Oracle's headquarters in Redwood City, Calif.

two derivative suits brought against the business software and hardware company because they were not filed in the Chancery Court of Delaware.

In the first ruling of its kind, Seeborg wrote that specifying where a lawsuit could be brought is permissible in a contract, in which both the defendant and the plaintiff would have had a say. “A bylaw unilaterally adopted by directors, however, stands on a different footing,” he wrote in the January 3 order denying the motion to dismiss on the grounds that the shareholders had no say in the bylaw, which was passed after the suit was filed.

“Particularly where, as here, the bylaw was adopted by the very individuals who are named as defendants,” Seeborg wrote in the decision.

It is alleged in the suits that Oracle, between 1998 and 2006, utilized fraudulent and improper practices to apply discounts on the sale of software and licenses to the U.S. government. The sales totaled $1.08 billion and the suit alleges that the breach of fiduciary duty and abuse of control resulted “in millions of dollars of overcharges.”

Governance Experts Merge
The Corporate Library and GovernanceMetrics International (GMI) announced they will merge with Audit Integrity, operating collectively under the GMI name. The combined firm will continue to provide investors and share-owners with objective governance ratings and research. Jack Zwingli, former CEO of Audit Integrity, will become CEO of GMI, and Richard A. Bennett, former CEO of The Corporate Library, will serve as executive chairman. The combined firm’s board will consist of The Corporate Library cofounders Nell Minow and Robert A.G. Monks and James A. Kaplan, Ric Marshall, Howard Sherman, Gavin Anderson, John Higgins and Laurie Adami.

Farient, Patterson to Align On Pay for Performance
Two independent compensation consultants have joined forces to publicly disclose how executive compensation is aligned with performance. The founding partners —U.K.-based Simon Patterson of Patterson & Associates and U.S.-based Robin A. Ferracone of Farient Advisors—first worked together at Booz Allen and more recentlly at SCA Consulting and Mercer—started their own firms in 2007. A five-year study of executive pay at FTSE100 companies conducted by Patterson’s firm shows that during a period of “enormous value destruction for shareholders,” overall executive pay levels remained high. Even so, the relationship between pay and performance is improving, reports Patterson. Patterson’s analysis has been useful at highlighting overall trends, but cannot be used in the same way as the Farient’s approach, which is increasingly being used for official reporting to shareholders. “This alliance will ensure that our clients are provided with the most reliable compensation solutions wherever they do business,” said Ferracone.

Budget Crunch Delays Creation of SEC Whistleblower Units
Budget limits have caused the SEC to delay the creation of an independent whistleblower office as detailed in the Dodd-Frank Act, which required that the SEC implement new rules by April 12, 2011. In the meantime, current SEC officials will be handling the expected influx of whistleblower tips. In addition to the whistleblower office delay, the agency has also delayed creation of the Office of Women and Minority Inclusion, the Investor Advisory Committee, the Office of Investor Advocate, the Office of Credit Ratings and the Office of Municipal Securities.

More Women at the Top At Big Banks
Women hold 17.4 percent of executive positions at the top 50 commercial banks in the United States, a five-percent increase from 2004 when women made up 12.6 percent of the executive suite, according to a recent Women at the Top (WATT) survey. At the time the companies were sampled, there were no female CEOs (down from one in the 2009 study), three COO women and four female CFOs. WATT, a network of women in or aspiring to be in the C-suite, is opting to wait two or three years before conducting the next survey to allow time to determine if the Dodd-Frank Act, which mandates the creation of the Office of Minority and Women Inclusion in the financial services industry, has any effect.

CEOs Differ From VCs On Prospects for Cash
CEOs and venture capitalists have not been seeing eye-to-eye in regards to raising funds in the coming year, finds a survey from the National Venture Capital Association and Dow Jones & Co. Sixty-four percent of CEOs surveyed planned to raise funding from VCs, with 58 percent believing venture investments will increase and just 14 believing that figure would decrease. Of the group of VCs surveyed, 24 predicted a decrease in investments, while 51 percent believed there would be an increase. The VCs were also confident that more companies would go public, with 67 percent anticipating an increase in IPOs.

FASB Names Seidman Chairman
Leslie F. Seidman has been named chairman of the Financial Accounting Standards Board (FASB). Robert H. Herz, the previous chairman, retired from the organization on Sept. 30, and Seidman had served as acting chairman in the interim. Seidman was a member of the FASB staff from 1994-1999 and then rejoined the organization in 2003 after founding and managing a financial- reporting consulting firm.

Letter Grade ‘C’ For Corporate America
Americans believed Corporate America conducted itself poorly over the past year, according to a study from Strategy-One, a research division of PR firm Edelman. Only 17 percent of respondents gave Corporate America an ”A” or “B” grade when asked to rate how well they met expectations and 82 percent gave a grade of “C’” or lower, with 40 percent assigning a “D” or “F.” Although there was widespread dissatisfaction, the survey found that a majority of people have higher expectations for next year, most believing that those expectations will be met. Respondents noted that companies can improve by assisting in reducing unemployment, investing in the economic recovery, promoting ethical corporate behavior, paying back TARP funds and improving product quality. “With consumers highly dissatisfied with U.S. businesses, the 2011 strategy for Corporate America needs to be ‘back to basics’,” said Bradley Honan of Strategy-One in a statement. “Explaining not only ‘what’ they do for the country, but ‘how’ and ‘why’ they do it needs to be the game plan for how to rebuild corporate reputation.”

Lip Service To Succession
The majority of global companies don’t have a CEO succession plan in place, despite valuing the importance of succession planning, finds a Korn/Ferry Executive Survey. Some 98 percent of those surveyed believe succession plans are an important part of the corporate governance process, but only 35 percent reported having a plan in place if their CEO were to leave. Almost half of the respondents’ companies had no succession plan in place in the past three years.

“Given the number of abrupt, high-profile executive departures this year, it’s surprising that more companies are not acting with greater urgency to put a CEO succession plan in place,” said Joe Griesedieck, vice chairman and managing director of Korn/Ferry Board & CEO Services Practice.

Women Plateau
Despite an ever-increasing call for greater diversity, 2010 was a relatively stagnant year for women in the boardroom, according to two recent and separate reports from Catalyst. The women’s business-advocacy nonprofit conducts an annual census of Fortune 500 women board directors and a second census of F500 women executive officers and top earners. The studies found that in 2010, women held 15.7 percent of board seats, an increase of 0.5 percent from 2009, and 14.4 percent of executive officer positions, a 0.9 percent increase. Consistent with other surveys, Catalyst reports that pay for women directors and officers also remained relatively flat. Women executive officers held 7.6 percent of top earner positions, an increase of just 1.3 percent over 2009.

Dividend Payments on Rise
Just over half of S&P 500 companies increased dividend payments in 2010, with 255 increases, as compared to 157 in 2009. Only four firms reduced their dividends, reported Howard Silverblatt, a senior index analyst at S&P. During 2008 and 2009, 140 firms reduced dividends. “The problem, at this point, is that the dividend commitment is long-term, and the prospects for economic stability over the next year or two are not at a comfort level that encourages strong long-term commitment,” Silverblatt explained to the International Business Times. “So we believe we’re more likely to see smaller increases that correspond to actual improving conditions.”

Business Roundtable: CEOs Optimistic, Engler Appointed
CEOs are more optimistic this quarter, planning to increase hiring, sales and capital expenditures in the coming months, according to the Business Roundtable’s fourth quarter 2010 CEO Economic Outlook Survey. The CEO Economic Outlook Index increased to 101, up from 86 in the third quarter of 2010. Meanwhile, Business Roundtable named former Michigan Governor John Engler president, effective January 15. Engler was most recently president and CEO of the National Association of Manufacturers. Engler succeeds John J. Castellani, who left the organization of CEOs at leading U.S. companies in September 2010 to become president and CEO of the Pharmaceutical Research and Manufacturers of America.

Hay Group Finds Only Modest Salary Increases Expected
Companies are planning slight increases in salary budgets for 2011, according to a survey conducted by the Hay Group, which reported that salary budgets would increase by a median of 2.4 percent. The proportional salary-increase percentage was similar for executives and lowerranked employees. Four percent of companies are either in the process of performing or are considering performing salary cuts, while 18 percent have or are considering pay freezes. Financial services firms planned for the smallest raises, at 2.9 percent, with energy and life-sciences industries planning to increase employee rewards at 3.6 and 3.3 percent, respectively.

Securities Class Actions May Hurt Shareholder Value
Few securities class-action lawsuits improve the value of the underlying security for investors, according to a new study published in the Financial Analysts Journal that examined the effects on stock value at 650 companies after they faced suits. Insider trading cases were the only examples of improved shareholder value after the suit had closed. The study noted that this was most likely because those executives would also be removed from the company, thereby improving corporate governance. Most cases are settled for a fraction of damages claimed in the suit and do not result in a statistically higher return on investment for shareowners.

Succession Issue Raised Anew As Jobs Withdraws from Apple
Apple CEO Steve Jobs is taking medical leave for the third time since 2004. Apple, which disclosed the news early on the Martin Luther King holiday when U.S. markets were closed, did not specify why its visionary leader would be absent. The computer maker had record sales and revenues through the holiday season driven largely by iPad and iPhone sales. Apple also did not say when Jobs would return, driving up the worst fears about Jobs’ medical condition. Jobs, a survivor of pancreatic cancer, said in an email to employees that Chief Operating Officer Tim Cook would again be responsible for day-to-day operations. Jobs said he would remain CEO and be involved “in major strategic decisions.”