Directors & Boards

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The new normal.(LETTER FROM THE CHAIRMAN)
WHEN JIM KRISTIE asked me to write a piece on "The New Normal" in board practice, my first thought was that not much had changed in the past year. Boards continue to be accountable for making certai . . .

The great ... what?(EDITOR'S NOTE)
IN 2008 CORPORATE GOVERNANCE ran smack into the Great Recession, and the resulting mashup wasn't pretty. Welcome to the third of our annual Governance Year in Review special issues. Publisher Robe . . .

The year in governance: a month-by-month recap of the people, organizations, events, actions and reactions that defined hoard ov
JANUARY The year starts off with a "CEO firerama," as CNBC commentator lames Cramer calls it. Among those losing their positions: CEOs of Starbucks, Krispy Kreme, Bear Stearns, and Sears. The U. . . .

Next steps for the SEC: the path it should take to restore its original mission and regain investor confidence.(REGULATORY OVERS
FOR THE PAST TWO YEARS we have issued a report card that evaluated the Securities and Exchange Commission's record for the previous year. Our negative marks and remarks may have raised some eyebrows . . .

The many sides of M&A: yes, there are financial, legal, strategic, and tactical dimensions to getting a deal done--but never for
I'll never forget the story told by a big-name director who was keynoting an M&A conference back in the 1980s, when the merger boom was running rampant. That director will go unnamed, as you'll soon . . .

Keynote: thoughts on M&A in the current environment: to increase the likelihood that a deal can be completed, a company needs to
Recessions slow the pace of M&A activity due to a divergence of seller and buyer valuation expectations and a difficult financing environment. Recessions are a natural part of economic cycles. They . . .

The role of directors in acquisitions: directors should do more than is minimally required under the business judgment rule.
Directors are often requested to approve significant acquisition proposals, which typically are accompanied by rosy management projections which more than justify the purchase price. Directors shoul . . .

Transactions with distressed companies: key questions for directors.
As banks and other traditional sources of capital find their balance sheets reflecting more and more under-performing assets, lending standards continue to tighten, leading to the well-publicized la . . .

The duties of private equity directors of distressed companies: avoiding an intrinsic fairness review.
When times are good, the goal of private equity professionals serving as directors of portfolio companies is relatively straightforward-maximization of value for the corporation's shareholders. More . . .

The Directors & Boards survey: mergers & acquisitions 2009.
Methodology This Directors & Boards survey was conducted in June 2009 via the web, with an email invitation to participate. The invitation was emailed to the recipients of Directors & Boards' mont . . .

Strategic acquisitions: prepare to buy: a key component of an effective corporate development strategy is strategic acquisitions
Corporate boards must not lose sight of one of their primary responsibilities--to focus management on strategy development and long-term business performance. This is especially true in today's mark . . .

What's in store for the M&A market in 2009? Deals are down, multiples have hit bottom ... but credit is still tight.(merger and
Last year in these pages I noted that M&A activity was dropping and credit was tightening. Hopefully we have hit the bottom, although that doesn't mean a return to historic levels anytime soon. It t . . .

An M&A executive compensation checklist: steps to ensuring a successful transaction.
Executive compensation is a powerful tool for motivating a company's management team to grow the value of the corporation and accomplish its strategic objectives. Executive compensation can also be . . .

Tale of the proxies: a turning point: prompted by a newly aggressive government and anger-fueled activist investors, the board-s
THE SEVERITY and rapidly developing nature of last fall's financial crisis seemingly overwhelmed any serious focus on corporate governance as more immediate issues took center stage. In the spring o . . .

How boards fared in the courts: 10 top cases of 2008: a review of the rulings leads to the finding that independent directors, d
CSX Corp. v. Children's Inv. Fund Mgmt. (UK) LLP Message to activist shareholders: accumulate with great care BY COLIN DIAMOND CSX CORP. SUED The Children's Investment Fund (TCI), a hedge fund . . .

Who's on board 2008: Directors Roster annual review of newly elected board members.(DIRECTORS St BOARDS' DIRECTORS ROSTER)
THE DIRECTORS & BOARDS Directors Roster is a quarterly record of new director appointments. It is compiled from public and private sources by the editorial staff of DIRECTORS & BOARDS and is sponsor . . .

Directors to watch 2009: as one of the accomplished members of our class of 2009 states, 'building a strong base of corporate go
WITH A NOD TO a once-popular song, what a difference a year makes. When it comes to emerging female and minority directors reaching the boardrooms of North American publicly traded companies, 2009 a . . .

2008 article index: the hot issues and agenda items that Directors & Boards authors tackled last year.
Annual Meetings Face the Music (and the Shareholders)--Annual shareholder meetings may not be so "Soviet" in their routine this season. By DIRECTORS & BOARDS Chairman Robert Rock. Second Quarter 2 . . .

Advice and consent: the biggest danger is that the governance model transforms too radically and directors become a threat to, r
THE WAVES of accounting scandals, company meltdowns, and related fiascos have destroyed billions of dollars in shareholder wealth. The ongoing crisis has raised the question of what value, if any, d . . .

Paradigm lost.(Column)
As A HARVARD UNDERGRADUATE I majored in what at the time was a new concentration, "History and Science," which had an overarching field of study, the history of science. In the late 1960s the semina . . .

An awesome stat.(EDITOR'S NOTE)
WHAT A PLEASURE it is to report this record-breaking statistic: The number of women named to corporate boards in the first quarter of 2009 reached 38% of all new appointments tracked in the DIRECTOR . . .

The full monty: following the logic of full disclosure, everything you might need to know about a CEO.(QUIDDITIES)
RECENT FOCUS upon the level of disclosure by Apple regarding CEO Steve Jobs' health suggests consideration of the larger issue: What should be the scope of disclosure about highly personal informati . . .

Pass the tums, please: a brush with backdated options shows how precarious board service can be.(SUTTON'S LAWS)
A PANEL OF SEC LAWYERS would like to have you appear before them," our corporate counsel-told me. "Gee, that sounds fun," I replied. "What for?" "They've read the report on backdated options, an . . .

Repricing challenges: directors need to weigh many competing considerations.(LEGAL BRIEF)
BOARDS FACE NEW and difficult challenges in their oversight of executive compensation. Rising sentiment against what many see as overpaid and underperforming executives has focused additional attent . . .

The best time to review D&O coverage? Now: in these especially challenging times, take these steps to ensure you have the protec
TODAY'S credit crisis has boards on high alert. What organization today is not feeling the pinch of tight credit and a dismal economy? The fact is that most economic signs point to continuing pres . . .

Natural partners in a necessary partnership: with new legislation looming, the arm-in-arm relationship of academic research and
MOST OF us begin our training in business with a textbook. But textbooks are out of date by the time they are written. Our lives, our careers and our experiences evolve. The needs and concerns of ou . . .

M&A thought process in turbulent times: the board's advice and consent on deal making over the next 12 months should be finely t
THE GLOBAL ECONOMY is experiencing unprecedented turbulence. The advice and consent of directors has rarely been as simultaneously important across all industries and all sizes of companies. It is l . . .

Rick goings: 'we've got an incredible board: The Tupperware Brands CEO champions the value that directors can add ... as long as
TUPPERWARE BRANDS CORP. Chairman and CEO Rick Goings keeps a card in his wallet that reads, "Life's journey is not to arrive at the grave safely in a well-preserved body, but rather to skid in sidew . . .

Boards: build back, and build better: a director's obligation is to take the long look ahead and invest for the future to ensure
I KNOW, FIRST HAND, that we are experiencing the worst economic conditions that we have seen since I began at Intel almost 35 years ago. Like every company, Intel is taking steps to manage our way t . . .

A director's 5 rules for difficult times: courage and confidence come from more than just keeping a close eye on cash flow.(DUTI
JUST RECENTLY, one of my best friends was offered a board position for a public company in a troubled industry. She asked me what she should learn and do as a board member during this economic downt . . .

Independent? Yes ... no ... maybe ... maybe not! The NYSE director independence rules come to conclusions that other reasonable
UNDER THE RULES of the Securities and Exchange Commission, companies are required to disclose in their annual proxy statements whether their board members are "independent," and whether their direct . . .

No parsley permitted: in compensation and succession oversight, the times require rising to a new level of everyday performance
Irving S. Olds, chairman of U.S. Steel from 1940-1952, once opened a speech by declaring, "Directors are like the parsley on fish--decorative but useless." Why do I resurrect such an appalling sta . . .

Opening keynote: rethinking Pay for performance: what have we learned about pay for performance in the current financial crisis
Our approach to executive compensation needs significant overhaul. At a time when several major financial institutions and industrial companies are on life support, shareholders have every right to . . .

Underwater stock options: timeless Issue for Tough Times; the continuing stock market meltdown poses a difficult question that m
Many of the issues companies face with regard to underwater options are timeless. On one hand, boards may feel they must take action to: * Restore the options' ability to provide a meaningful perf . . .

The case for an executive compensation standards board: if private industry does not act quickly to self regulate executive pay
Contrary to popular perceptions, boards of American companies have made great strides in ensuring their independence from the CEO and management. Nominating, audit and compensation committees are co . . .

The directors & boards survey: CEO and executive compensation 2009.
Co-sponsored and analyzed by Farient Advisors LLC The 2009 Directors & Boards 2009 CEO and Executive Compensation Issues and Governance Survey, co-sponsored by Farient Advisors LLC and Directors & . . .

New deferred compensation statutes: will it ever end? Private equity fund sponsors need to watch out for section 457A, a new rul
Hidden in the October 2008 bail-out bill was a new draconian rule that applies to traditional deferred compensation arrangements of partnerships and foreign corporations, and some performance and ma . . .

Board succession planning: maintaining board strength: most boards work harder than ever on identifying a successor for the CEO
With the demand for skilled, independent directors higher than ever and supply shrinking, boards will increasingly need to engage in the kind of farseeing approach to board succession that they have . . .

Closing keynote: where were the boards? Directors were busy serving their board to the best of their abilities--but did they get
In a recent article in The Wall Street Journal entitled "Where Were the Boards?," Bill George concludes that in response to the recent round of financial failures by the likes of Lehman, AIG, Bear S . . .

Does your board need a risk committee? The benefits can be compelling, but creating a board-level risk committee can itself be r
IN THE CURRENT economic and political environment, "risk management" is a concept commanding the attention of executives, boards, and regulators alike. Corporations of all sizes are increasingly foc . . .

Boards as overseers of human capital; Directors don't get enough of the right data, nor are enough experts sitting on the board.
ONE OF THE MOST important assets, if not the most important asset, of corporations is their human capital. CEOs and board chairs recognize this and frequently make such statements as "People are our . . .

A high-performance team: identify, please: we asked three in-the-know executives what they would advise directors to look for in
HOW CAN A BOARD of directors tell whether or not the top-management team is a high-performance one? "Financial results" is the short answer that most directors would likely give, and while few could . . .

Book it: best bets for board reading; From a roundup of new books, leadership insights on succession planning, finding a big ide
Rupert Murdoch's 'insatiable' desire. From Inside Rupert's Brain by Paul R. La Monica. Copyright 2009 by the author. Published by Portfolio, a member of Penguin Group (U.S.A.) Inc (www.penguin.com . . .

Directors roster: a quarterly record of new director appointments.(DIRECTORS & BOARDS' DIRECTORS ROSTER)
THE DIRECTORS & BOARDS Directors Roster--a quarterly record of new director appointments--is compiled from public and private sources by the editorial staff of DIRECTORS & BOARDS and is sponsored by . . .

Company index.
Ameren Corp. American Electric Power Co. Inc. AmeriGas Propane Inc. Assurant Inc. Bare Escentuals Inc. Blue Coat Systems Inc. Brush Engineered Materials Inc. Build-A-Bear Workshop Inc. . . .

Director index.
Kaj Ahlmann, RLI Corp. Jose Alvarez, United Rentals Inc. Kerrii Anderson, Chiquita Brands Anne Arvia, GATX Corp. Teri Balog, SBLI USA Mutual Life Y. Belton, U.S. Bancorp Ellen Brothers, . . .

'Where was the board?' Where was I? I had occasion to ask that when we board members put a company through chapter 11.(ENDNOTE)
FORMER DIRECTORS of Bear Stearns Companies Inc. won a rare early litigation victory in December, a summary judgment motion exonerating them from liability for their hasty decision to sell Bear Stear . . .

Job one is jobs won.(LETTER FROM THE CHAIRMAN)
WHILE NO CEO enjoys wielding the ax, many are getting good at it. Last year 2.5 million Americans lost their jobs, and this year a few million more will. On the precipice of a '30s-like Depression, . . .

A new era of responsibility.(EDITOR'S NOTE)
I'M WRITING THIS on the day after the inauguration of Barack Obama as the nation's new President. If the title of this column looks familiar, I'm unabashedly borrowing a main theme of the President' . . .

Ecclesiastes on deals: from generation to generation: buyer's remorse.(QUIDDITIES)
MY COLUMN "The Strange Nature of 'Fiduciary Outs' " (Fall 1999) analyzed some of the marked asymmetries of mergers and acquisitions contract law. True, it is basic that directors cannot contract awa . . .