Category: Corporate Governance
Fee-shifting bylaw developments in the courts
by Cydney Posner Those expecting that the Delaware court, in a case involving Hemispherx, would soon address the as-applied validity of a fee-shifting bylaw may be disappointed. (As discussed in this post and this Cooley Alert, the Delaware Supreme has already ruled in another case that a “fee-shifting” bylaw adopted […]
Are the calls for shareholder democracy merely ceremonial?
by Cydney Posner According to this paper, despite all the sturm und drang associated with corporate governance issues, these issues amount to little more than corporate governance kabuki—highly stylized, symbolic rituals with little substantive effect. (Although, for fun, check out this article from Slate, which tells us that we’re all misusing “kabuki,” […]
Dept. of: What Were They Thinking?
by Cydney Posner As reported in these articles from the NYT‘s DealBook and Business Insider, the New York State Dept of Financial Services has imposed a $25 million fine on PwC and a two-year ban on its consulting unit. The settlement agreement stated that PwC’s consulting work “did not demonstrate the necessary objectivity, […]
Outsource the Board?
by Cydney Posner Here’s a novel idea: outsource the board of directors. This article from The Economist reports on a concept outlined in a recent law review article that takes the notion of “professional director” one step further. Boards of directors obviously play a critical role in the corporate world, but, according […]
Has pay for performance reached a tipping point?
by Cydney Posner Are companies starting to take pay for performance more seriously? That’s the conclusion drawn in this article from CFO.com that reports on a study by comp consultant Aon Hewitt. While the trend has been prominently discussed for several years, “the depth of that trend may have been […]
The SEC in the crosshairs
First we have a couple of articles discussing a study, “Political connections and SEC enforcement,” in the forthcoming Journal of Accounting and Economics, that purports to show that “[l]ong-term PAC contributions are effective at deterring SEC enforcement.” Then there is an, shall we say “unflattering,” appraisal in the NYT of […]
The perils of failing to take internal controls seriously
by Cydney Posner Here’s a warning shot across the bow from the SEC to take internal controls –- and representations regarding the same — very seriously. You’ll recall that SOX 404 and related rules instituted a new regime regarding reporting and evaluation of internal control over financial reporting (ICFR), including […]
Shareholders reject fewer golden parachutes this year
by Cydney Posner As reported in this article in the WSJ, compensation consultant Towers Watson is reporting that shareholders seem to be more willing this year than last to approve golden parachutes in the context of acquisition transactions. As you know, Dodd-Frank and related rules require that, in connection with solicitation […]
Efforts on the rise to enhance shareholder-director engagement
by Cydney Posner Earlier this year, two proposals were floated to enhance shareholder engagement with directors, one from a working group called the Shareholder-Director Exchange and the other from The Conference Board. While it may now be almost de rigueur for management to engage with shareholders, engagement between shareholders and […]
Study shows fewer and less severe restatements over decade post-SOX
by Cydney Posner Apparently, SOX had some a beneficial impact on financial reporting. An academic study commissioned by the Center for Audit Quality reveals a substantial decline in both the number and severity of financial restatements during the period 2003 through 2012. The study was intended to consider the impact […]
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