What's a poor secretary to do?

Mar 01, 2008
<p>Credit crunch coping strategies for compliance departments</p>

To borrow a phrase from the Bard of Avon, ‘Now is the winter of our discontent.’ That phrase was uttered at the very beginning of King Richard III by the title character himself. He goes on to lay out his detailed plans to the audience – plans involving murder, lies, seduction and the stealing of the throne of England itself. As Richard says, ‘I am determined to prove a villain.’

But that kind of planning and plotting is hardly useful to most corporate secretaries nowadays, much as they might like to indulge in palace intrigues within their corporations.

In the midst of early 2008 – I’m writing this at the beginning of February – the stock market is falling as often as snow flakes in Colorado, oil prices are soaring over the rainbow, the Federal Reserve is issuing surprise rate cuts, and Congress and the White House are working on an economic stimulus plan. Well, it’s hard not to think of this as the winter of our economic discontent. And it’s downright difficult not to engage in a little wishful thinking that murder, lies and seduction might not solve the problems a lagging economy could dump on us. (Actually, speaking from a strictly personal standpoint, I often fantasize about the possibilities of murder, lies and seduction. What’s that? Oh, sorry, I digress . . .)

Let’s assume for a minute that the economy turns south, at least enough to make the shoes of CEOs feel too tight. Despite the best efforts of the Fed, despite the stimulating work of Congress and the President, the economy refuses to cooperate and refuses to improve. This could result in layoffs. A few companies have already announced workforce reductions, in fact. And the auto manufacturers have offered buyouts to encourage early retirements.

In the land of corporate secretaries, this could mean that a paralegal or two is trimmed right off your staff. Maybe it will even be that recent law school graduate you were grooming to take over upon your retirement so you could spend your days on the golf course or scuba diving in the Caribbean. At smaller companies – where secretaries often do completely without paralegals and staff attorneys even when the economy is booming – maybe there will be a cutback on outside attorneys’ fees. Either way, many corporate secretaries will be asked to make do with a lot less than they have become accustomed to.

But isn’t that what’s been going on since Sarbanes-Oxley first came into our lives? Every Society of Corporate Secretaries and Governance Professionals (SCSGP) benchmarking survey since SOX shows that while the vast majority of corporate secretaries have more work to do, they haven’t seen and increase in resources to ease the burden. They haven’t been allowed to hire larger staffs. If money has been spent to meet compliance challenges, the dollars have generally found their way into IT budgets to handle the compliance systems or into the pockets of auditors and auditing consultants. Poor corporate secretaries soldier on with whatever resources they have.

If corporate leadership left you to face SOX and the SEC’s recent compensation discussion and analysis (CD&A) requirements without extra help when things were good, isn’t it likely that they will trim your staff and/or budgets when faced with a poor economy? Isn’t it likely that they’ll assume you’ll muddle through, as you always have?

Is there help coming from anywhere else? Well, Congress has already pulled all the rabbits that it possibly could from its hat. The same goes for the Federal Reserve. And the SEC . . . well, anyone at a smaller company knows how sensitive the SEC has been to their problems in meeting their compliance challenges. The SEC is continuing to grant delays in Section 404 compliance but it will not discuss waiving the need for them to ultimately comply under 404. Getting a delay isn’t a bad thing, but it doesn’t let the smaller companies off the planning-and-preparation hook, and given how thinly stretched they already are, that’s a very painful hook to be on.

And, just in case all of the above hasn’t sunk you into a deep depression, how’s this: if the economy falters, do you think shareholder proponents will take the next proxy season off? Maybe grant Corporate America a bye on all those lovely proposals on ‘say on pay’? Or the environment? Or political contributions? (In an election year?). Do you think there is even the faintest possibility that Institutional Shareholder Services will send out an all-hands advisory, saying, ‘Listen, shareholders, Corporate America has too much on its plate this year, what with the economy and all, so we suggest that all shareholders hold off on making proposals this year?’ Or, maybe, sensing weakness, the proponents and advisory firms will swoop in for the kill.

So, it may well be considered by many as the winter of our discontent. Murder, lies and seduction are not going to get the job done. There’s no relief in sight from the government or from your shareholders. Everywhere you turn things look bleak and desolate. No hope. No help.

And yet, that’s not quite true.

At the risk of seeming extremely self-serving, might I suggest that help with many of these challenges is to be found at my employer – the SCSGP.

Let’s say that you happen to need a charter for a new board committee or that you need a sample resolution for something that is facing your board. You need to stay abreast of crucial developments regarding Section 404 compliance or stock exchange listing standards. You want to make your voice heard regarding a newly proposed rule by the SEC. You need and/or want all of these things but haven’t got the staff or time to do it. Well, the Society does.

Let’s say that you’re a one-person shop: corporate secretary, cook and bottle-washer. If so, you could really use a network of colleagues to brainstorm with, to discuss the latest wrinkles in CD&A, or to hear others’ experience with e-proxies and the new ‘notice and access’ process. The Society has that network.

I hate to sound like one of those self-help commercials that you hear on the radio or on late-night cable television, but help is available. You don’t have to face your troubles alone anymore. There is strength in numbers. A burden shared is a burden halved. A stitch in time saves nine. (Okay, that last sentence has nothing to do with the rest of this column, but I was running out of self-help clichés.)

Save me before I use another cliché. If you’re a member of the Society, go ahead and take advantage of it. If you’re not, join up. (And please do it soon, or my next stop will be selling the Amazing Rachet-o-Rama: ‘does it all, darns socks, rotates your tires, and stirs soup and oatmeal!’)

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