Welcomed warmly by fellow directors and friends at the opening NACD Chicago Chapter meeting on September 18th, Ed Liddy gave board members the benefit of his eleven-month stint as chairman and CEO of AIG, his one dollar a year job that was called both hopeless and thankless by critics and supporters alike.
He had six suggestions. Continue reading
Barbara Hackman Franklin has had an impressive career. The former U.S. Secretary of Commerce is a respected advocate and advisor to American companies doing business in international markets, notably China. She has been a director of 14 companies during her 25 years of service on corporate boards. Currently, she is a director at Aetna and Dow Chemical. In addition, she serves as the chairman of the National Association of Corporate Directors, the independent, non-profit organization whose 10,000 members represent the boards of companies from the Fortune 50 to smaller public companies, private companies, private companies, and nonprofit organizations. Continue reading
In the face of the changes that are coming to corporate governance, boards would be well advised to begin their examination of the input they receive from shareholders and stakeholders by looking for common ground.
A synonym for input is contribution. Imagine if boards saw the comments and suggestions that they receive from shareholders as the way that shareholders want to contribute to the improvement and long-term strength of the company. Continue reading
Ralph Ward of Boardroom Insider asked how boards should handle the ban on broker voting.
Naturally, boards will want to analyze the broker element of the proxy voting for their company. Yet any outreach to shareholders by the board should begin with a board-shareholder communication plan. Continue reading
SEC Chairman Mary Schapiro sees proxy access rules as the way to give shareholders a greater say on choosing directors and a credible path for ousting boards. Directors have reason to be concerned. It’s clear that some form of proxy access will pass. However, this is not a time for directors to wait and see. Rather, this is a clarion call for boards to respond strategically rather than wait to comply.
Wednesday’s Wall Street Journal describes the campaign by law firms, associations and companies to derail or weaken the current SEC proposal, which makes it easier for shareholders to nominate directors. Continue reading
Proving that no good deed goes unpunished, Chairman Emeritus and CEO Emeritus of AT Kearney Fred G. Steingraber became president of his village of Kenilworth last spring. Little did he know that problems with transformers exacerbated by turbulent summer thunderstorms would wipe out electricity for extended periods in this elite North Shore village. Not only did Steingraber return every irate citizen’s phone call but he used the web in addition to newsletters to communicate what he, the town staff and ComEd were doing about the problem. In setting up a town meeting with ComEd, he scheduled it for October , not only to give ComEd time to resolve some of the issues but to enable all interested citizens to attend without having to readjust their August vacation schedules. Continue reading
What has fueled the activism of shareholders in the past 25 years? We know that periods of flat or negative growth, flat or negative profitability and low stock growth can drive traditionally passive institutional shareholders to activism. (In fact, according to Shareholder Activism Insight, the likelihood is 79 percent.)
But long-time participants and observers in the corporate governance community think it’s much more basic: it’s a sense of voicelessness and helplessness felt by major institutional investors. These shareholders believe they suffer from lack of access—to the directors, to information. This “under-representation” feeds some activists’ demands to be recognized as owners, whether it’s advocating for “say on pay”, majority voting and in even a battle for board seats. Continue reading
Directors unanimously agree, the pre-board package is bigger than ever before: There’s more reading. The detail is more dense. And, the issue of risk permeates every subject. Is it any wonder that both the length and number of board meetings has increased for many boards?
What were once all day meetings three or four times a year–or 24 hours– have now expanded. There are more meetings, more telephonic meetings, and many more formerly unheard of one-on-one inter-meeting calls with individual directors. Continue reading
Directors remain reluctant communicators. For years they have operated from behind the closed doors of the boardroom. Yet, the failure of some of the country’s most iconic companies as well as the devastating losses in stock portfolios have made investors wary: what’s going on in the boardroom?
In an effort to restore trust in the financial system, SEC Chairman Mary Schapiro wants to increase transparency and the quality of disclosure along with shareholder access to proxy voting. Continue reading
In principle, corporate directors have embraced greater transparency and communication with shareholders through various organizations including the Business Roundtable and the National Association of Corporate Directors. Yet individually, most directors are reluctant to interact with shareholders. Many invoke (while secretly expressing gratitude for) Regulation FD.
“Communicating is not in our DNA,” one director confided. Continue reading