• Year in Review II.
    By James Kristie
    W e l c o m e to t h e s e con d a n n u a l “ G o v e r n a n c e Year in Review” special e d i t i o n o f Di r e c to r s & Boards. We added this fifth issue in our quarterly publication schedule to deliver even greater value to our read- ers. We present to you an archival record of the who, ...
  • The Aspen Principles: A better way forward.
    By Judith Samuelson
    Shareholder Value  directors & boards I f we have any doubt about the prevalence — and cost — of “short-termism” in U.S. capital markets, the cur- rent economic fallout ought to offer useful data. The subprime crisis, when the final losses are tallied, is being projected by some at $500 billion...
  • Next steps? Be careful what you wish for.
    By Peter C. Clapman
    Shareholder right S  directors & boards I n 2004, as head of the corporate governance program at TIAA-CREF, I wrote in its Policy Statement on Corpo- rate Governance the following: “Good corporate gover- nance should maintain the appropriate balance between the rights of shareholders — the owne...
  • What the proxies tally: A rising tide of activism.
    By James Melican
    Proxy rePort  directors & boards T he 2007 and 2008 proxy seasons have been char- acterized by a rising tide of shareholder activism, spurred on both by a concerted effort to require boards to dialogue with shareholders on execu- tive compensation issues and by the increasing willingness of hed...
  • 'Say on pay' is not a 'slippery slope'
    By John C. Wilcox
    ExEcutiv E c omp Ensation 10 directors & boards S hould shareholders have the right to an advi- sory vote on executive compensation? What would be the consequences? These questions have become the defining issue of the 2008 proxy season in the U.S. The predominant tone of the public discourse ov...
  • SEC Report Card 2007.
    By Ralph Ferrara
    12 directors & boards L ast year we graded the SEC’s performance in 2006, and came out with a harsh critique. This year, we are more optimistic, although it is a cautious optimism. We note two trends driving the SEC. The first is its continued move to clarify and simplify Sarbanes-Oxley — a law ...
  • Mission of the CAQ: Enhance audit quality.
    By Cindy Fornelli
    Financial Oversight 14 directors & boards P rotecting the integrity of the capital markets is critical to our nation’s economic well-being. Public company auditors have a central role in that effort, and the profession has taken its responsibilities to heart, in part through the creation of the ...
  • Corporate Governance Litigation: 2007 Review.
    By John L. Reed
    LiabiLity and Litigation 16 directors & boards T he harsh consequences of being a faithless fidu- ciary were evident in 2007, when increased efforts by the Securities and Exchange Commission and U.S. Attorneys’ Offices resulted in a wave of indictments, convictions, and guilty pleas. In May 2007...
  • A tale of two fairness opinions.
    By Donald G. Kempf Jr.
    Mergers and acquisitions 18 directors & boards W hen it comes to fairness opinions pro- vided to corporate board members in connec- tion with major corporate transactions, new FINRA Rule 2290 will undoubtedly usher in a new paradigm. The new rule, which went into effect just this past December, ...
  • On the front lines of executive pay.
    By Jack Dolmat-Connell
    ExEcutiv E c omp Ensation 20 directors & boards L ast year brought some remarkable stories to the executive compensation forefront — from huge CEO severance payouts to equally huge paybacks and to shareholder activism through “say on pay.” Here are our selected highlights of the top comp stories...
  • Stakeholder face-off in the Facebook age.
    By James Farrar
    22 directors & boards I n today’s sustainability-conscious world, commu- nication needs of stakeholders have expanded beyond traditional reporting to include regular updates on cor- porate sustainability performance. Most companies ad- dress these expectations by summarizing their sustainability...
  • D&O insurance: A pressure check.
    By Evan Rosenberg
    annual report 2008 23 I f you, as a board director, had been stranded on a desert island for the past year, and you were rescued today, you might not recognize the financial world to which you returned. For one thing, your chances of being hit with a directors and officers (D&O) liability lawsui...
  • The Year in Governance.
    By James Kristie
    Year in review 2007 24 directors & boards JanuarY S tarting off the year with a bang, Home Depot Chairman and CEO Rober t Nardelli an- nounced his resignation on Jan. 3. He never quite recovered from a fiasco of a shareholder meeting in 2006, and was continually under fire for his man- agement p...
  • Hiding in plain sight.
    By Thames Fulton
    Heidrick & StruggleS g overnance letter annual report 2008 33 I t’s too soon to say that the CEO- director is a vanishing breed but ... a revolution in slow motion is certainly under way when we look around the boardroom. At companies large and small, many CEO-directors are nearing retirement or...
  • Onboarding: Protect your investment.
    By Thames Fulton
    Heidrick & StruggleS g overnance letter annual report 2008 35 tives? Will they fit within the boardroom culture? There are many other questions of fit as well, but for non-CEO candi- dates who are possibly earlier in their careers the first question is all about readiness. In assessing next-gene...
  • On the social responsibility front.
    By Scott Fenn
    Proxy rePort 50 directors & boards or more suspect, will feel constrained to follow suit. The proponents insist that they are not trying to microman- age board compensation policies; rather, they are attempting to encourage dialogue between the board’s compensation com- mittee and shareholder re...
  • Hoffer Kaback
    H offer Kaback cele- brated his 10th year as lead columnist for Directors & Boards in 2007. That’s an im- pressive run. Columnists are sus- ceptible to high burnout. Writer Nora Ephron said it best: “Being a columnist is like being mar- ried to a nymphomaniac: Every time you think you’re through...
  • 'MVP'
    Issue: 2008 Fourth Quarter
    By Robert H. Rock
    W ith the 2008 baseball season w rapping up, spor ts w r iters will select “the most valuable player” in each league. In the National League, the past two MVPs have come from my home team, the Philadelphia Phillies. This year the Phils may have a third st r aig ht w inner, as suggested by chants of ...
  • Some of all fears
    Issue: 2008 Fourth Quarter
    A great editor is motivated entirely by fear.” That was a comment made by Esquire Editor David Granger during a round of promotion interviews for the magazine’s 75th anniversary issue published in September 2008. He was re- ferring specifically to the passing earlier this year of the great Clay Felk...
  • Hail to the Chief
    Issue: 2008 Fourth Quarter
    By Hoffer Kaback
    T he new President of the Unit- ed States strides into the room for a February 2009 news con- ference and indicates that he is ready for questions. MSNBC (Chris Matthews): As my old boss Tip O’Neill used to say, all poli- tics is local. However, should regula- tion of corporate boards continue to be...