ESG Ratings and the Board

Talk of ESG seems to be everywhere but are boards saying “enough”?  According to Morningstar, ESG or sustainable funds grew to almost 400 in 2020, up 30% from 2019. But, as we come close to the end of 2021, ESG seems to be dropping from the board agenda according to a recent survey by Diligent.…

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What do Activists Look for When Targeting a Board?

Activists focus on certain board of director vulnerabilities and target those companies who have them. And while the pandemic brought a number of environmental and social issues to a head, there are certain red flags – mostly relating to a board’s composition – that attract shareholder activists. Because the board has an obligation to address…

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Who is Governing the Firm – Companies or Investors?

There’s no doubt that proxy voting is a time-consuming and often challenging process. Proxy advisory firms saw a need to serve a new market by helping institutional investors navigate the vast amounts of proxy votes on a myriad of issues. Now, that market is both large and powerful. It’s dominated by Institutional Shareholder Services (part…

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What are the Barriers to Board Refreshment?

Board refreshment continues to be hotly debated. But discussions about what it means, and how boards do it, vary considerably. Governance experts generally agree it involves the potential for complacency and a lack of director independence. As noted by Institutional Shareholder Services, “While shareholders, directors, and other market constituents vary as to the reasons for…

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Rationalizations for Boards to Consider

Sometimes it’s difficult to talk about our values and immediately change the behaviors of ourselves or others because, typically, our inner thoughts and emotions present us with a rather sophisticated set of rationalizations for either acting or not. There are a number of ways others can push back on your ideas – common rationalizations –…

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CEO Compensation, Peer Groups & COVID-19

There is a great deal of board-level discretion in executive pay, but at the same time, it is highly scrutinized in the media and among proxy advisory firms, regulators and shareholders alike. Publicly traded companies are required to have a “comp” committee which, at a minimum, sets the pay and benefits for corporate executives, most…

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The Materiality Maze for Firms

Defining Materiality Materiality matters – it is the cornerstone of financial, and increasingly non-financial, reporting – because it helps determine the importance of an information item for a variety of users. The global capital markets move on information that public companies have about their financing, investing or operating activities. Responsibility for the disclosure of material…

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Does a board seat make you a board expert?

There have long been suggestions that there is not – or should not be – a one size fits all approach to corporate governance. Some of the criticisms of this approach have been that each board is different with respect to industry, culture, competition, technology etc. And while true, experience on one board does not a governance expert make.

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Let values drive your board

The corporate governance of firms and the role of the board of directors are at a crossroads. On the one hand, it has never been more vital to the workings of a business. On the other, it has never been more challenging. As boards grapple with new regulations about transparency and accountability, sustainability concerns, executive…

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