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 […]
DealBook column addresses role of counsel
by Cydney Posner Here is a thought-provoking article in the NYT’s DealBook, that discusses the failures on the part of GM’s in-house lawyers to effectively represent their client, GM. The question raised is, why, with numerous lawyers on the scene, “none took responsibility for making sure their client did not […]
Proxy advisory firm guidance expected, again
by Cydney Posner Word has it that the SEC will soon issue “guidance” designed address to proxy advisory firms, such as ISS. According to the WSJ, the new guidance will focus primarily on disclosure of conflicts of interest. But don’t hold your breath—similar guidance was expected in 2012. (See my […]
FASB issues new revenue recognition standard
by Cydney Posner Apparently, there are now 700 pages of new FASB rules about revenue recognition. Thank your lucky stars that you don’t have to read them (unless you’re an accountant, of course), but it’s good to know that they are out there. According to this article in Compliance Week, […]
Direct to court for shareholder proposals? The Finale
by Cydney Posner You might recall that, recently, three companies facing shareholder proposals from John Chevedden et al., a prolific shareholder activist, adopted a “direct-to-court” strategy, bypassing the SEC no-action process. In each of these cases, the court handed a victory to Mr. Chevedden, refusing to issue declaratory judgments that […]
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