|
 |
|
Are you reading a pass along copy? Get
your
own FREE subscription. To unsubscribe, please click HERE
and send a blank email. You will be automatically unsubscribed.
Directors & Boards
Robert H. Rock
Publisher
James Kristie
Editor
Lisa
Cody
Chief Financial Officer
David Shaw
Publishing Director
Scott Chase
Advertising Sales Director
Nancy Maynard
Account Executive
Barbara Wenger
Subscriptions
Jerri Smith
Reprints
1845 Walnut Street
Suite 900
Philadelphia, PA 19103
+1 (215) 567-3200
The Directors & Boards e-Briefing is produced by GRID Media LLC.
From Jim Kristie | Article of the
Month | Columnist
Reader Profile |
Research | News |
Cary Grant, Exec Comp Coach
Getting pushback on your pay? Follow the Hollywood screen legend’s
dictum.
The heavy bombardment should start flying soon when the figures are
released on executive pay in this season’s proxies.
Millions of words are spilled ad nauseam each and every year on
executive compensation — who got what … why they got it … were they
deserving of it … the best way to pay and be paid ... and on and on.
How many trees fall to support this cottage industry of compensation
storytelling?
But I ask you: Can anything be truer or more definitive than the simple
11-word statement uttered by one of the most popular actors of all
time?
Here is what Cary Grant advised: “Do your job and demand your
compensation — but in that order.”
That’s proper counsel for anyone — from the CEO to the shop floor.
If you’re worth it, and you know you’re worth it, and your board knows
you’re worth it, then be steadfast under attack.
No one from the outside can possibly know the real job that’s being
done to create value. Nor the sacrifices that are being made — the
stress, the long hours, the weekends, the foregone vacation time, the
family sacrifices, the health sacrifices.
Sure, there are abuses, and those abuses deserve a public rebuke. Those
are abuses of commission — committing shareholder or other public or
private resources unwisely and to an ineffectual result.
But there are abuses of omission, too. It takes an incredible personal
toll in body and spirit to master the complexity of leading today’s
public corporations or private enterprises or nonprofit institutions.
That toll can go unrecognized in the crossfire over compensation.
Hopefully your board sees all and calculates all. That’s why you want
hardened executives on your board who know what the senior leader and
his or her team are doing and going through to earn their just reward.
If there are cruel headlines ahead for you as the world peeks into your
paycheck, just picture in your mind the suave Mr. Grant delivering his
wise counsel in his inimitable voice and manner.
If you are interested in the original citation of Cary Grant’s comp
coaching, it appeared in a piece I published in 1988. Email me a note
at jkristie@directorsandboards.com
and I’ll send you by return email the one-page PDF of the Directors & Boards article,
titled “Guiding Lights and Lessons.”
Our latest Boardroom Briefing on Executive and Director Compensation is in the mail to our subscribers; an online version can be found by clicking here.
Postscript: I have been known to quip that
the only person I am aware of who is still in his same job as when I
became editor of Directors
& Boards in 1981 is Fidel
Castro. Well, Castro has just announced that he is stepping down as
Cuba’s president, a post he has held since 1959. Now I either have to
retire my quip or come up with another long-seated candidate. Any
suggestions?
Jim
Kristie is the editor and
associate publisher of Directors
& Boards.
Are You Prepared to Release Hitherto
Undisclosed Information?Tax reserves, FIN 48, and corporate governance … and the potential for “soft spots” to be newly opened to the SEC and other regulatory bodies, institutional investors, stock analysts, and corporate gadflies.
By Stuart E. Seigel
Board members are paying more attention than ever before to the issue of tax reserves — attention that is now intensifying as public companies prepare their 2007 financial statements for publication and SEC filing with annual reports.
The reason is FIN 48, prescribed by the Financial Accounting Standards Board, which not only mandates new procedures for consistent application in determining the amount of tax reserves commencing in 2007, but also requires, for the first time, separate disclosure of such reserves in financial statements.
Complying with FIN 48 involves new risks and liabilities for the corporation, the board, and the audit committee. And the disclosure requirements of FIN 48 mean that these parties must be newly ready to explain and defend the resulting tax positions taken.
[Click
Here to Read
the Entire Article]
The Other Private Equity
Despite the credit crunch, growth equity spurs innovation, promotes economic growth, and builds strong public companies.
By William E. Ford
The record pace and volume of “going private” transactions over the past couple of years made private equity a household phrase — one most associated with leveraged buyouts (LBOs) of publicly traded companies. While the credit crunch has constricted the financing that made so many large transactions possible, it has not diminished the integral role private equity plays in supporting the growth, and thus the health, of the global economy.
Growth fuels innovation, creates jobs, and contributes to economic development, and there is an entire segment of the private capital market dedicated to just this purpose. It’s called growth equity.
On the private equity spectrum, growth equity occupies an important place between venture capital and LBOs.
Growth equity is distinct in its focus on working with promising companies to achieve business scale and market leadership. It provides a vital bridge of capital and expertise for privately owned firms transitioning from successful start-up to a publicly traded enterprise.
[Click Here to Read the Entire Article]
CEO
GDES
Editor's note: Each month, we ask a
Directors & Boards reader to comment on critical issues facing
directors today. If you'd like to participate in this section in
the future, please email Scott
Chase.
Off-shore outsourcing has been the focus of heated debate since its inception. What makes this a director-level concern?
Just as top line strategies evolve over time, so are strategies involving off-shore outsourcing. Companies should have a thorough understanding of current options available before entering into traditional outsource relationships.
Current state of the art relationships are designed to provide cost reduction benefits while minimizing the quality risks associated with loss of direct control over operations as well as providing the same flexibility for addressing changing business needs as in-house teams.
The board of directors should know what questions to ask management regarding outsource relationships, what risks to avoid, and what success factors to track.
[Click Here to Read the Entire Article]
Salient bullet points from new research by Glenn S. Curtis, director, strategic research for Thomson Financial, on activist shareholders in 2007:
• Throughout 2007 activists attempted to exert their influence at 61 public companies. That is, they either sought to make changes to the target’s board of directors, or to effectuate some other sort of value enhancing action or transaction.
• Between October and December 2007 (Q4) activists attempted to exert their influence at eight public companies. While it is impossible to definitively determine which party (the activist or the target) will prevail in each of these instances, there are two instances where it appears as though the activist will secure a victory.
• The most common demand made by activist firms was for board seats. This is consistent with two studies that we have completed in the past.
• The average target size in terms of market capitalization during Q4 was about $1.22 billion - well below the roughly $8.49 billion average for the first three quarters of 2007.
• Consumer Discretionary companies were the most frequent targets in the fourth quarter. This too is consistent with studies that we have completed in the past.
• Companies within the financial industry were not targeted in the fourth quarter. This is somewhat surprising given the large decline in equity prices in this group and given that many of these firms continue to maintain valuable and tangible assets on their balance sheets.
• While Carl Icahn and entities controlled by Icahn appeared to be the most active for all of 2007, Ramius Capital was a close second, recording three cases of activism in Q4 and five for the full year.
• Private equity firms and hedge funds remained the most common activists. Q4 did not see major mutual funds or individual investors lead any charges for corporate change as they did in the Q1 to Q3 time frame.
• Perhaps not surprisingly, cash-strapped construction companies and builders were targeted the least by activist shareholders throughout 2007. There was no change from the first three quarters of the year.
Click here for a pdf copy of the Executive Summary. To learn more about the report, contact Glenn Curtis, Director of Strategic Research, at glenn.curtis@thompson.com.
March 6,
2008
The Conference Board Directors' Institute will be held at the
Mid-America Club in Chicago. The program topics include how directors
are tackling the latest governance challenges, such as managing
compensation consultant relationships, dealing with hedge funds and
private equity funds, and handling risk management oversight. Visit
March
10-12, 2008
Columbia Business School Executive Education presents "Corporate
Directors' Responsibility: Enhancing the Integrity of Financial
Disclosure." Led by professors Nahum Melumad and Stephen Penman, the
three-day program focuses entirely on crucial financial disclosure
issues. Directors will deepen their expertise in analyzing financial
statements and in evaluating the appropriateness of financial reporting
and accounting decisions made by management. For more information, call
212-854-3395 or visit
March
13-14
The Boardroom Bound Boardology Institute presents their Pipeline
Seminar in St. Louis. Hosted by the John Cook School of Business at St.
Louis University. Register at
March
20-21, 2008
The Marshall School of Business at the University of Southern
California will conduct the Third Annual USC Corporate Governance
Summit. Noted faculty and top governance practitioners will provide
directors and senior business executives insights into leading best
practices in effective governance. Visit
March
26-29, 2008
Harvard Business School's Corporate Governance Series presents "Making
Corporate Boards More Effective," a program that concentrates on
cutting-edge techniques, strategies and action plans for improving
board design, maximizing individual contributions to company boards,
and improving corporate governance. Faculty chair is HBS Professor Jay
Lorsch, and the program will be held in La Jolla, Cal. For further
information, call 1-800-HBS-5577 or visit
March
30-April 3, 2008
The 2nd Annual Corporate Governance Congress will be held at the JW
Marriott Hotel in Dubai. The only established corporate governance
event in the region, the program will address such topics as developing
an innovative governance model tailored to your challenges and needs;
boosting public and minority shareholder confidence in your
organization; and encouraging transparency, sustainability and
disclosure through corporate ethics, CSR and SRI. John J. Ray III,
chairman and CEO of Enron, and strategic governance adviser and
Directors & Boards author Mark Sickles will be among the speakers.
For more information, visit
April
2-4, 2008
PricewaterhouseCoopers LLP and The John L. Weinberg Center for
Corporate Governance, University of Delaware, present Directors'
College 2008. The program will address dealing with activist
shareholders, exploring ways to prepare and position a company
successfully. Speakers include David Batchelder, director of Home
Depot; John Biggs, director of Boeing; Charles Elson, director of
HealthSouth and Autozone; and Richard Koppes, director of Apria
Healthcare Group and Valeant Pharmaceuticals International. For more
information, visit
April 16,
2008
The New York Stock Exchange and Corporate Board Member magazine host
the second annual "Mid-Cap Board Committee Peer Exchange." The
invitation-only event will be held in Washington, D.C., at the new
Gaylord National Resort & Convention Center. For information, call
615-309-3200.
May 5-7,
2008
The American Strategic Management Institute is hosting the Performance
Conference 2008. If you are an executive interested in performance,
finance, operations or HR, the Performance Conference has specific
tracks and workshops to help plan, measure and improve performance in
your organization. Visit
May 15-16
The Boardroom Bound Boardology Institute presents their Pipeline
Seminar in Chicago. Register at
May
20-23, 2008
WorldatWork, an association of human resource professionals from
Fortune 500 and other leading companies, will be holding its annual
conference in Philadelphia. Talent leaders will discuss and rethink the
ways organizations attract, motivate, and retain employees. Jonas
Ridderstrale, Ph.D., author of "Karaoke Capitalism: Management for
Mankind" and "Funky Business: Talent Makes Capital Dance," will deliver
the opening keynote. Now in its 53rd year, the WorldatWork Total
Rewards Conference is expected to draw more than 2,000 HR executives
and corporate leaders from 30 countries. Talent leaders from
organizations such as Accenture, Buck Consultants, Hay Group,
Microsoft, Motorola, and Towers Perrin will be speaking. For additional
information, visit
May
29-31, 2008
The International Policy Governance Association's 5th Annual Conference
will be held in Vail, Colo., at the Vail Marriott Mountain Resort and
Spa. Themed "Together at the Top: Building Peak Performance Boards,"
the event will bring together board members, CEOs, senior management
and board advisers and individuals at any level of Policy Governance
knowledge and experience for workships, plenary sessions and networking
opportunities with Policy Governance practitioners and experts from
around the world. For more information, visit
The 12th Annual Wharton Leadership Conference presents "Emerging Trends in the Search for Leadership." In this intensive one-day program, presenters draw upon their own and their organizations' experiences in finding, creating and retaining talent at all levels of the firm. Speakers will include Colleen Barrett, president of Southwest Airlines; S.A. Ibrahim, CEO of Radian Group; William Weldon, CEO of Johnson & Johnson; and Wharton's Peter Cappelli, Habir Singh, and Michael Useem. The program will be held at the Wharton School. Register at
Pictured (left to right) are Dr. George Tsetsekos, Dean of Drexel’s LeBow College of Business, in which the Governance Center is based, Robert Rock, and Dr. Ralph Walkling, the Center’s Executive Director.
“For over three decades the mission of Directors & Boards has stayed the same: to be the ‘thought leader’ in the evolving field of corporate governance,” said Bob Rock on receiving the award. “We have embraced the accountability to provide the knowledge that enables directors to govern their businesses effectively.”
The well-attended event, held at the Union League Club in Philadelphia, included an executive roundtable on “Leadership Lessons: Private vs. Public,” in which Bob Rock offered his inside-the-board perspective from having served on 15 public and private boards.
Director Resources
Executive Compensation: DolmatConnell & Partners Inc. has released its two latest studies: The 2007 Life Sciences 100 Study, and The 2007 Tech100 Study click here. These studies “provide exceptional insights into the evolving world of executive compensation in the 100 largest publicly traded life sciences and tech companies in the US,” according to the firm. To discuss any aspect of this study further, contact the firm at dcinfo@dolmatconnell.com. The firm has also just started a blog.
Steve Cross, President of Cogent Compensation Partners, announces the addition of Trisha Grisham, Principal; Eric Bethea, Consultant; Julie Davidson, Consultant; Chris Earnest, Consultant; and Kevin Schott, Sr. Analyst to the Houston office. These additions are in direct response to Cogent’s expanding client demands. “With the changing regulatory landscape including SEC proxy disclosure rules and IRS rules on deferred compensation, the demand for experienced executive compensation assistance has risen significantly. In addition, the market is increasingly demanding the services of a truly independent consultancy. With the addition of these high caliber consultants, we have significantly enhanced our ability to meet the demands of the market and better serve our existing clients,” explained Steve Cross. Cogent Compensation Partners is a wholly-owned subsidiary of National Insurance Partners, a Texas-based insurance and financial solutions firm. The firm specializes in board of director/trustee protection, directors’ and officers’ liability insurance, property and casualty insurance, risk management, executive compensation consulting, and executive and employee benefits.
Director Compensation: As this e-Briefing went to press, the National Association of Corporate Directors was close to releasing its 2008 Director Compensation Report. The study was conducted this year with Pearl Meyer & Partners. For information on the report, visit the NACD website at http://www.nacdonline.org.
Internal Audit and Risk: Click here for a pdf copy of a new KPMG whitepaper titled “Internal Audit of the Future: Financial Institutions Look Ahead.” This whitepaper is based on insights that came out of a Global Internal Audit Share Forum hosted by KPMG in late 2007, which brought together nine internal audit directors from leading financial institutions including Barclays, BMO Financial, Goldman Sachs, Credit Suisse, Bank of Nova Scotia, Morgan Stanley, Lloyds TSB, and RBS.
The paper, according to the firm, is “very timely, as the current credit crisis has illustrated the need for financial institutions to have an integrated and appropriately managed system for monitoring risk.”
Corporate Social Responsibility: The world's first stand-alone printed corporate social responsibility directory is now available at
http://www.ethicalperformance.com/directory/ordercopy.php. The CSR Professional Services Directory 2008 lists 604 organizations worldwide under 56 different service categories, from consultants to academic institutions, rating agencies to ethical auditors, and training providers to research bodies. The directory, now in its third year, is published by Ethical Performance, the independent newsletter for socially responsible business.
Fairness Opinions: Deloitte Financial Advisory Services LLP has expanded its services to include the issuance of fairness opinions. “The accelerated rate, complexity and global nature of today’s deals require professional service firms with deep industry knowledge, a broad experience base, and the ability to access global resources,” said Chris Ruggeri, national leader for Deloitte FAS. “We have the ability to access consulting, tax, and audit professionals worldwide — not many financial advisors can leverage such a vast array of skills.”
Author Notes
Lewis B. Campbell, chairman, president and CEO of Textron Inc., has been named lead independent director of the Bristol-Myers Squibb Co. board. Campbell authored the cover story article, “Retooling for Renewal at Textron,” in the First Quarter 2007 edition of Directors & Boards.
The board of directors of Deloitte LLP has elected Stephen C. Van Arsdell, a senior client service partner and a member of the board since 2003, as vice chairman. Van Arsdell will serve as the chairman of the governance committee and will provide leadership to the board's advisory council. "Steve’s depth of experience and leadership bring an important dimension to our boardroom," noted Sharon L. Allen, chairman of the board. Van Arsdell also serves as chairman of the board's finance and audit committee and previously chaired the board’s risk committee.
FTI Consulting Inc., the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, has acquired Thompson Market Services Limited (TMS), a full-range intellectual property and brand protection service firm. TMS is headquartered in Hong Kong.
Willis Group Holdings, the global insurance broker, has appointed Vic Krauze as Willis North America’s chief operating officer. “Vic has demonstrated exceptional ability in leading Willis North America’s Central Region,” said Don Bailey, CEO of Willis North America, adding that Krauze “will continue to drive our efficient operating platform to support growth in 2008.”
Patricia Q. Connolly has been named managing director of the Drexel University Center for Corporate Governance (see news item above). Connolly was a former senior vice president of the Academy of Natural Sciences in Philadelphia and, previously, group vice president of PNC Bank. She has a strong background in executive leadership and fundraising experience with nonprofits and has served on advisory boards of many local nonprofit organizations and on the board of PNC Bank’s Women’s Financial Services Network. She holds a bachelor’s degree from Bryn Mawr College and a master’s degree from the University of Pennsylvania as well as several business certificates.
Back to the Top
Directors & Boards e-Briefing is a monthly service of Directors & Boards. All contents copyright 2008, MLR Holdings LLC.