For TheCorporateCounsel.net members, we have posted the transcript from our “50 Nuggets in 50 Minutes II” webcast featuring Alan Dye and myself.
Categorical Standards for Director Independence
As discussed during the webcast, the topic for which I currently am getting the most questions involve categorical standards for director independence. Under new Section 303A.02(a) from the NYSE Listed Company Manual, listed companies must disclose that each independent director has no material relationships with the company – and the basis for any determination regarding any immaterial relationships. Alternatively, companies can disclose that they have adopted categorical standards to assist them in making independence determinations and make a general disclosure that the independent directors satisfy them.
Even though the new NYSE standards are not technically applicable yet, some of the NYSE companies that recently have filed proxy statements have addressed director independence determinations in their disclosure – and I have compiled these samples in “Determination of Director Independence” in our “Disclosure Analysis & Samples” Practice Area.
These samples also include Nasdaq companies, who must simply identify which directors are independent under Rule 4200 (this rule technically is applicable to these proxy statements – as the NYSE and Nasdaq have split as to effective dates of its new standards).