In late May, the Lotos Club in Manhattan hosted the third Corporate Secretary East Coast Think Tank, where speakers and participants from a wide variety of corporations addressed the most pressing governance and compliance issues facing US companies today. Panelists included in-house general counsel and corporate secretaries, law firm partners, financial printers and records management experts. Under discussion were issues like the new world of attorney/client privil...
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Corporate Secretary magazine has partnered with Foley & Lardner to produce a series of webcasts that will continue throughout the year, covering timely issues in corporate governance, compliance and risk management. Early June marked the first installment, which centered on ‘The new era of ethics and privilege: solving the DoJ, SEC and Sarbanes-Oxley puzzle.’ Elizabeth Gray, partner at Foley & Lardner and former assistant director of the SEC’s division...
In May, the Nasdaq Stock Market launched Board Recruiting (www.boardrecruiting.com), a new service aimed at public and private companies. Billed as the first ‘online service of its kind,’ Board Recruiting is essentially a search tool for identifying board members, using a profile-matching system to connect potential board candidates and companies seeking directors.
Given the heightened scrutiny boards have rece...
The perfect storm of option-accounting began in 2002 with the Sarbanes-Oxley Act. Once the floodgates were open, a number of other challenges arose: the Financial Accounting Standard (FAS) 123R in 2004, stock option backdating scandals in 2006 and the final IRC Section 409A regulations in 2007. One of these challenges is particularly prescient right now, FAS 123R, which requires that the fair value of stock options granted to employees be recorded as an expense. As a...
In May, the UK's Financial Services Authority (FSA) issued advice in its 'Market Watch' newsletter about shareholder activism, warning investors not to cross the line into market abuse. It was the first time the regulator had issued information publicly on the subject of activists and the boundaries between legitimate trading and market manipulation.
The newsletter included warnings about potential insider trading arising from funds working together to build a...
Where there’s smoke, there’s fire. It’s an old adage, but often old sayings are the most accurate. This certainly appears to be the case in some recent scandals. Options backdating has received more than its share of coverage and debate, but one issue closely tied to the scandal, and that is not garnering the attention it should, is the modification of corporate records. Here, the minutes of board meetings take center stage.
Minutes are close to the hear...
Investors aren’t happy, and company leaders are feeling the effects. Over the past two years one CEO after another left companies after questionable results for the shareholders, but windfalls for the managers. Robert Nardelli of Home Depot got a package reputedly worth $210 million. When Hank McKinnell was ousted from Pfizer, it was with $83 million in pension benefits. Now, shareholders are demanding greater information about exactly how much executives are getti...
Retaliation against company employees who bring inappropriate or illegal action to light has long been a problem. With the implementation of Section 806 of Sarbanes-Oxley, the issue became even more pressing. Section 806 requires that the audit committees of public companies establish and maintain systems to deal with whistleblowers who raise concerns about accounting or audits.
The SEC recognizes that companies need flexibility to design appropriate and effec...
What if an investor borrowed shares or engaged in an equity swap, acquired voting rights on your company’s record date, and then attempted to alter the outcome of a pivotal election?
Been there, done that, some hedge funds could boast. Known as ‘empty voting’, this practice has rocked a handful of companies with highly contentious shareholder contests underway. Although the practice is not exactly an everyday occurrence, the issue recently moved from ac...
Delaware, California, New York. These are the states that generally come to mind when thinking about influential corporation law. Now there is a new player on the block. North Dakota, one of the mostly thinly populated states in the US. And with only two publicly listed companies, it is hardly the bastion of corporate development.
But lawmakers in the state are hoping this will change with the passing of new laws that are being touted as the most investor fri...
