January 29, 2004

Now Here is a Nice

Check out the new proxy statement from Hewlett-Packard – which includes lots of information in response to the new SRO requirements. Walt Disney also recently filed its proxy statement (see yesterday’s NY Times for an article about the SEC’s investigation into Disney’s lack of disclosure regarding related parties).

Martha Stewart Teaches Us a Lesson

The case against Martha Stewart is being brought under atypical securities law theories. Even at this early stage, the case can teach us some lesson. Read more from an interview with Bruce Brumberg on What Compliance Lessons You Can Learn From the Martha Stewart Case.

NYSE Expected to Soon Issue More FAQs

I got some feedback on my blog yesterday about “direct” communications with directors and amended my entry slightly to indicate that officers, such as the corporate secretary, may indeed be appropriate “middlemen” between non-management directors and shareholders. Fortunately, this guessing game should soon be over as I hear rumors of 47 FAQs to be released shortly by the NYSE staff on their new governance listing standards.

As reflected in my amended entry, I have seen no written guidance saying the administration has to be by a “non-management employee.” In the SEC’s adopting release regarding shareholder/director communcations, the SEC noted that the company does not have to disclose who is handling the communications nor is a company required to describe the process. Nor does the SEC specify that the person has to be a non-management employee – instead, the SEC stated that “a company’s process for collecting and organizing security holder communications, as well as similar or related activities, need not be disclosed, provided that the company’s process is approved by a majority of the independent directors.” See the SEC’s commentary on this at footnote 118 and at footnote 59. [If you are looking for samples of what companies are disclosing about how investors can contact shareholders, we have them in our “Shareholder Access Portal”]