Justice Carolyn Berger of the Delaware Supreme Court suggested that judges are more likely to consider the financial crisis when weighing in on the validity of director decisions concerning pay and bonuses, according to Global Proxy Watch.
On Wednesday, the International Corporate Governance Network (ICGN) held its second conference in Wilmington. In addition to Justice Berger’s comments, other judges privately confirmed that the constant flux of business due to the financial crisis, could affect court rulings.
In a speech later in the day, Ira Millstein, of Yale’s Millstein Center and Weil Gotshal, suggested that a director could better defend against suits if the board were led by an independent outside chair, according to GPW.
“Boards are still led by the one obvious conflicted person to monitor the CEO and management—the CEO,” he said. ICGN delegates agreed later in floor votes.
The Securities and Exchange Commission Chairman Richard Breeden pressed Washington to forgo golden parachutes, since they have no “intellectual justification.” He pointed out that companies often fall back on the option to remain competitive.
According to GPW, independent chair and executive pay issues are hot button issues that will likely lead investor activism in 2009.