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Does Your Corporate Governance Rate?
Why are companies and their boards, more than ever, aiming to assure investors of their commitment to best corporate governance practices? Significant new mandates by the SEC and stock exchanges regarding disclosure, governance, and accounting procedures are the legacy of Tyco, Enron, WorldCom, etc. Also, corporate governance issues have become matters of regular media reports and new publications focused on governance. Once passive institutional and retail shareholders have become increasingly vocal and successful on shareholder ballots. There is also an increasing amount of empirical data to support the position that better governance correlates to better shareholder value.
In the context of these developments, there have been established published rating systems that rank on an absolute basis, and analyze and compare the relative corporate governance practices of public companies. Directors should address the implications of the ratings programs and the criteria they use.
Why Should Directors and Executives Care About Corporate Governance Ratings?
- Bad Press. Given the widespread media focus on corporate governance recently, it is clear that bad ratings can make good press. Ratings, including ones in investment firms' analyst reports, are now widely published.
- Empirical Data. Although still not certain, empirical evidence is mounting that good governance correlates with increased shareholder value, and particularly bad governance sounds alarms for increased risk. These include recent studies jointly sponsored by ratings services to support the proposition that ratings are a valuable investment management tool.
- Shareholder Activism. Irrespective of any empirical support for better corporate governance, directors and management cannot afford to dismiss the surge of shareholder activism at recent stockholder annual meetings. Shareholder resolutions are achieving unprecedented success and boards of directors are listening. For example, as of early July 2004, boards had taken steps to implement more than 70 majority votes on shareholder proposals calling for such measures as an end to poison pills and declassifying the board.
New Regulations Favoring Shareholder Governance
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
The Benefits of Blockchain for e-Discovery and Data Preservation
As businesses across various industries increasingly adopt blockchain, it will become a critical source of discoverable electronically stored information. The potential benefits of blockchain for e-discovery and data preservation are substantial, making it an area of growing interest and importance.