Category Archives: Corporate Social Responsibility

Why not set up board’s police?

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Imagine a new law enforcement bureau is formed to investigate and bring to justice the perpetrators of crimes on Nonprofits’ Boards?

 This elite force, known as The Board Police, works mostly undercover, passing themselves off as ordinary citizens serving on unsuspecting boards looking to identify boards or individual board members guilty of governance crimes or misdemeanours.

Here are the top crimes we want you to be on the lookout for!

Loitering - You know what it means to loiter, it’s to stand idly about or linger aimlessly. It is reported that a high percentage of nonprofits’ board members are accused of this crime!

Impersonating a board officer - In many meetings, you may have difficulty spotting the board officers.

Dereliction of Duty - This one may require some detective work as the most flagrant violators rarely show up at meetings.

Þ    Be careful: However, exercise care here, as taking too much interest may certainly out you as an undercover operative!

Harassment – includes any kind of behaviour that is intended to annoy, disturb, alarm, torment, upset, or terrorize another.

Disorderly conduct - Reports exist of instances where a few board members get so worked up that they become verbally abusive and begin shouting at others in the room.

Misappropriation of focus – We know you’re familiar with misappropriation of funds — which itself is a serious crime. However, misappropriation of focus is also serious, but often undetected.

Conspiracy - You may not witness this at first as it takes time to earn the trust of the conspirators and be taken into their confidence. Conspiracy occurs when two or more people get together to plot and plan a course of action.

Þ    You’ll know you’re in when you get invited to the “special meeting” of the select board members.

Obstruction of governance – any act or action that distracts the board from having substantive discussions or decisions about important issues or policies to move the organization forward in a strategic manner.

Þ    They are all ploys to prevent real governance from occurring.

 

We need you to be diligent in your work!

This article is an extract from: Crimes and Misdemeanours of Nonprofits Boards

 

 

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

Corporate Governance and the Problem of Executive Compensation

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By J Robert Brown Jr

“Corporate governance is one of those topics that only seems to grow in importance.  Some of the importance comes from increased organization of shareholders. 
The public has also become increasingly aware of these sort of issues.  What was once a matter betwen managers and owners has now become an issue debate within the public at large.”  

J Robert Brown in .theracetothebottom.org website, author of this article deals about the issues of executive compensation.

Compensation issues raise questions about the role of the board of directors. For public companies traded on a stock exchange, there must be at least a majority of independent directors.  In fact, the largest public companies typically have a super majorityof independent directors.  Yet this structure has been unable to stop a steady increase in the amount of compensation, the payment of unnecessary perqs, and, until say on pay, a not uncommon disconnect between pay and performance.  Nor has the structure stopped an escalation in director compensation.

This is one of those areas where the problem is clear, the source obvious, and the solution straightforward.  State law determines the obligations of the board, including those connected to the approval of executive compensation.  State courts, particularly those in Delaware, have adopted standards that impose no meaningful limits on executive compensation.  This phenomena is discussed at length in Returning Fairness to Executive Compensation.

The Solution ?
Read the article on Theracetothebottom.org

 

Should CEO board service be limited?

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By Paul Hodgson

On the Corporate Secretary.com website, Paul Hodgson wrote an interesting article on the exchange of skills and experience of a senior executive. The author ask himself a series of issues about it :

“But what about when service on other companies’ boards begins to interfere with the effective practice of an executive’s primary position? What about when the executive is a CEO?”

We have already talking about Conflict of interest but in this case, this topic is not concerned. In fact, the eventual problem could be the CEO’ concentration level. As the author wrote “What is arguable is whether the CEOs of some of the largest companies in the world have the time to meet their increased duties.”

Read this article on the Corporate Secretary Website

2011 Board Practices Report – Deloitte

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This report by the Deloitte Center for Corporate Governance and the Society of Corporate Secretaries and Governance Professionals provides results from a survey of over 200 corporate secretaries on topical governance questions, including shareholder engagement, board committees, strategy, and sustainability. New to this eighth edition is an analysis of director qualifications, which includes insight on board composition related to gender, age, and ethnicity…

2011 Board Pracices Report by Deloitte


Corporate Governance, Risk Management and Corporate Social Responsibility in Emerging Markets: A Symbiotic Relationship

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By Robert Adamson
Executive Director, CIBC Centre for Corporate Governance and Risk Management

“As corporate governance continues to be an area of focus for most companies, regardless of whether they are involved in global operations, there are many questions and issues that firms still struggle with:  What is good corporate governance and why is it so important? Why are so many firms and governments promoting improved techniques in corporate governance? What are those techniques and best practices and is there evidence that these reforms and policies are useful for firms in promoting transparency, sustainability and the confidence of global markets and investors?

In general, corporate governance is about how companies make decisions, how they organize themselves and how they communicate with shareholders and the rest of the world. Typically, corporate governance deals with issues such as how boards and executives are chosen, what mandate and responsibilities boards and executives have,  whether shareholders have any right to participate in certain types of corporate decisions through voting and, if so, what form these shareholder rights take.

These issues are important because they promote good business practices, good decision-making and opportunities for investors to ensure the integrity of their investment. Because these issues are so important to developing good businesses and a good business environment, both companies and policy-makers are very interested in ensuring that good corporate governance is adopted widely and is effectively institutionalized throughout the firm.

So why are companies themselves so concerned and preoccupied with corporate governance, risk management and CSR? Many companies recognize that good corporate governance, risk management and CSR is good business practice, good business strategy and what many companies are focusing on to improve their business, particularly in the emerging global marketplace where companies are constantly trying to outdo each other to make their business more effective and to attract new investors. Companies, particularly those that are well-managed, want to develop good business practices, improve their decision-making and provide reasons for investors to invest in the company. While these firms are highly motivated and successful at adopting and implementing good corporate governance practices,  other companies may not acknowledge the importance and value of adopting and investing in corporate governance, risk management and CSR…”

This is an extract from business.sfu.ca, to read more: http://business.sfu.ca


Corporate Governance and Corporate Social Responsibility (CSR)

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From corporate governance… 

The corporate governance concept was born just after the economic crash of 1929.  However corporate governance as we know today only appeared at the mid-1990.
The corporate governance is a set of processes, regulations, laws, and institutions that have an important influence on the way that the company is managed, administered and controlled. It involves a set of links between the different stakeholders of the organization. Furthermore the whole decision-making process (shareholders, board members and the CEO) is influenced by governance.
To summarize, corporate governance is about how companies make decisions, how they organize themselves and how they communicate with shareholders and the rest of the world.

…To corporate governance and CSR

The corporate governance has changed. Now, it is not enough to control how companies make decisions, how they organize themselves and how they communicate with shareholders and the rest of the world. For many companies the corporate social responsibility is a way to better engage with many of their stakeholders, including investors and consumers. Corporate governance and CSR are resulting into formalization and definition of ethical policy, a better oversight of safety principles, setting up risk management program, and many other policies.
The Corporate Social Responsibility is a way for organizations to improve clearly corporate governance processes.