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Tag >> corporate governance
So how exactly should boards go about the business of risk management?
The answer: methodically and carefully, with a defined framework for structuring their activities, always informed by the need to align risk assessment to strategy.
A group of so-called socially conscious investment firms fired off a letter to 35 major companies urging them to re-evaluate whether it makes sense to remain serving on the Board of the US Chamber of Commerce.
The 44 investors argue there is a major difference between the individual companies' policies on certain matters and Chamber policy objectives.
It's all about pay.
When shareholders gather at this year's annual meetings, executive compensation figures to be the number one issue on the proxy. This is partly because the Dodd-Frank Act requires all companies whose annual meetings take place after January 21, 2011 to hold so-called Say on Pay votes on their Compensation Discussion and Analysis (CD&A)-an advisory non-binding up-or-down vote. They also will be required to vote on whether the company should hold future votes annually, bi-annually or tri-annually.
A recent piece of research by academics Nils Backhaus and Luc Soenen looking at how to determine if a company is holding excess cash and what the impact is of that, which appears here on AFPOnline, made a very good case for some of the potential pitfalls that companies face when retaining extra cash.
Given the tremendous focus by much of the US business sector on stockpiling cash in recent years, understanding not just the benefits, but also the issues that could arise as a result, is an important exercise that should help finance execs to ensure that cash is put to best use.
Tuesday's election was, of course, the first since the Supreme Court ruling in the Citizens United case, which allowed corporations, as well as as union and other groups, to spend however much they want on political campaigns. And sure enough, during this election, the faucet opened wide and millions of dollars were spent on political ads.
But for companies, the big question is, what does this activity mean for business? And there's some indication the answer isn't as positive as you'd think.
Companies are focused on compliance with new proxy disclosure rules, but they may not be providing the whole picture of the company’s risk management strategy, according to a new report out by corporate advisory firm Deloitte.
In analyzing proxy statements by 398 S&P 500 companies, Deloitte found that although companies were meeting basic compliance requirements for risk oversight, they fell short of providing vital information on risk management practices—information which could provide greater comfort to regulators, investors and other stakeholders into risk mitigation efforts at the company.
The Dodd-Frank Act may have gone a little further on some issues than many people had anticipated. But one potential issue that did not see meaningful change is the separation of the chairman and CEO functions.
The Act requires that the SEC issue rules requiring each public company disclose in its annual proxy materials the reasons why the company chose to have either the same person, or separate people, serve as the Chairman and CEO.
The $44 billion global microfinance industry got a boost recently as private equity investor BlueOrchard attracted $195 million to a new fund aimed at helping microfinance lenders modernize their organizations, improve governance and risk management, and develop into fully-fledged financial institutions.
The knock-on effect is that as the industry as a whole becomes more standardized, with stronger, regulated and rated institutions, this should attract more investment and help turn microfinance into a recognized asset class, which in turn is good news for small businesses both in the US and globally that benefit from microfinance lending.
This proxy season is shaping up as one of shareholder revolt, as more and more directors fail to receive the support of a majority of owners.
While the Corporate Library, a corporate governance research firm, is still collecting data, early indications suggest that many more directors will fail to win support from less a majority of their shareholders than in previous years.
Shareholders recently voiced fresh dissatisfaction with director R. Bruce LaBoon, who is also "of counsel" at Locke Lord Bissell & Liddell, a law firm that provides services to the company.
In its proxy statement, the company cliams that the "attorney fee arrangement with Locke Lord is negotiated on the same basis as arrangements with other outside counsel and is subject to the same terms and conditions."
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