Posts Tagged 'The New York Times'

The Boardroom Strikes Back

by Steven Davidoff Solomon for The New York Times

This year’s proxy season is turning out to be more hostile than ever, as companies fight back against hedge fund activists.

Companies typically have their annual meetings in the late spring, like the blooming of tulips, and they attract hordes of shareholder activists looking for profits. The activists will often try to elect directors, making proxy season not a reminder of the warming spring but a clarion call for the barbarians at the gate.

Last year, the activists won a series of stunning victories at Darden Restaurants, Sotheby’s and the real estate investment trust now known as Equity Commonwealth, among others. In each case, the companies refused to bow to the activist agenda, preferring instead to try to prevent the activists from electing directors. Each company lost after spending millions of dollars, wasting both money and their boards’ reputations.

The losses actually came as no surprise. In 2014, activists had a 73 percent success rate in electing directors, according to FactSet’s corporate governance database, SharkRepellent. Given the odds, many, including me, predicted that this year’s proxy season would be all about settling as companies sought to avoid these types of bloody losses. This would be the year that shareholder activists dominated completely as companies ran for cover.

We were wrong. Read more here.

Germany Sets Gender Quota in Boardrooms

by Alison Smale and Claire Cain Miller for The New York Times

Germany on Friday became the latest and most significant country so far to commit to improving the representation of women on corporate boards, passing a law that requires some of Europe’s biggest companies to give 30 percent of supervisory seats to women beginning next year.

Fewer than 20 percent of the seats on corporate boards in Germany are held by women, while some of the biggest multinational companies in the world are based here, including Volkswagen, BMW and Daimler — the maker of Mercedes-Benz vehicles — as well as Siemens, Deutsche Bank, BASF, Bayer and Merck.

Supporters said the measure has the potential to substantially alter the landscape of corporate governance here and to have repercussions far beyond Germany’s borders.

In passing the law, Germany joined a trend in Europe to accomplish what has not happened organically, or through general pressure: to legislate a much greater role for women in boardrooms. Read more here.

Better to Govern a Company Well Than to Manage Crises

by Hugo Dixon for The New York Times

How should companies manage a crisis? Tesco, the British retailer, is the latest large corporation to go through the wringer after it revealed last month that it had overstated its half-year profit estimate by 250 million pounds, or $400 million. Britain’s Financial Conduct Authority has started an inquiry, and speculation is swirling that Tesco might have to sell more shares.

Tesco’s travails offer a case study about what to do (and what not to do) when disaster strikes. Two other big British corporate crises — the ones that afflicted Barclays following a scandal in 2012 over the manipulation of a key international interest rate and BP after its Deepwater Horizon oil rig blew up in 2010 — back up these lessons. Read more here.

Businesses Take a Cautious Approach to Disclosures Using Social Media

By Michelle Leder and Michael. J de la Merced, The New York Times, 25th April 2013

Zynga’s latest quarterly earnings report, released on Wednesday, came in the typical format and was accompanied with the usual financial tables investors expect.

But the social gaming company that counts FarmVille among its games included a new addition: a 204-word paragraph encouraging investors to check its corporate blog and Facebook and Twitter pages for regular news updates.

It was just one of dozens of companies taking advantage of newly clarified rules from the Securities and Exchange Commission that have now blessed the use of social media sites to disclose financial information.

Although social networks have proliferated for years and the public more readily turns to Twitter than the S.E.C.’s Edgar Web portal for updates, the agency just a few months ago was still evaluating whether using newer outlets would violate its rules.

Even with the updated guidelines, uncertainty over what exactly the commission will allow has meant that many companies, and their legal teams, are playing it safe this earnings season. Continue reading…

NYSE Euronext Companies Offer Enhanced Corporate Governance Solutions

January 29, 2013, The New York Times

Corpedia and Corporate Board Member, both NYSE Euronext Companies, have partnered to offer a multi-tiered suite of products to help companies more effectively manage corporate governance responsibilities. The Corporate Governance Leadership Suite consists of three tracks, which include comprehensive tools and resources to help senior governance officers advance the dialogue for compliance and governance best practices.

Through membership in Corpedia’s enhanced Business Ethics Leadership Alliance (BELA), the Ethics & Compliance Track helps companies navigate complex regulatory and legislative mandates. BELA promotes continual advancement of corporate ethics and compliance, by empowering members to raise the public profile of ethics as an important part of an organization’s competitive business strategy

Governance-related policy changes introduced in recent years have increased the focus on the experience and qualifications of corporate directors. The Board Leadership Track, provides boards of directors, corporate secretaries and general counsel unlimited access to a wide-variety of educational opportunities including Peer Exchanges, live events and webinars, and exclusive thought leadership through Corporate Board Member’s Board Leadership Program Continue reading…

Upping the Ante in a Play for a Stronger Board

Steven M. Davidoff, New York Times, 2nd April 2013

Would you pay a director tens of millions for fantastic performance? Welcome to the newest trend in activist investing: hedge funds paying their nominees to a company’s board as if they were chief executives.

The latest examples can be found in two prominent proxy fights. In the first, Paul Singer’s Elliott Management has acquired about $800 million in stock of the Hess Corporation, the integrated oil company. The hedge fund has nominated five directors to the 14-member Hess board and is agitating for change, arguing that the company has substantially underperformed its peers by 460 percent over the last 17 years.

In the second, Barry Rosenstein’s Jana Partners is storming the ramparts of Agrium, acquiring about 7.5 percent of the company, an agriculture supply retailer and wholesaler based in Calgary, Alberta. Jana, which contends Agrium has underperformed its peers by 160 percent over the last five years, has nominated five directors to the company’s 12-member board.

Agitating for changes and waging proxy fights are familiar pages from the activist investor playbook. What’s different here is that each hedge fund is promising to pay its director candidates what are essentially bonuses that could run into millions of dollars, if not more…Continue reading

To Meet Norway’s Quotas, a Crash Course in Board Business

Mark Scott, New York Times, April 1st 2013

OSLO – WHEN Anne-Sofie Risasen joined the Norwegian technology company Evry last year, she already had an impressive résumé. Ms. Risasen, a multilingual computer science graduate, spent years working for the French consulting firm Capgemini before taking a senior role at Microsoft here, where she managed more than 150 workers across Norway.

But Ms. Risasen wanted to raise her game.

So last September, Ms. Risasen, 43, signed up for an executive boot camp. Over the last seven months, she has taken leadership classes at a local business school, attended networking events and taken a battery of aptitude tests to measure her strengths and weaknesses.

“For me, it was a tactical move,” said Ms. Risasen at Evry’s headquarters in a snow-filled business park on the outskirts of the Norwegian capital. “The main reason to take part was to become a board member.”

Started in 2003, the boot camp, Female Future, aims to train the country’s next generation of directors.

The 16-day program, which runs over 10 months, is part business school, part career coach. In all-day workshops, the women are given crash courses on being a director, including training in corporate governance and leadership. Outside trainers also try to bolster confidence by coaxing the women into sharing stories from their own careers, so they can see the commonality in their experiences.

Since its founding, the Female Future program has helped roughly two-thirds of its 1,300 participants secure senior management positions or board memberships. In December, Ms. Risasen was promoted to run Evry’s public sector unit, overseeing 500 employees. She is hoping the training will also put her in line to join the boards of her company’s subsidiaries when she finishes the course in June..Continue reading

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