”Thoughts on the Business Roundtable’s Principles of Corporate Governance”

Following the release of the ”Commonsence Principles of Corporate Governance ”  by a diverse, twelve-member coalition of executives of major corporations, asset managers and one shareholder activist in America in July 2016, the influential Business Roundtable (“BRT”) recently released a set of corporate governance principles which are to provide guidance on governance disclosure.

Whereas the Commonsence Principles of Corporate Governance are mainly 8 recommendations on roles and responsibilities of the board, companies and shareholders, the BRT Principles extensively cover the key governance issues such as board responsibilities, roles of key corporate actors, committee responsibilities and other, elemental, governance concerns historically addressed by the organization.

In his article, Michael W. Peregrine, of McDermott Will & Emery LLP shares his thoughts on the BRT Principles that articulate these governance issues on  long term value sustainability, shareholder engagement, board diversity, committee practices and succession matters.

Read full article here.

Source: Havard Law School Forum on Corporate Governance and Financial Regulation

Principles of Corporate Governance 2016 by the Business Roundtable

”Foreword and Introduction

Business Roundtable has been recognized for decades as an authoritative voice on matters affecting American business corporations and meaningful and effective corporate governance practices. Since Business Roundtable last updated Principles of Corporate Governance in 2012, U.S. public companies have continued to adapt and refine their governance practices within the framework of evolving laws and stock exchange rules. Business Roundtable CEOs continue to believe that the United States has the best corporate governance, financial reporting and securities markets systems in the world. These systems work because they give public companies not only a framework of laws and regulations that establish minimum requirements but also the flexibility to implement customized practices that suit the companies’ needs and to modify those practices in light of changing conditions and standards.

”Arora’s departure shakes SoftBank’s global strategy”

 

”Arora also assembled a reliable, well-connected team of assistants and advisers within SoftBank. A weekly conference call connecting members of “Team Nikesh” in Tokyo, London, India and on the U.S. West Coast to their leader to discuss possible investments has become established practice — an arena for information to be brought in from around the world, and the merits of promising ventures debated.

One of SoftBank’s early — and often talked about — investments is Chinese e-commerce giant Alibaba Group Holding. Son funded Alibaba with 2 billion yen ($19 million at current rates) out of a fondness for founder Jack Ma, who was unknown at the time. That stake has yielded some 10 trillion yen in latent gains 14 years later. Though Son is famed for his sharp foresight, what lurks behind his investment decisions is “something akin to a hobby,” he has said. “It’s produced success on occasion, but quite a few failures as well.”

Paula Loop & Paul Denicola: ”Investors and Board Composition”

”In today’s business environment, companies face numerous challenges that can impact success—from emerging technologies to changing regulatory requirements and cybersecurity concerns. As a result, the expertise, experience, and diversity of perspective in the boardroom play a more critical role than ever in ensuring effective oversight. At the same time, many investors and other stakeholders are seeking influence on board composition. They want more information about a company’s director nominees. They also want to know that boards and their nominating and governance committees are appropriately considering director tenure, board diversity and the results of board self-evaluations when making director nominations. All of this is occurring within an environment of aggressive shareholder activism, in which board composition often becomes a central focus………”

”Third Point’s Successful Shareholder Activism a Sign of Progress in Japanese Corporate Governance”

”Historically, shareholder activism has rarely been successful at Japanese companies. However, as Japan moves closer to a Western model of corporate governance, shareholders may be playing a larger role in the strategy and leadership of some Japanese companies. This has recently been exemplified by the apparent influence of Daniel Loeb, from the hedge fund Third Point, on the leadership of Seven & i Holdings (“the Company”), which holds its annual general meeting on Thursday, May 26.

Hoang C. C. et al : ”Institutional Investors and Trends in Board Refreshment”

”As many institutional investors have concluded, prevailing governance policies and practices have not produced desired board refreshment, which these investors would support in order to strengthen expertise, promote diversity and provide fresh perspectives in the board room. At the same time, companies and investors alike appreciate that term and age limits, as they have been typically applied, may not be the solutions, because they force the arbitrary retirement of valuable directors.

Report: ”Does CEO succession Planning Disclosure matter?”

 IRRC INSTITUTE New Report by Annalisa Barrett, Founder and CEO of Board Governance Research LLC. Successful CEO transitions Correlate with More Robust Disclosure, but Succession Planning Disclosure Frequently is Non Existent and Often Inconsistent – A US perspective Executive Summary: ”Shareowners and other stakeholders have been calling for more information about CEO succession planning. This […]