March/April 2010
-- Vol. XXXI No. 181
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EARNINGS GUIDANCE AND
THE BOARD OF DIRECTORS
by Robert J. Kueppers
Do your policies help fuel the drive toward
short-term results? |
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Narrow focus on short-term corporate earnings can lead to long-term harm, both
to a company and our economy. Corporations claim that analysts and investors
are the drivers for an obsession with short-term earnings guidance, but a new
study casts doubt on this connection. Robert Kueppers, Deputy CEO of Deloitte
LLP, examines why this research should prompt boards to rethink how they
communicate financial results. |
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SEC INCREASES THE
FOCUS ON BOARD PRACTICES
by Michael R. Littenberg
The new rules on pay and risk disclosure have
already hit. |
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Proxy season 2010 brings a new wave of required SEC disclosure rules focused
directly on the board and its oversight role. New compensation disclosures go
beyond how your board sets top pay to examine overall pay policies—and their
potential risks. The board also must disclose more on its leadership, the
qualifications sought in members, and how it addresses boardroom diversity. |
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CASH FLOW MONITORING
AS A GOVERNANCE TOOL
by H. Stephen Grace, Jr. and John E. Haupert
Strong cash flow oversight helps the board put
first things first. |
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Revenues, market share, P/E ratios—all may look solid under board review, but
the company can still collapse tomorrow without adequate cash. Given the
present economy, wise boards should worry first about cash flow as an immediate
measure of corporate health. The tools for analyzing cash flow can also give
the board important clues about where the company is headed in the future. |
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COMPENSATION CONSULTANTS
AND YOUR BOARD
by Melissa L. Burek
Who hired your consultants and who pays
them are just a few new disclosures. |
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Compensation committees face a new era of disclosure and independence in their
work with outside pay consultants. Investors will soon know how much your
consultant is paid and whether they were hired by you or management. Now is the
moment when your committee should re-examine its relationship with outside
consultants, not only to assure that it will meet the new rules, but that it
also provides the best pay advice. |
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PROTECTING DIRECTOR ASSETS
IN TROUBLED TIMES
by Sheon Karol and David Finz
Why director liability coverage needs to
outlive the company itself. |
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Two years of economic turmoil have led some companies to extreme survival
measures, including bankruptcy, mergers and major restructurings. Hard times
not only endanger companies, but their directors and officers as well.
Liability threats increase, often at the same moment a major corporate change
puts board members’ insurance coverage in peril. What can directors do to
protect themselves while protecting the company? |
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CONVERSATIONS:
MICHAEL R. LEVIN
Investor activism for the rest of us. |
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Despite a growing body of laws and regulations that give investors more power
over management and boards, the big names in proxy battles today are largely
the same as a decade ago. Yet these institutions and activists are only a
fraction of these who remain passive investors. Michael Levin intends to change
that. Levin’s consulting career includes leadership positions at Towers Perrin
and Deloitte, and finance positions at CNH and Nicor. He has launched The
Activist Investor (www.theactivistinvestor.com) as both a strategic and
investtor activism tool. Through The Activist Investor, Levin will offer
education, consulting, and strategic counseling to "the silent
majority" of investors who may lack the tools or knowledge to make a
governance impact. |
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IN REVIEW Index to
actions, regulations and surveys.
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SPOKEN & WRITTEN
Excerpts of articles and speeches.
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DIRECTORS' REGISTER
Recent board elections.
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