Financial Regulatory Forum

By Julie DiMauro

BOSTON/NEW YORK, May 9 (Thomson Reuters Accelus) - Financial services firms may face more negligence cases brought by the U.S. Securities and Exchange Commission, reflecting a greater willingness by the commission to base charges on negligence findings, industry professionals were told at a Thomson Reuters forum.

“What we are seeing is a willingness to actively go out and charge negligence,” Ian Roffman, a partner at Nutter, McClennen & Fish LLP, told compliance officers and others in a panel discussion on SEC enforcement hosted by the Thomson Reuters Governance, Compliance and Risk division.  (more…)

By Nick Paraskeva

NEW YORK, April 4 (Thomson Reuters Accelus) - The U.S. Securities and Exchange Commission plans to reach into the boardroom to assess a financial firm’s culture of compliance, a senior commission official told a conference in New York.

The agency, departing from traditional practice to take a page from bank regulators, intends to have direct discussions with the firm’s board about the regulatory issues board members and senior management team are paying attention to, and how they are navigating them. (more…)

By Alex Lee

NEW YORK, March 23 (Business Law Currents) – In an environment of increased corporate governance scrutiny, succession planning through both departures and crises is a focal point for shareholder interests and transparency-related issues. Companies historically kept succession plans close to their vests, but recent succession episodes at Apple Inc., Bank of America Corpand Hewlett-Packard have highlighted the multitude of issues that shareholders have with respect to the concern shown by boards on such a significant matter.

In October 2009, the Securities and Exchange Commission (SEC) reversed its long-held position whereby the exclusion of shareholder requests for disclosure of succession plans from proxy statements was allowed. The SEC clearly recognized that succession planning-related matters are within the remit of shareholder proposals, and that boards must significantly address the issues as leadership voids or uncertainty could adversely affect companies. (more…)

By Alex Lee

(Business Law Currents) – Dodd-Frank related governance issues such as say-on-pay and proxy access have been well known focal points for boardrooms during the 2012 proxy and annual meeting season, but another issue has topped headlines and is of increasing concern to boardrooms: business intelligence gathering activities. Faced with shareholder oversight, the risks posed by private intelligence gathering firms and governmental regulation in this area, companies must ensure that they abide by accepted best practices, the highest ethical standards and standards for compliance with laws.

Shareholders and governing bodies have enhanced scrutiny of corporate governance, with scandals such as MF Global highlighting abuses of corporate power and potential criminal activities by company officers. Effective corporate governance principles dictate that those who conduct unethical or, worse, illegal activities on behalf of a company must be brought to heel. (more…)

By Emmanuel Olaoye

NEW YORK, Feb. 9 (Thomson Reuters Accelus) - Two vivid reminders of the job-security perils faced by compliance officers and others who sound alarms at company practices were provided last week by a congressional hearing into the MF Global bankruptcy and a federal appeals court ruling on whistleblower law.

The risks may be part of the job, but skillful management of internal policies and wise self-protection can help avoid career-threatening retaliation, experts said. (more…)

By Stuart Gittleman

NEW YORK, Jan. 12 (Thomson Reuters Accelus) — The National Association of Corporate Directors has launched a program to recruit generals and admirals for membership on boards of directors, with the aim of advancing standards of professionalism and increasing diversity of perspective, the group said Thursday.

The first program will be held Tuesday, February 28 through Thursday, March 1 in Washington, DC. Interested veteran and active-duty military flag and general officers can request an invitation and review the agenda, speakers and program details by clicking here.

(more…)

By Lucy P. Marcus
The views expressed are her own.

The high profile appointment of Chelsea Clinton to the board of IAC/InterActiveCorp comes at a time when the individual and collective performance of board directors is being scrutinized more thoroughly and more publicly than ever before. A good board can be rocket fuel or it can be rocks in an organization’s pockets. But what does a  new board member need to be active, engaged, and dynamic?

The principles are the same regardless of whether this is somebody’s first or tenth appointment, and their significance does not diminish with every new appointment either. Every boardroom has its own personality, its own cadence, and its own means of getting things done, and there is no way of knowing for sure how that works till you are around the table. But every board deserves the best from each of its members—long-serving and new alike.

The sooner new board directors are comfortable and familiar with the landscape in which their organization operates, with the challenges it confronts, the sooner they can make a meaningful contribution to the organization and help it deal with its current challenges as well as future-proof it.

By John Mackie

TORONTO, Aug. 23 (Business Law Currents) For institutions, regulators and investors, executives who wear two hats, such as CEO and chairman, are in an inherent conflict of interest. The situation is complicated further when roles are shared, such as in cases of co-chairs or co-CEOs.

One company that has been the center of this ongoing debate in Canada is Waterloo-based Research in Motion (RIM). In RIM’s case, the complexity is taken to an extreme, with co-CEOs who are also co-chairs. (more…)

By Patricia Lee

(Complinet) Taiwan’s Financial Supervisory Commission has stepped up enforcement of its corporate governance regulations by making it mandatory for listed firms and financial institutions to appoint independent directors and set up a remuneration committee. The latest regulations will carry a penalty in the event of any breaches, an FSC official told Complinet, speaking on condition of anonymity.

According to the FSC official, although the requirement to appoint independent directors was not entirely new, the commission’s latest move built on its existing corporate governance regulations. It further expands their reach to cover the entire spectrum of the financial services sector.

Securities investment trust enterprises and integrated securities firms which are not subsidiaries of a financial holding company, exchange- or over-the-counter-listed futures commission merchants, as well as exchange- or OTC-listed non-financial institutions each with a paid-in capital of at least NT$10 billion ($344.7 million), but not exceeding NT$50 billion ($1.7 billion), are the four additional types of firms in the financial sector now covered under the corporate governance regulations.

By Erik Krusch

NEW YORK, March 23 (Westlaw Business) – Classified boards may be moving towards the endangered species list, as investors and even management are hunting them down.

Valero and Biogen Idec’s management teams, for example, are recommending that shareholders approve amendments declassifying their respective boards. Other corporations, such as Alcoa and McDonald’s Corp, however, are fighting their shareholders’ attempts to level their staggered boards. It remains to be seen how many staggered boards emerge from this proxy season unscathed. (more…)