Directors & Boards articles from June 2004

Directors & Boards archives from June 2004

Time to revisit your CIC agreements.(LETTER FROM THE CHAIRMAN)(change-in-control)
June 22, 2004... THE HEADLINE of a recent Wall Street Journal article suggested: "Want a bonus? Acquire a company." Many CEOs have been rewarded handsomely for growing their companies through acquisition. Given the gargantuan size of some golden parachutes,...

The OPM factor.(EDITOR'S NOTE)
June 22, 2004... BACK IN 1982 DIRECTORS & BOARDS published an article entitled, "Is Any CEO Worth $1 Million a Year?" If we were to update that article today, we'd have to add one if not two zeros to that dollar figure. We've just gone through a proxy and...

Lord Black and Duke Dick: directors are not, nor should they think of themselves as, ducal appointees.(QUIDDITIES)(Conrad Black, Richard A. Grasso)
June 22, 2004... IN MEDIEVAL ENGLAND, a county palatine was a shire where a peer of the realm possessed virtually sovereign rights in the administration of justice. It was he, not the king, who appointed judges and sheriffs. "[P]owers of this sort created...

Is the hard market softening? What goes around comes around: important signs are pointing to a softening of the D & O insurance market.(D & O INSURANCE UPDATE)
June 22, 2004... BY ALL KEY MEASURES, the hard market is softening. This observation is based on negotiating nearly 50 D & O insurance policies in recent months and is consistent with the views of experienced brokers interviewed for this column. While 50...

Process is no substitute for personal engagement: yes, there are lots of new rules, but they can't supplant actual involvement with management.(LEGAL BRIEF)
June 22, 2004... BEFORE THE WORLD of corporate governance turned upside down, the role of the board of directors appeared reasonably straightforward. The board's basic function was to hire the senior officers and oversee their management of the company's...

Ideal composition of a board: the focus on independence overlooks the benefits of having a few insiders on the board.(COMPETITIVE EDGE)
June 22, 2004... THE SEEMINGLY unending stream of corporate governance failures over the last few years has made clear the need for more powerful and effective boards. Most board reform advocates and the many new corporate governance rules that are being issued...

The war for talent; The trend is unmistakable: executives are opting for the world of private business.(GUEST COLUMN)(Column)
June 22, 2004... ONE OF US helps prepare future managers for the executive suite, and the other helps place accomplished managers in the executive suite. Though at opposite ends of the career line, we are hearing the same refrain: Get us into private equity!...

McKinsey's Marvin Bower.(DIRECTOR LIBRARY)(Book Review)
June 22, 2004... McKinsey's Marvin Bower. By Elizabeth Haas Edersheim Published by John Wiley & Sons Inc., New York, 305 pages, $29.95 THIS BOOK is a well-written, thoroughly documented analysis of the values, principles, accomplishments, and...

Joe Plumeri, playing in traffic: with his quest for adventure and 'just go for it' philosophy, the CEO of insurance broker Willis Group Holdings has got the competitive spirit kicking in again at this 175-year-old company.(LEADERSHIP)(Interview)(Cover Story)
June 22, 2004... IN MARCH 2004 global insurance broker Willis Group Holdings unveiled the design of its new headquarters in London--a stunning showcase building that promises be an architectural icon (see illustration on page 20). To say that this announcement...

Warning--potential danger ahead! A business judge's starting list of yellow flags for the conscientious independent director.(DUTIES OF DIRECTORS)
June 22, 2004... DO YOU KNOW what standard is typically applied to decide whether a medical doctor is personally liable in a malpractice case? The answer is relatively simple: A doctor can be held liable if he or she did not perform with reasonable care in...

Six common mistakes of audit committees: from failing to fully understand complex accounting concepts to failing to interview key sales personnel, a repeating pattern emerges of shortcomings in the work of the audit committee.(AUDIT COMMITTEES)
June 22, 2004... AUDIT COMMITTEES of public companies are trying their best to adjust to the Sarbanes-Oxley Act of 2002, related SEC rules, and the increased focus by shareholders, corporate governance rating groups, and others on audit committee oversight....

How liable are advisory boards? Since precedent is scarce, caution is prudent.(ADVISORY BOARDS)
June 22, 2004... DURING YOUR CAREER as an executive, you probably hoped that your hard work and dedication would pay off some day with a position on the board of directors of a prestigious public company. Such a position would be a perfect cap to an already...

Protecting your advisory board: uncertainty over liability exposure means that liability may exist, so various protections for an advisory board are still necessary.(D & O INSURANCE)
June 22, 2004... IT'S NOT "directors, officers, and advisory board members insurance," and state corporation statutes don't generally mention advisory board members either. There is no clear legal role, no delineated job responsibilities, and no decision-making...

Managing the release of material information: what's new for directors in the SEC's new accelerated disclosure obligations.(COMMUNICATIONS)
June 22, 2004... TODAY, BOARDS OF DIRECTORS find themselves in new territory. Expansive changes to federal securities laws and unprecedented decisions by the Delaware Supreme Court have materially increased boards' oversight responsibilities as well as their...

Executive committee: a vestigial appendage; In the post-Sarbanes-Oxley era, is there any rationale for having an executive committee of the board, or is it an artifact of a past era of governance?(EXECUTIVE COMMITTEE)
June 22, 2004... TODAY, COMPANIES ARE making an unprecedented effort to ensure board independence, and especially board committee independence. These nonexecutive directors are becoming the "high priests" of all boards. It is to these nonexecutive directors...

A director's guide to compliance software.(REPORT ON COMPLIANCE SOFTWARE)
June 22, 2004... AN EXECUTIVE of our acquaintance--a longtime member of multiple public company boards--looked at us during a recent meeting with the DIRECTORS & BOARDS team. "Enterprise compliance software," he said. "What is it? Why do I need to know...

The traps in designing benefit packages: when crafting benefit plans for their top brass, corporations often make these 10 common mistakes.(EXECUTIVE COMPENSATION)
June 22, 2004... THE SIZE AND NATURE of executive benefits packages have captured headlines in recent years with Enron's missteps and Congress' resulting efforts at compensation reforms. Despite this new acute awareness of how these packages are developed,...

'Taking inventory' of the CEO: an effective assessment process will ensure the development of stronger CEOs. Here is a model of a comprehensive and fair process.(PERFORMANCE EVALUATION)
June 22, 2004... FACTS. OBJECTIVITY. Certainty. Measurability--the most critical tenet of management, right? Any student of economics can tell you that earnings are produced only when sales and costs are understood and well managed. The MBA graduate can expound...

Rising expectations of fund directors: mutual fund boards can take the lead in improving fund governance by ensuring that the board is truly independent and qualified, and by increasing the transparency of the nominating process.(SPENCER STUART GOVERNANCE LETTER)
June 22, 2004... A PROFOUND CHANGE in the way mutual fund governance is viewed is rippling through the industry, set off by revelations of abuses involving market-timing and late-trading, as well as by greater awareness of the sometimes high undisclosed costs...

Directors Roster: a quarterly record of new director appointments sponsored by Spencer Stuart.
June 22, 2004... THE DIRECTORS & BOARDS Directors Roster--a quarterly record of new director appointments--is compiled from public and private sources by the editorial staff of DIRECTORS & BOARDS, and is sponsored by Spencer Stuart. Please forward your...

Company index.(DIRECTORS ROSTER)
June 22, 2004... 7-Eleven Inc. 99 Cents Only Stores Acxiom Corp. Administaff Inc. Aeropostale Inc. AES Corp. Altiris Inc. Ambac Financial Group Inc. America West Holdings Corp. Amerigroup Corp. AMIS Holdings Inc....

Directors index.(DIRECTORS ROSTER)
June 22, 2004... Andersen, Allen, Nu Skin Enterprises Inc. Anderson, Basil L., Moody's Corp. Ankeny, Philip D., Innovex Inc. Armey, Richard K., Rent-A-Center Inc. Armstrong, Greg L., Varco International Inc. Ayres, Merribel S., CMS Energy...

A ringside seat: board service is an education in American business at its best and worst.(ENDNOTE)
June 22, 2004... DURING THE 1980s, in addition to pro bono activities I sought to cushion my dwindling interest and fermenting disenchantment with the private practice of law by joining several corporate boards of directors, beginning with Chrysler. I had...