Corporate Governance Briefs

In advising non-director officers about conduct that could give rise to fiduciary claims, it is prudent to routinely advise that they take steps to meet the conditions of the business judgment rule. However, practitioners should also keep in mind that there may be a question whether officers will be entitled to that protection.

Companies should carefully review the compensation arrangements of all individuals who were at any time serving as executive officers during the year and any proposed changes thereto in light of the new guidance in order to determine when the Section 162(m) deductibility limit may apply.

Public and private businesses today face many decisions that do not arise from, and have consequences far beyond, solely financial performance. Rather, these decisions are primarily driven by, and implicate, important social, cultural and political concerns. They include harassment, pay equity and other issues raised by the #MeToo movement.

A recent decision by the Delaware Supreme Court raises a question as to whether a plan limit allowing board discretion to grant awards within general parameters will be sufficient to ensure business judgment deference, rather than an entire fairness review.

Audit and compensation committees have already gone through alignment at many public companies. Now it is the nominating committee’s turn for reordering.

The following FAQ provides a helpful review of the steps needed to evolve the annual board development process.

Directors don’t let management “just sit there.” The answer to knowing if your board is effective is having a meaningful board assessment process.

U.S. Sen. Elizabeth Warren has proposed legislation that would require all companies with more than $1 billion in annual revenue to secure a charter from a newly established Office of United States Corporations. It’s hard to think of a sillier idea.

The SEC’s proposal to “fix” Form 13F – the form on which large investment managers report their equity holdings of public companies – could have a significant impact on companies being aware of, as well responding to and engaging with, activist investors – especially at relatively smaller companies, which are are increasingly susceptible to activism.

Failing to have good meeting minutes can have serious adverse consequences. Aside from the potential liability and reputational damage associated with a failure to fulfill fiduciary obligations, transactions can be voided, and so on.