August 23, 2004

New 8-K Rules Effective Today!

Don’t forget to use the new 8-K form starting today! To help out, remember that we have posted a cover page of the new form, that includes all the changes from the SEC’s technical amendments adopted a few weeks ago.

Also note that the SEC has posted a corrected PDF version of the entire form on its website – if you printed out a PDF anytime before late last week, it was missing the two instructions for new Item 5.02.

And note that I got a little publicity from on Friday – now I really am somebody!

New Corporate Governance Survey

On, we have posted a new survey by Shearman & Sterling regarding the corporate governance practices of the 100 largest companies. The survey results reveal that these companies have taken a wide variety of approaches in complying with the new requirements that took effect this year.

One notable development is the frequency and degree to which a number of the companies exceed the minimum requirements of the new rules and standards either in policy or practice. For instance, almost half adopted more stringent independence requirements than required by the applicable listing standards – but in practice, independent directors comprise 75% or more of the boards of an even larger number of the surveyed companies. Similarly, many of the surveyed companies voluntarily chose to disclose publicly the name of more than one audit committee financial expert, though only required to name one.

There are several areas in which the survey results differ from expectations. It is clear that directors have been devoting more time to fulfilling their responsibilities – and although this expectation is reflected in the significant increase in the aggregate amount of annual cash retainers paid to directors, the number of board meetings increased only slightly from the previous year and less than one-third of the surveyed companies limit the number of public company boards on which their directors may sit (and at least one director at over 40% of the surveyed companies serves on five or more public company boards).