Monthly Archives: July 2012

Initiatives to Place Women on Corporate Boards of Directors

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By R. Christopher Small,

The Harvard’s blog on corporate governance wrote an article about the initiatives to place women on corporate BoDs.

You may have heard about the idea of quota system  for women in Boards (France for example), but now in Austriala another program is considered : The Australian Stock Exchange (ASX) has adopted a “comply or explain” diversity disclosure requirement which emphasizes gender diversity.

“In the paper, Initiatives to Place Women on Corporate Boards of Directors, forthcoming in the Australian Corporate & Securities Law Review, I investigate initiatives to place women on corporate boards. In the United States, the representation of women on corporate boards of directors has been flat for 6 years now. By contrast, elsewhere around the world the topic is a hot button issue. This includes Australia where the proportion of board seats held by women has suddenly jumped from 8% in 2010 to nearly 14% today. The Australian Stock Exchange (ASX) has adopted a “comply or explain” diversity disclosure requirement (for emphasis termed an “if not, why not” disclosure requirement), which emphasizes gender diversity. The requirement is even more stringent than the London Stock Exchange (LSX) comply or explain regulation adopted after the Lord Mervyn Davies Report on women in corporate governance appeared in February 2011. The Australian Institute of Company Directors also has instituted a mentoring/sponsorship program, the first of its kind in the world, designed to obtain board seats for women. This article reviews these Australian as well as global developments, including enactment of quota laws (especially Norway and France), certificate and pledge programs (“Rooney Rules”), and hard law disclosure requirements (United States).

As part of a study group which includes governance scholars from Norway, the UK, the U.S., Australia and New Zealand, we interview women company directors, along with company chairpersons and representatives of adjective organizations interested in the subject of diversity on corporate boards of directors. Examples of adjective organizations who have undertaken efforts to place women on corporate boards are, in the U.S., Catalyst, Inc., or Women Corporate Directors (WCD), or in Australia, the Institute of Company Directors (AICD) or the Australian Business Council (ABC). The expected outcome of our study group endeavor is to describe how various women actually have attained elevation to corporate boards and senior management positions, as opposed to the anecdotal and other non-empirical accounts which have dominated the literature to date.

In 2010, at the New South Wales State Library in Sydney, the group interviewed 16 women who serve as directors of publicly held companies, 5 company chairmen, and 4 representatives from adjective organizations. A subsidiary goal is to repeat the process in several countries, developing a comparative as well as empirical model of pathways for women to corporate board seats.”

To read more : blog.law.havard.edu

What to do With Proxies That You Get in the Mail

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By Sheyna Steiner,

On the bankrate website, Sheyna Steiner deals about the next question :
Why your proxy vote matters in proxy season?

“ Proxy season may be winding down, but next year’s voting season will be here sooner than you realize. If you’re at all interested in influencing corporate governance, then learn the ins and outs of proxy voting before your company’s meeting or before next year’s ballots arrive in the spring.

For small-time owners of common stock in companies, it can be easy to discount the importance of participating in corporate governance. Why should management at Exxon Mobil Corp. care about the votes from a shareholder with a measly 100 shares, for instance? But adding your voice to those of other shareholders, big and small, can get attention and influence the decisions of the board of directors, the management and the social and environmental direction of the company.

What is a Proxy? Why Do You Vote It?

Before the annual shareholder meeting, packets of information containing the proxy statement are sent to all shareholders. The proxy statement contains information about the topics to be covered at the annual meeting, including nominations for the board of directors and the pay packages of the top five executives. There are also proposals from management as well as shareholder proposals.

Also included in the mailing is background information on the issues.

The shareholder then fills out the proxy ballot, also known as a voting instruction form, and sends it back.

Alternatively, shareholders can vote by phone or over the Internet.

The various issues up for a vote every year receive different treatment from management. For instance, while the votes for directors on the board are binding, the say on pay vote and those on shareholder resolutions are considered advisory.

For the advisory votes, “there’s nothing legally binding where the company has to make a change. But even if there are just 20% of shareholders who voted in favor of a certain initiative, that’s a lot. When a portion of your shareholders get together in support of an issue, that warrants discussion at least,” says Jessica Clarke, advocate relationship manager at Moxy Vote, a proxy voting research firm.”

The author continue the analyse with the shareholder initiatives and their power over decisions

Shareholder initiatives

“Anyone who owns $2,000 worth of a company’s stock for one year can submit shareholder resolutions to be voted on at the shareholder meeting. Shareholder initiatives span many different environmental, social or governance issues.

Like most investment mailings, proxy voting materials tend to be complex and a little esoteric. In most cases, the nominations for the board of directors are not particularly well-known people, and the other issues up for a vote can also require some research…”

Read the full article on the bankrate website

Risks, Security… Directors, Are You Aware?

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By Jody R. Westby,

The 2012 Cylab Governance published a survey on how boards and senior executives are governing the privacy and security of their organizations’ digital assets (networks, systems, and data).

The report reveal that corporate data at a higher risk of theft or misuse than ever before. These are issues that now require active oversight by boards and senior executives.      The risks are real, fresh in all our minds theexample of the recent web attacks.

Read the Reuters’ article about hacked companies :
(Frustrated by their inability to stop sophisticated hacking attacks or use the law to punish their assailants, an increasing number of U.S. companies are taking retaliatory action.)

It can be concluded that…
“The 2012 CyLab Governance survey results indicate a serious lack of attention at the top. Although organizationally, boards are forming Risk Committees and establishing cross-organizational teams within their organizations, they are not regularly engaging in key cyber governance activities. Nearly half of the respondents indicated that their companies do not have personnel in key privacy and security roles, and 58% of the respondents said their boards are not reviewing their companies’ insurance coverage for cyber-related risks. In addition, only about one-third of the boards that are engaged with privacy and security issues are focusing on activities that would help protect against reputational or financial losses flowing from data breaches and theft of confidential and proprietary information.”

Read the full report on :
www.rsa.com/innovation/docs/CMU-GOVERNANCE-RPT-2012-FINAL.pdf

Senior Management Has No Idea where their Company Data Resides

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According to a recent article on our blog “Confidentialité: du papier au sans papier…“ and the issues of Data’s storage in companies, some societies by their Board of Director hesitate to transmit Data’s company at their IT services. Confidentiality is the key of the Data management and many directors indicate that their senior management has little or no idea where their company data resides.

 

The Agile IT Governance website by one of these author CJ wrote an article about this issue. 

“ The majority of companies surveyed also indicate they have no systems in place to account for which corporate files reside in systems managed by third-party service providers. Companies reported they have no way to track what data is being stored in the cloud and no process to manage access to that data.

In short, the survey reveals that:

- Only 9% of the companies surveyed have procedures in place to control access to data stored in the cloud;

- 23% of organizations are still developing their data access policies;

- 74% of respondents reported that they do not have a process for tracking which files have been placed on third party services;

- 68% either have no plans in place that they are aware of, or live without formal processes for granting and reviewing access

These survey results should be a wake-up call for all companies. CIOs should start developing and implementing strategies to ensure data security as quickly as possible.

Here are some questions that senior managers and the board of directors should be able to answer:

- Do managers know who is responsible for security?

- Does the head of security frequently meet the board of directors?

- When was the last time top managers got involved in security-related decisions?

- Would people recognize a security issue? Would they know who to call?

- Is the company clear on its position relative to IT and security risks?

- What percentage of staff had security trainings?

- Are managers convinced that security is being appropriately addressed in the company?

- Are managers aware of the latest information security issues and best practices?

- What can be done to successfully implement information security governance?

Protecting the interests of the stakeholders is a fundamental responsibility of senior management. This includes understanding the IT risks and ensuring that they are adequately addressed from a governance perspective. To do so effectively you need to manage information security risks, by integrating an information security governance framework into your overall enterprise governance framework. “

Read more on Agile IT Governance website

More articles: Confidentialité: Du papier au sans papier…
Caution – PATRIOT Act …
Les irréductibles du sans papier…