Review: Getting Women on to Corporate Boards

GettingWomenontoCorporateBoardsThis slim but informative volume contains contributions from practitioners, policy-makers, principle-setters, advocacy groups and researchers on gender balance in the boardroom, the outcomes of the Norwegian quota law and its snowball effects in other countries. The book came out of a Think Tank organized in Oslo in March 2011. The Norwegian quota law demanded a minimum share of either gender of 40% on boards of publicly listed companies, about 1500 corporations as of January 2008.

Norway took a radical approach. The penalty for not meeting the quota was dissolution. No company took that chance. By any reasonable measure, the Norwegian law is a success. Has Norway’s example started a “wave effect” of momentum around the world? I think so, although Norway had a head start over most countries because they already had a strong base of human rights. Continue Reading →

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Video Friday: The Coming Collapse of the American Corporation?

Gerald(Jerry)DavisFrom a CSES Lecture Series event held on February 6th, 2014 at Cornell University. Gerald (Jerry) Davis presented his research “The Coming Collapse of the American Corporation (and What Comes Next)?”

Shareholder-owned corporations were the central pillars of the US economy in the twentieth century. Due to the success of the shareholder value movement and the widespread “Nikefication” of production, however, public corporations have become less concentrated, less integrated, less interconnected at the top, shorter-lived, and less prevalent since the turn of the twenty-first Continue Reading →

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Apple Inc. (AAPL): How I Voted – Proxy Score 89

silver-apple-logo-apple-pictureStockUnderValueExtraxtionApple Inc. (NASD:AAPL) is one of the stocks in my portfolio. Their annual meeting is coming up on 2/28/2014. ProxyDemocracy.org was down for maintenance when I checked and voted on 2/19/2014, so no voting advice there. I checked a few other sources such as CalPERS, Florida SBA and OTPP but none had disclosed their votes on their sites as of yesterday. I voted with 89% of the Board’s recommendations. View Apple’s Proxy Statement. Continue Reading →

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Fleming to Head SEC’s Office of the Investor Advocate

Rick A. Fleming

Rick A. Fleming

The Dodd-Frank act created a new permanent Investor Advisory Committee (SEC-IAC) to consult with and advise the SEC on matters, such as making recommendations to Congress for legislative changes on the regulation of securities products, trading strategies and fee structures, the effectiveness of disclosures, and other investor protection initiatives. The IAC is comprised of the head of a newly created Office of the Investor Advocate, a representative of senior citizens, a representative of state securities commissions, and 10 to 20 representatives of individual and institutional investors appointed by the SEC. Almost two years after establishing the new SEC-IAC, Rick A. Fleming has been named as the first head of the agency’s Office of the Investor Advocate (OIA). Continue Reading →

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Quick Bites on Corporate Governance

J. McRitchie

J. McRitchie

CorpGov.net publisher/shareowner activist, James McRitchie in the news.

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CSP Inc. (CSPI): How I Voted – Proxy Score 100

CSPIThe $CSPI annual shareowners meeting is coming up February 11, 2014, so there isn’t much time to vote. Since most readers are not familiar with this obscure company, I’ll start with a description from GMI Ratings:

CSP Inc. (CSPI) along with its subsidiaries, develops and markets information technology (IT) integration solutions and high-performance cluster computer systems. The Company operates in two segments: Systems segment and Service and System Integration segment. The Systems segment consists primarily of CSPI’s MultiComputer Division (the MultiComputer Division), which designs and manufactures commercial Continue Reading →

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A Big Reason Small-Caps Undertake Bad Financings: Board Composition

Adam Epstein - Web - CroppedGuest Post: Adam J. Epstein is a NACD Board Leadership Fellow, the small-cap contributing editor to Directorship magazine, and advises small-cap boards through his firm, Third Creek Advisors. He is the author of The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies (McGraw-Hill, 2012). A version of this article first appeared in the Jan/Feb ’14 issue of Directorship magazine. Mr. Epstein can be reached at ae@thirdcreekadvisors.com. More from Epstein on CorpGov.net.

Much is said and written about initial public offerings in this country from seemingly every possible angle. Interestingly, though, there is an equally important financing ecosystem in the U.S. capital markets that is similar in size to and sometimes even larger than the IPO market, about which comparatively little is said or written. Continue Reading →

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Directors Forum 2014: Afternoon Sessions

RotundaBelow are notes I took during the afternoon sessions at the Corporate Directors Forum 2014, held on the beautiful campus of the University of San Diego, January 26-28, 2014. This year, I was only able to attend on January 27th. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion.

If you are a director or candidate, investor, senior corporate officer, board or management advisor, academic, or are in some way part of the corporate governance industrial complex or want to be, I hope to see you there January 25-27, 2015. If you attended the Forum this year and have ideas for articles you would like to see or to write for CorpGov.net, please email me your ideas or drafts. Part 1. Continue Reading →

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Directors Forum 2014: Morning Sessions

Kroc-School-of-Peace-and-Justice-University-of-San-DiegoBelow are some notes I took during the morning sessions at the Corporate Directors Forum 2014, held on the beautiful campus of the University of San Diego, January 26-28, 2014. This year, I was only able to attend on January 27th. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. Continue Reading →

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Video Friday: Margaret Blair – Making The Hard Call: The Unheralded Role of Corporate Boards of Directors

MargaretBlairThe UBC Faculty of Law welcomed its fourth Fasken Martineau Visiting Senior Scholar, Professor Margaret Blair. Professor Blair is an economist who focuses on management law and finance. Her current research focuses on five areas: team production and the legal structure of business organizations, legal issues in the governance of supply chains, the role of private sector governance arrangements in contract enforcement, the legal concept of corporate “personhood,” the historical treatment of corporations by the Supreme Court, and the problem of excessive leverage in financial markets.

Webcast sponsored by the Irving K. Barber Learning Centre and hosted by the Faculty of Law at the University of British Columbia. It has become part of the accepted corporate governance wisdom in the U.S., as well as in numerous other countries, that boards of directors of publicly-traded corporations Continue Reading →

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Proxy Access is Needed at Apple

silver-apple-logo-apple-pictureDespite the Apple Board’s best effort to obtain a “no-action” letter to exclude my proxy access proposal, it is included among the items to be voted on at or before the annual meeting to be held on February 28 at our Company’s principal executive offices in Cupertino, CA.  See Apple’s proxy, Proxy Proposal 11, ‘Proxy Access for Shareholders’ on page 63. (A minor gripe – why doesn’t Apple provide a linked index to our proxy so that shareholders can easily flip to the subject they are looking for? Let’s hope part of their strategy isn’t making it too hard to analyze the issues and vote.)

Here’s the thrust of my argument. We need directors who can address the big money pile – not with short-term buyback strategies that facilitate extraction of value but with long-term strategies that create value. Investing $150B in Treasuries or money markets is not efficient use of our money. The returns of Google Ventures, for example, are far above the industry’s mean. There is no reason why Apple couldn’t also put our money to good use though an Apple Ventures type of vehicle or through a revamped and enhanced Blue Sky program.  Continue Reading →

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Take Action: Join Nader’s Penny Brigade

RalphNaderSome have argued that Ralph Nader started socially responsible shareholder activism with Campaign GM, when the group filed shareholder proposals to expand GM’s board to include consumer advocates and empower shareholders to place their board nominees on GM’s proxy ballot (proxy access).  According to a recent article in the WSJ, the longtime consumer advocate is now putting together a shareholder-activism group. (Ralph Nader Adds Shareholder Activist to His Portfolio, 1/15/2014) Continue Reading →

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Review: Corporation Nation

Corporation Nation (Haney Foundation Series) by Robert E. Wright  delves into the history of the corporation, particularly in pre-Civil War United States (the antebellum period). Like the earlier reviewed Shareholder Democracies?: Corporate Governance in Britain and Ireland before 1850, Corporation Nation addresses central issues such as agency theory, democracy and public interest through the lens of history.

Despite protests that corporations were potentially corrupting, U.S. state governments early on combined to charter more corporations per capita than any other nation—including Britain—effectively making the United States a “corporation nation.” Robert E. Wright traces the shift in corporate governance from relatively self-governing business republics to the much more regulated entities we are familiar with today. Continue Reading →

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Video Friday: The Myth of Maximizing Shareholder Value With Bill Lazonick

InstituteForNewEconomicThinkingThe Institute for New Economic Thinking has a mission to nurture a global community of next-generation economic leaders, to provoke new economic thinking, and to inspire the economics profession to engage the challenges of the 21st century.  Learn more about the Institute. Read their research papers. Check out their Blog. Join their mailing list.

In the video below, Bill Lazonick talks about government’s historic involvement in the economy and the role of workers. Executives say workers are their most important assets but Lazonick reminds us they are not on the balance sheet; we abolished slavery long ago. Since the 1980s, there has been less emphasis on investing in workers. The ideology of ‘shareholder value’ actually has influenced how business allocates profits. Continue Reading →

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Technology at the Top, the Changes Made in the Boardroom

Amanda-Biggs

Amanda Biggs

Guest post from Amanda Biggs, web manager and governance writer. By participating in the expansion of the Leading Boards portal for boards of directors, she has specialized on issues concerning the arrival of technology inside the boardroom.

All through the last decade new technology solutions and tools have moved from being non-existent to becoming a “must have” for many directors worldwide. Indeed, research and development led to “board portals” which are adapted to the boardrooms’ needs and have become be necessary for the modern challenges that boards face concerning workflow and management. The advent of the iPad with its mobile Continue Reading →

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SEC-IAC to Meet January 31st

SECThe Securities and Exchange Commission Investor Advisory Committee (SEC-IAC), established pursuant to Section 911 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, will hold a public meeting on Friday, January 31, 2014, in Multi-Purpose Room LL-006 at SEC headquarters, 100 F Street, NE, Washington, DC 20549. The meeting will begin at 10:00 a.m. (EDT) and end at 4:30 p.m. and will be open to the public, except during portions of the meeting reserved for meetings of the Committee’s subcommittees.
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Review: Handbook of Research on Promoting Women’s Careers

The march of women into the upper echelon seems inevitable. A few points from the introduction:HandbookOfResearchOnPromotingWomensCareers

  • 60% of recent university graduates have been women, 50% of those graduating with advanced degrees in law and medicine, 1/3 of those with MBAs.
  • There will be labor and skill shortages in all developed countries over the next two decades as baby-boomers retire.
  • Women make 89% of the consumer purchasing decisions.
  • Companies with more women in top management positions are more successful.
  • Women are less greedy, less likely to engage in theft, fraud and corruption, protecting their organizations from failure and poor reputation.
  • Organizations retaining and advancing qualified women have an advantage in the war for talent. Continue Reading →
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Investing in Women & Inalienable Rights: Part II

Yesterday, in Part I, I discussed the most recent UC Davis Study of California Women Business Leaders: A Census of Women Directors and Executive Officers and how it led me to invest disproportionately in firms with more women CEOs and NEOs. Just how are women different than men and what kind of changes can we expect or hope for?

More Evidence Women Leaders Make Difference

And there is this from a recent article in The Economist (Vive la différence!, 12/7/2013): Men&WomenBrainWiring

MEN and women do not think in the same ways. Few would disagree with that. And science has quantified some of those differences. Men, it is pretty well established, have better motor and spatial abilities than women, and more monomaniacal patterns of thought. Women have better memories, are more socially adept, and are better at dealing with several things at once. There is a lot of overlap, obviously. But on average these observations are true…

the cross-talk between them in women, suggested by the wiring diagrams, helps explain their better memories, social adeptness and ability to multitask, all of which benefit from the hemispheres collaborating. In men, by contrast, within-hemisphere links let them focus on things that do not need complex inputs from both hemispheres. Continue Reading →

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Investing in Women & Inalienable Rights: Part I

UCDstudyCAWomenBusinessLeadersSince starting this blog in 1995, I’ve pushed for greater diversity on boards and in named executive officers (NEOs). Progress has proceeded at a glacial pace, at least in the United States. For the ninth year, the UC Davis Graduate School of Management, in partnership with Watermark, published the annual UC Davis Study of California Women Business Leaders: A Census of Women Directors and Executive Officers. The study found the average Top 25 firms (which have 25+% women at upper levels) makes three times as much revenue and almost 50% more net income than the average company in the study (which has 10.9% women).

After reading the study, I took the plunge, investing in seven of the top 25 California companies with the highest percentage of women leaders. Hopefully, investing in women will reap additional rewards and will help me carry on with my efforts to make corporate governance more democratic. Women obviously bring a different perspective that pays financial dividends. Will women in positions of power also result in a more salubrious environment, recognition of human rights and a more equitable distribution of wealth?

I invested in the following: Annie’s (BNNY), Medivation (MDVN), Genomic Health (GHDX), Bio-Rad Laboratories (BIO), NETGEAR (NTGR), Symantec (SYMC), and Visa (V). I’ve been trying to invest in Yahoo! (YHOO) and SciClone Pharmaceuticals (SCLN) but haven’t been successful at the prices I’ve bid. I already had investments in Walt Disney (DIS). See all my investments under Disclosures. Continue Reading →

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Take Action: Support CII Rulemaking Petition for “Universal” Proxy

CII-logoThe Council of Institutional Investors (CII) filed a rulemaking petition with the Securities and Exchange Commission (SEC) asking that it amend its rules for contested elections so that “shareholders can vote for any combination of management and dissident nominees they wish to represent them.”  I hope readers will join with me in sending e-mails in support of the petition to the SEC.  Instructions on how to do so can be found at the bottom of this post. 

This petition is a followup to action they took on July 23, 2013 when the Policies Committee of CII approved a draft proposal for a Universal Proxy. Key, was addition of the following sentence to their policy on director elections:

To facilitate the shareholder voting franchise, the opposing sides engaged in a contested election should utilize a proxy card naming all management-nominees and all shareholder-proponent nominees, providing every nominee equal prominence on the proxy card.  Continue Reading →

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