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June 21, 2022

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Now is a good time to revisit risk assumptions with management.

June 21, 2022

Anticipating emerging risks means reshaping the board. 

DIRECTORS ROSTER

Boise Cascade Co.
Boise Cascade Co.
Allison Transmission Holdings Inc.

FEATURED DIRECTOR

Board vetting in the digital age

When we first wrote an article for Directors & Boards back in 1996, we shared some tips for vetting board candidates: what to look out for, what types of resources to check, and other guidance. If you strip away the charmingly archaic references (such as “desktop computer equipped with a modem”), we made some fundamental research points that hold true today: What is the candidate’s hometown reputation? Is his or her background as described? Has the candidate ever been sued? As we always say, trust but verify.     


Peter Lagomarsino (left) and James Rowe are partners with The Mintz Group, a company that provides research and investigative services to boards, corporate counsel and their advisors (www.mintzgroup.com). Lagomarsino manages the firm’s San Francisco and Los Angeles offices. Rowe is executive vice president of the firm and manages the Washington, D.C., office. The authors can be contacted at plago@mintzgroup.com and jrowe@mintzgroup.com.

The challenges in 'refreshing' 'board committees

 


Robert B. Lamm is Of Counsel to Gunster, Yoakley & Stewart, P.A., a Florida law firm for business, where he co-chairs the Securities and Corporate Governance practice (www.gunster.com). He also serves as advisory director to Argyle, which advises clients on the effective communication of corporate governance, and as a senior advisor to Deloitte’s governance practice. He previously served in the corporate secretarial functions of a number of corporations, including Pfizer Inc. and W. R. Grace & Co. The author can be contacted at rlamm@gunster.com.

Antidotes to a board's going stale

 

What is great governance? Experience and research point to a top-10 list of things a board must do for management and the organization to thrive:

1. Set high performance aspirations and a proper tone at the top.

2. Appoint an excellent leader and plan for succession.

3. Help develop and approve a winning strategy.

4. Approve annual and long-range plans and monitor results.

5. Create incentives for desired performance.

6. Ensure quality financial reporting and effective internal controls.


B. Joseph White  is a board member of an S&P 500 company, Equity Residential, a director of one of America’s largest private companies, Gordon Food Service, an experienced nonprofit board member and chairman, and a distinguished academic leader with the University of Illinois, where he is the James F. Towey Professor of Business and Leadership and president emeritus, and the University of Michigan, where he holds the position of dean and professor emeritus at the Ross School of Business. He is the author of Boards That Excel: Candid Insights and Practical Advice for Directors, copyright ©2014 by the author, published in August 2014 by Berrett-Koehler Publishers Inc. (www.bkconnection.com). This excerpt is printed with permission of the publisher. All rights reserved. The author can be contacted at bjwhite@illinois.edu.

The Directors & Boards Survey: CEO and Director Compensation 2014

 

In this year’s survey, we asked respondents to reflect on changes they’d like to see in director compensation. The responses fell into two areas: greater equity for the board, and differential compensation for not only greater board responsibility but also greater engagement in board activities. This latter area is, we think, an interesting way for a board to tie results of self-evaluations into something meaningful. 

The pay ratio rule: Get ready, get going

 


Charles M. Elson (at left) is the Edgar S. Woolard Jr. Chair in Corporate Governance and director of the John L. Weinberg Center for Corporate Governance, University of Delaware (http://www.lerner.udel.edu/centers/weinberg). Craig K. Ferrere served as the Edgar S. Woolard Jr. Fellow in Corporate Governance at the Weinberg Center from 2010-2014. The authors can be contacted at elson@udel.edu and cferrere@jd17.law.harvard.edu.

Joining a bank board? Get radically objective

 


Mike Kipp was an organizer and director of American Home Bank, chairman of Atlas Bank, and a board member of several other enterprises. He can be contacted at mike@kippassoc.com.

Accept a bank board seat? A verdict from the litigators

 


Dennis Klein is a partner with the law firm Hughes Hubbard whose practice focuses on complex commercial litigation, including officer and director liability lawsuits and bank insolvency problems. Derick Sohn and Tyler Grove are associates with the firm in its litigation department. The authors wish to thank Eleanor Erney and Iain Barr for their help in researching this article. The authors can be contacted at klein@hugheshubbard.com, sohn@hugheshubbard.com, and grove@hugheshubbard.com.

Invited to join a bank board?

 

In many respects the banking industry has become the favorite ‘piñata’ of politicians, the media and the public; everyone feels entitled to take a swipe. The recent financial crisis seriously damaged the image of the entire banking industry, including the reputations of both bankers and bank directors.  


Charles J. Thayer  is chairman and managing partner of Chartwell Capital Ltd., a private investment firm that provides specialized advisory services on a wide range of financial and governance issues to the boards of directors and executive management of banks, corporations and institutional investors (www.chartwellcapital.com). He organized Chartwell Capital in 1990 following a 20-year career in the banking industry. He is a bank director and currently serves as chairman emeritus of the American Association of Bank Directors. He is the author of It Is What It Is (2010), a book describing how the board, management team and employees of AmericanWest Bank successfully navigated their way through the financial crisis of 2008. He can be contacted at cjt@chartwellcapital.com.

Negative votes have consequences

 

Is shareholder voting on the election of board members effective, or is it, to quote New York Times reporter James Stewart, “an electoral system unworthy of Soviet-era sham democracies”? Asked another way, do dissenting votes by shareholders have any consequences for directors nominated for elections?


Dr. Reena Aggarwal is the Robert E. McDonough Professor of Business Administration and Professor of Finance at Georgetown University’s McDonough School of Business. The author also is the director of the Georgetown Center for Financial Markets and Policy. She can be contacted at aggarwal@georgetown.edu.

Factor tone and culture 'into the equation

 

With the SEC’s stepped-up enforcement regarding corporate accounting and financial reporting, many audit committees are sharpening their focus on the quality of the company’s financial reporting and disclosures. Essential to this, of course, is having robust discussions with management and auditors about the numbers and the narrative — critical accounting policies, judgments, and estimates, disclosures (including non-GAAP information), internal controls, key transactions, particular areas of SEC staff focus, and more.


Howard Scheck, a KPMG partner, leads the SEC regulatory enforcement and compliance efforts of KPMG’s Forensic Advisory Practice. The author is a former Chief Accountant in the SEC’s Division of Enforcement. He can be contacted at auditcommittee@kpmg.com.