TheCorporateCounsel.net

Below are the results from a recent survey we conducted on the topic of how board committees interact with the full board:

1. Do the chairs of your company’s primary board committees (audit, nominating & governance and compensation) provide oral reports to the board about what transpired during their committee meetings?
– Routinely – 93.0%
– On occasion – 2.8%
– Rarely – 4.2%
– Never – 0.0%

2. If so, how long do these oral reports last on average?
– Under five minutes – 22.4%
– Between five and ten minutes – 50.8%
– Between ten and fifteen minutes – 19.4%
– Over fifteen minutes – 7.5%

3. To whom does the company circulate minutes of committee meetings?
– All directors – 40.9%
– Only the committee’s members but allow other directors to request a copy – 47.9%
– Only the committee’s members – 11.3%

4. The company’s primary board committees ask for board ratification of actions taken during a committee meeting:
– Routinely – 21.1%
– On occasion – 46.5%
– Rarely – 22.5%
– Never – 9.9%

5. The company’s primary board committees meet jointly with another board committee:
– Routinely – 2.8%
– On occasion – 26.8%
– Rarely – 35.2%
– Never – 35.2%

Please take a moment to respond anonymously to our “Quick Survey on D&O Questionnaires and Related-Party Transactions.”

More Recent Board Stats: Spencer Stuart Study

Recently, the latest “Spencer Stuart Board Index” – which annually looks at the state of corporate governance among the S&P 500 – was released. Among its findings:

– Majority voting: 65% of boards report that they require directors who fail to secure a majority vote from shareholders to offer their resignations. This is up from 56% last year.
– Director term limits: One-year terms for directors are now the norm in 68% of S&P 500 boards, versus 38% 10 years ago.
– Independent leadership: Half of all boards have only one insider, the CEO, up from 44% last year. And 37% split the chairman and CEO roles, versus 20% a decade ago.

Additionally, the study found that the profile of directors continues to evolve: Of the 333 new independent directors in 2009, just over one-quarter are active CEOs, COOs, or chairmen, down from 53% in 1999. Meanwhile, retired CEOs and leaders of divisions and functions now make up 17% and 21% of the new director pool, respectively.

California’s Placement Agent Legislation

From Keith Bishop of Allen Matkins: Recently, the press has been publishing stories of alleged pay-to-play arrangements at public employee pension funds, including the California Public Employees Retirement System, or CalPERS. Last August, the SEC proposed regulations that would prohibit federally registered investment advisers and certain exempt advisers from providing advisory services to a government client for two years after the adviser or certain of its executives or employees make a contribution to certain elected officials or candidates. The rule would also ban the use of third parties to solicit government business. Last month, Governor Schwarzenegger signed legislation that, among other things, requires California public employee retirement systems to adopt placement agency disclosure policies by June 30, 2010. These policies must impose a 5-year ban for violations. Because this legislation was enacted as an emergency bill, it takes effect immediately.

CalPERS adopted a placement agency policy earlier this year. However, CalPERS did not follow the notice and comment requirements of the California Administrative Procedure Act. Last month, I asked the California Office of Administrative Law for a determination that the CalPERS statement was an “underground regulation” in violation of the APA. Responding to allegations of pay-to-play, CalPERS announced recently that it is initiating a special review of the fees paid by its external managers to placement agents and their related activities.

– Broc Romanek