I teach my students and counsel board clients that shareholders elect directors; directors appoint managers; directors are accountable to shareholders; and managers are accountable to directors. This is largely theoretical. Here is the reality: Shareholders: (i) cannot select directors; (ii) …
Recent Posts
- The Corporate Governance Game Changer That Needs to Come To Canada
- A rebuttal to Terence Corcoran’s “OSFI and the bureaucratization of corporate governance”
- Richard Leblanc: Ten reasons that pay governance is broken
- Richard Leblanc: Ten Corporate Governance Trends for 2014
- Gender diversity on boards: My discussion notes
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Shareholder Accountability
Richard Leblanc: Ten Corporate Governance Trends for 2014
1. Active owners focused on performance. Expect pressure by activists and institutions for boards to control under-performing management to continue unabated. Boards incapable or unwilling to rein in inefficiencies, improper capital allocation, asset mismanagement, or operational improvements will be targets. …
Discussion notes for Corporate Secretary Think Tank Canada Panel, 2 October 2013: Panel: Shareholder Activism, 9:30-10:45am
There have been a number of activist situations in Canada recently, including CP, Agrium, Telus, BlackBerry, Tim Hortons and others. Is your board a siting duck or otherwise vulnerable? Here is what the red flags are for defective governance, below. …
The new US CEO to worker pay ratio and vested interests
The US Securities and Exchange Commission announced this week that public companies will be required to disclose the ratio of the annual total compensation paid to their CEO against compensation of that of the median worker, in the form of …
Reforms to director compensation need to occur: Richard Leblanc
Activist investors in both Canada and the US recently proposed – for Hess Corporation and Agrium Inc. – that the independent director nominees they nominated to serve on both Hess’s and Agrium’s boards should be paid incentive pay directly by …
Proposals to Strengthen a Board’s Role in Value Creation, Management Accountability to the Board, and Board Accountability to Shareholders
There have been a handful of activist threats to Canadian companies recently. What these engagements have drawn focus on are defects in public company governance, including the skill sets of existing directors, the board’s focus on value creation vs compliance, …
Does Your Board Chair and Governance and Nominating Committee Need A Reset?
I am currently interviewing shareholder activists, hedge funds and private equity leaders on changes to public company boards to make them more focused on value creation and company performance. I am also interviewing leading directors and CEOs. My research reveals …
Does Your Compensation Committee Need A Reset?
Executive pay practices are in the news on a regular basis. Just in the past few weeks, after meeting with investors, the performance metrics for Citigroup were changed following a failed say on pay vote a year ago. Yesterday, it …
Should governance lawyers be independent?
Most boards need professional advisors, such as auditors, compensation consultants and lawyers. After Enron and WorldCom frauds of 2002, regulators stepped in to ensure that auditors were hired by – and accountable to – the audit committee of the board, …
Are Law Firms Conflicted in this New Governance Normal?
Should a board use the same law firm that management uses? I don’t think so. They teach you in law school that you cannot act for two clients whose interests are, or could be, adverse, e.g., a husband and wife …