performance? Full StoryThe Case for Global D&O InsuranceIn the constantly changing area of directors and officers (D&O) liability, significant D&O exposures are no longer limited to U.S. regulatory and legal actions. Full StoryReviving the Attorney-Client PrivilegeOnce upon a time, federal law enforcement agencies investigated allegations of corporate criminal activity using their own powers, authorities, and investigative techniques. Companies that were subject to federal criminal investigations relied on their in-house and outside counsel to defend them vigorously. Full StoryCEO Succession: From Firefighting to StewardshipDespite the critical importance of CEO succession, many boards find themselves unprepared when the inevitable actually comes to pass. As a result, what should be an orderly, well-planned transition often turns into a firefighting exercise more akin to crisis management than farsighted stewardship. Full StoryFinding New Value in Internal AuditMany audit committees are ratcheting up their expectations for the internal audit function. In fact, a recent ACI/NACD survey found that only 46 percent of audit committee members were very satisfied with the effectiveness of their company’s internal audit function. Full StoryEditor's Letter: Battle ReadyEven Sherlock Holmes would furrow his brow trying to decipher how the following set of clues fit together: corporate lawyer Marty Lipton, Barbie doll, and Bo Xilai, the Chinese minister of commerce. Full StoryCoda: The Legacy of a Business Editor, The New Era of Junk Journalism, and the Lament of InvestorsThe most talented business editor of our time was the late James W. Michaels, chief editor of Forbes, who some may remember from his appearances on Forbes on Fox. Full Story |
           Related ContentShareholder News ArticlesBritish Shareholders Concerned Over Executive PayCompanies Err On Director Pay Reports Aflac Invites ‘Say on Pay’ Vote Bebchuk Scrutinizes 'CEO Centrality' The Directorship 100 Institute & Recognition Dinner: December 2, 2008The annual global gathering of leading board directors and corporate influentials.
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