Recently in Corporate Governance Category

Getting a letter addressed from a law firm can be cause to cause consternation, but one signed off by nine different law firms can lead to a medical condition.  Fortunately the letter sent to Securities and Exchange Commission (SEC) signed by multiple law firms was in support of its proposal to beef up shareholder rights.

Nine major securities and corporate governance law firms signed their support of the SEC initiative in a letter, in light of comments made by certain New York law firms challenging the SEC's proposed rule.  The SEC rule, called "Facilitating Shareholder Director Nominations" would require a company to include its shareholders' nominees for director in proxy materials.

It all comes down to accountability.

Now, attorneys are notorious for thinking they matter, a lot.  But Ethisphere.com has tried to employ some criteria to determine which in-house attorneys represent the creme-de-la-creme of corporate counsel.  The list spans all practice areas and includes federal agencies.  And, in the nouveau trend of social entrepreneurship, the list also takes into consideration top-notch public service, legal community engagement, and academic involvement.

Curious? We thought so.

In an interesting, but not shocking, corporate governance development, Google CEO Eric Schmidt announced  this week that he is stepping down as a director of Apple's eight-member board.  It is not merely coincidence that the news follows Google's June announcement of the company's development of ChromeOS--a laptop operating system--edging it closer to Apple's core business of laptop and desktop technology.  In fact, the Federal Trade Commission (FTC) has already raised an eyebrow at the inter-corporate nature of the board and any potential consequences of limiting competition.

Though Schmidt's departure detaches him from Apple's board after a three-year tenure, Google is still a part of the Apple pie, if by association.  Genentech CEO Arthur Levinson remains on the boards of both companies.

It's been a while since I posted anything on the GM bankruptcy, and the hiatus has been completely deliberate.  With so much news and speculation swirling around the proceedings, it would be easy to let the affair completely take the blog over.

But yesterday's opinion from the bankruptcy court judge definitely deserves a post, especially since one of the key points in the opinion deals with the disposition of injury lawsuits against the company.

The Supreme Court has agreed to hear Merck's appeal of a 3rd Circuit decision allowing a shareholder suit over the painkiller Vioxx, in what will likely become an important case for shareholder suits of all kinds.

The question presented is when the two year statute of limitations period for shareholder suits commences.  More precisely, exactly how much notice of wrongdoing is required before the statute begins to run?

The SEC is starting to sound like it doesn't have much faith that shareholders will hold boards of directors accountable for their failings under the current system.

On Wednesday, the agency opened a proposal to public comment that would allow shareholders who own a certain percentage of a company's stock to place their nominees for the board on the annual proxy ballot that goes out to all the company's shareholders.

This could give small blocs of shareholders more of a say on issues like executive compensation and the levels of risky behavior that companies engage in.

According to a survey by the AFL-CIO, more CEOs received increases in compensation than pay cuts last year.  This occurred despite increased scrutiny of executive pay and new rules imposed after the government began a bailout of financial companies.

The news is likely to cause some outrage since 2008 also saw the largest drop in employment in almost 30 years.  Politically, it will be hard to justify bailing out companies if CEOs are receiving more money than they did when the crisis began.