Category: Corporate Governance
Results of 2014 proxy season
by Cydney Posner This article from Compliance Week concludes that the 2014 proxy season turned out to be a “relatively quiet one, as investor gadflies and proposals on social issues gained little support from fellow shareholders. Companies also generally fared better on ‘say-on-pay’ votes.”
The auditors’ “little speech” about critical audit matters
by Cydney Posner According to former SEC chief accountant Lynn Turner, “the auditor’s report is based on a model that ‘has not changed significantly since the last Ford Model A rolled off the production lines in the early 1930s.’” As discussed in this CFO.com article, “[j]ust as they did 80 […]
Say-on-pay failures more common at midsize companies
by Cydney Posner According to this article in the WSJ, when it came to say on pay this year, shareholders were toughest on midsize companies. According to a review of nearly 2,800 annual meetings by Broadridge Financial Solutions Inc. and PwC, 5% of midsize companies (with market values between $2 billion […]
EY analysis of first year of conflict minerals reporting
by Cydney Posner Ernst & Young has prepared an analysis of the first year of conflict minerals reporting, focused on reporting by S&P 500 companies. Even for companies in the S&P 500, the analysis concludes that “tracing the sourcing of conflict minerals was challenging for these large companies.” According to the […]
Is sunlight really the best disinfectant? Does transparency cure conflicts?
by Cydney Posner In this column from Sunday’s NYT, Gretchen Morgenson discusses a recent academic study, “Will Disclosure of Friendship Ties between Directors and C.E.O.s Yield Perverse Effects?,” which “suggests that lax oversight can result when a director of a company is friendly with the chief executive overseeing it.” Standing […]
Are BODs doing appropriate succession planning?
by Cydney Posner Apparently not, according to an article in the Washington Post. A recent study shows that only about half the directors surveyed thought their companies had selected a specific successor to be the next CEO. The survey, by Stanford University’s Rock Center for Corporate Governance and the Institute for […]
Corporate gadflies lead the way on shareholder proposals in 2014
by Cydney Posner According to this article in the WSJ, “corporate gadflies,” defined as individual investors who repeatedly file similar proposals among a number of companies, were responsible for a third of shareholder proposals through May 30. So concludes a study by Proxy Monitor of 212 of the largest (by revenue) […]
Companies involved in M&A activity more likely targets of cyberattacks
by Cydney Posner According to this article in the WSJ, companies involved in M&A activity had better make special efforts with regard to cybersecurity. In the course of the transaction, thieves may try to gain access to internal systems. extract negotiating positions or other information about the transaction, or make […]
SEC employs new tools to detect earnings manipulation and other illegal activity
by Cydney Posner A couple of recent articles discuss new tools and methods the SEC and others are using to detect suspect accounting. Some ways to detect false accounting have been known for a long time. Regulators’ antennae tend to go up if a company is moving items off the […]
PCAOB adopts new standard and amendments regarding related-party and unusual transactions
by Cydney Posner The PCAOB has adopted a new auditing standard and related amendments addressing related-party transactions, significant unusual transactions and transactions with executive officers. (See the standard and related fact sheet.) These transactions are considered to pose an increased risk of material misstatement in financial statements, having been a […]
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