Tag: director independence
SEC charges company for alleged misstatements regarding director independence and disclosure control failures
As we head into a new proxy season, this SEC order involving settled charges against Leaf Group Ltd. might be a good case to keep in mind. In this case, the SEC charged that Leaf did not adequately identify and analyze—and did not maintain effective disclosure controls and procedures to identify and analyze— whether some of its directors were “independent” and whether there were “interlocking relationships between its directors and executive officers,” which led to “material misstatements and omissions in certain of its public filings,” including its proxy statement. As part of the settlement, Leaf was ordered to pay a civil penalty of $325,000. The company’s alleged failings as outlined in the order might serve to augment your seasonal checklist for examining issues of director independence.
Are lone-insider independent boards too much of a good thing?
by Cydney Posner At more than half of the companies in the S&P 1500, the CEO is the lone board insider, according to this study and the related article in the WSJ. Isn’t that a good thing? Maybe not, say the authors, whose study showed that lone-insider boards can lead to lower profits, excessive […]
Shareholder proposals regarding lead director tenure: a harbinger of things to come? (Updated)
by Cydney Posner The topic of director tenure has increasingly become the focus of both academics and investors. Some argue that long-term directors contribute deep knowledge of the company and provide experience, historical memory and continuity to the board — along with the gravitas sometimes necessary to challenge management. Others […]
Scrutiny of director tenure continues: is it the next cause célèbre?
by Cydney Posner The scrutiny of pale, stale and male boards continues, this time focused on the “stale,” that is, long-tenured directors. According to the WSJ, institutional investors are increasingly questioning whether more turnover on boards might be appropriate.
Paper debunks seven board myths
by Cydney Posner In “Seven Myths of Boards of Directors,” two academics from Stanford Business School set about debunking some of the most common and persistent expectations regard best practices in board structure, composition and procedure. The authors contend that these seven myths “are not substantiated by empirical evidence.”
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