Monthly Archives: January 2016

Ten Topics for Directors in 2016

Posted by Kerry E. Berchem, Akin Gump Strauss Hauer & Feld LLP, on

Wednesday, January 6, 2016

Kerry E. Berchem is partner and head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on a summary of an Akin Gump publication authored by Ms. Berchem, Rick L. Burdick, Tracy Crum, Christine B. LaFollette, and J. Kenneth Menges, Jr. The complete publication is available here.

U.S. public companies face a host of challenges as they enter 2016. Here is our annual list of hot topics for the boardroom in the coming year:

Oversee the development of long-term corporate strategy in an increasingly interdependent and volatile world economy
Cultivate shareholder relations and assess company vulnerabilities as activist investors target more companies with increasing success
Oversee cybersecurity as the landscape becomes more developed and cyber risk tops director concerns
Oversee risk management, including the identification and assessment of new and emerging risks
Assess the impact of social media on the company’s business plans
Stay abreast of Delaware law developments and other trends in M&A
Review and refresh board composition and ensure appropriate succession
Monitor developments that could impact the audit committee’s already heavy workload
Set appropriate executive compensation as CEO pay ratios and income inequality continue to make headlines
Prepare for and monitor developments in proxy access

Corporate Governance and Blockchains

Posted by David Yermack, NYU Stern School of Business, on

Wednesday, January 6, 2016

Accounting, Backdating, Bitcoin, Blockchain, Books and records, Capital markets, Debt securities, Derivatives, Hidden ownership, Information environment, Ownership, Related party transactions, Shareholder activism, Shareholder voting, Stock options, Transparency
More from: David Yermack

David Yermack is Professor of Finance at the NYU Stern School of Business. This post is based on a recent article authored by Professor Yermack.

In the paper, Corporate Governance and Blockchains, which was recently made publicly available on SSRN, I explore the corporate governance implications of blockchain database technology. Blockchains have captured the attention of the financial world in 2015, and they offer a new way of creating, exchanging, and tracking the ownership of financial assets on a peer-to-peer basis. Major stock exchanges are exploring the use of blockchains to register equity issued by corporations. Blockchains can also hold debt securities and financial derivatives, which can be executed autonomously as “smart contracts.” These innovations have the potential to change corporate governance as much as any event since the 1933 and 1934 securities acts in the United States.

ISS Proxy Access FAQs: Problematic Proxy Access Provisions

Posted by Howard B. Dicker, Weil, Gotshal & Manges LLP, on

Tuesday, January 5, 2016

Boards of Directors, Charter & bylaws, Director nominations, Executive Compensation, Institutional Investors, ISS, Precatory proposals, Proxy access, Proxy advisors, Shareholder proposals, Shareholder rights, Shareholder voting
More from: Howard Dicker, Joanna Jia, Kaitlin Descovich, Lyuba Goltser, Weil Gotshal

Howard B. Dicker is a partner in the Public Company Advisory Group of Weil, Gotshal & Manges LLP. This post is based on a Weil publication by Mr. Dicker, Lyuba Goltser, Joanna Jia, and Kaitlin Descovich.

Institutional Shareholder Services (ISS) has published revised FAQs for its U.S. Proxy Voting Policies and Procedures, including two new FAQs directly related to proxy access. This post provides an update to our Alerts dated October 21, 2015 (available here) on Navigating Proxy Access and November 23, 2015 (available here, and discussed on the Forum here) on ISS and Glass Lewis Updated Voting Policies.

Where are the Best (Corporate) Law Professors Teaching?

Posted by Marco Ventoruzzo, Bocconi University and Pennsylvania State University, on

Tuesday, January 5, 2016

Brazil, Corporate governance, France, Germany, Hong Kong, Italy, Rankings, Singapore, Social capital, Social networks, SSRN, UK
More from: Marco Ventoruzzo

Marco Ventoruzzo is a comparative business law scholar with a joint appointment with the Pennsylvania State University, Dickinson School of Law and Bocconi University. This post is based on an article authored by Professor Ventoruzzo.

Are the best law professors teaching at the best law schools in the United States? And how can the best law schools around the world be evaluated in terms of the scholarship their professors produce? On this website we talk a lot about corporate governance, but what about the governance of scholars of corporate governance? Is the Emperor naked?

I recently wrote an essay that contributes to addressing these questions by examining empirically a specific issue: whether the top-ranking law schools employ the most productive, authoritative and influential scholars of corporate law. For the reasons I explain in the paper, corporate law can be used as an effective and useful proxy also for other areas.

Global and Regional Trends in Corporate Governance in 2016

Posted by Anthony Goodman, Russell Reynolds Associates, on

Monday, January 4, 2016

Accountability, Board composition, Board leadership, Board performance, Boards of Directors, Brazil, Diversity, Engagement, EU, Europe, India, Institutional Investors, International governance, Japan, Securities regulation
More from: Anthony Goodman, Rusty O'Kelley, Russell Reynolds

Anthony Goodman is a member of the Board Effectiveness Practice at Russell Reynolds Associates. This post is based on an Russell Reynolds publication authored by Mr. Goodman and Jack “Rusty” O’Kelley, III, available here.

Over the past few years, institutional investors have held boards increasingly accountable for company performance and have demanded greater transparency and engagement with directors. The real question investors are asking is How can we be sure we have a high-performing board in place? Most of the governance reforms currently under discussion globally attempt to address that question.

Around the world, large institutional investors continue to push hard for reforms that will enable them to elect independent non-executive directors who will constructively challenge management on strategy and hold executives accountable for performance (and pay them accordingly). When trust breaks down, activist investors (often hedge funds) move in to drive for change, often with institutional support.

Resource Extraction Payments

Posted by Nicolas Grabar & Sandra Flow, Cleary Gottlieb Steen & Hamilton LLP, on

Monday, January 4, 2016

Accountability, Anti-corruption, Compliance and disclosure interpretation, Disclosure, Dodd-Frank Act, International governance, Reporting regulation, SEC, SEC enforcement, SEC rulemaking, Securities regulation, Transparency
More from: Daniel Chor, Nicolas Grabar, Nina Bell, Sandra Flow, Cleary Gottlieb

Nicolas Grabar and Sandra L. Flow are partners in the New York office of Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb memorandum by Mr. Grabar, Ms. Flow, Nina E. Bell, and Daniel Chor.

On December 11, 2015, the Securities and Exchange Commission issued a proposed rule on disclosure of resource extraction payments, over two years after a federal court vacated a prior version of the rule. The new proposal is similar in many ways to the SEC’s original rule, adopted in August 2012—in large part because the SEC is implementing a detailed congressional directive contained in Section 1504 of the 2010 Dodd-Frank Act. However, in addition to addressing the deficiencies the court found in the original rulemaking, the SEC has made other notable changes to reflect global developments in transparency for resource extraction payments, particularly in the European Union and Canada.

Recovery Planning for Large National Banks

Posted by C. Andrew Gerlach, Sullivan & Cromwell LLP, on

Sunday, January 3, 2016

This post is based on a Sullivan & Cromwell LLP publication by C. Andrew Gerlach, Rebecca J. Simmons, Mark J. Welshimer and Connie Y. Lam. Mr. Gerlach, Ms. Simmons, and Mr. Welshimer are partners in the Financial Services Group; and Ms. Lam is a firm associate.

On December 16, 2015, the Office of the Comptroller of the Currency (the “OCC”) solicited public comment, through a Notice of Proposed Rulemaking (the “NPR”), [1] on proposed guidelines to establish standards for recovery planning by certain large insured national banks, insured Federal savings associations and insured Federal branches of foreign banks (the “Guidelines”).
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CFTC’s Proposed Rules on Cybersecurity

Posted by Dan Ryan, PricewaterhouseCoopers LLP, on

Saturday, January 2, 2016

Dan Ryan is Leader of the Financial Services Advisory Practice at PricewaterhouseCoopers LLP. This post is based on a PwC publication by Mr. Ryan, Sean Joyce, Joseph Nocera, Jeff Lavine, Didier Lavion, and Armen Meyer.

Last week, the Commodity Futures Trading Commission (CFTC) proposed cybersecurity regulations for electronic trading platforms, clearing organizations, and data repositories. Most importantly, the proposal calls for five types of systems testing, the most impactful of which is the requirement that organizations test key controls (e.g., access to sensitive data or procedures that control changes to critical systems).

Guidance from other regulators thus far has come in the form of examination guidelines or self-assessment tools rather than regulations. [1] The CFTC’s proposal would be the first cybersecurity regulation, and some other regulators are likely to follow suit. [2]

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Monthly Archives: January 2016

ISS Proxy Access FAQs: Problematic Proxy Access Provisions

Global and Regional Trends in Corporate Governance in 2016

Resource Extraction Payments

Recovery Planning for Large National Banks

CFTC’s Proposed Rules on Cybersecurity

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