Monthly Archives: March 2005

March 2, 2005

Steps to Take: How to Avoid Director Liability

Join us tomorrow on – Thursday, March 3rd – for this important webcast – “Steps to Take: How to Avoid Director Liability After WorldCom, Enron and Disney” – during which an all-star panel will provide specific “how to” practical guidance, including examples of actions companies should consider taking now to protect their directors. Join these experts:

· John Olson, Partner, Gibson Dunn & Crutcher LLP
· Marty Lipton, Partner, Wachtell Lipton Rosen & Katz LLP
· Frank Balotti, Partner, Richards Layton & Finger LLP
· Rich Koppes, Of Counsel, Jones Day and Director of two NYSE-listed companies (Apria Healthcare Group and Valeant Pharmaceuticals International)

CEO/CFO Certification Reminder

I’ve noticed several accelerated filers who recently have filed 10-Ks without the requisite internal control language in paragraph 4 of their certifications (i.e., including a reference to internal controls). Accelerated filers were permitted to omit that paragraph until now – companies that are not accelerated filers can still omit it. For an example of what the 302 certifications should now look like, see our Sample 302 Certifications.

New Global Regulator of Auditing Standards

On Monday, the Public Interest Oversight Board (PIOB) was formed to oversee the public interest activities of the International Federation of Accountants (IFAC). This new global regulator was formed by the International Organization of Securities Commissions (IOSCO), two other international regulators (banking, insurance), the World Bank and the Financial Stability Forum.

Notably absent from the founders is the PCAOB (which oversees auditing standards in the US) – but I believe the PCAOB was asked to provide input. Unlike the PCAOB, the PIOB will not have the authority to enforce its own standards. This was the primary problem with the PCAOB’s ineffectual predecessor, the AICPA – but the PIOB would not be unable to overcome the practical obstacle of enforcing standards in jurisdictions for which it doesn’t have authority.

One of the eight members of the PIOB include Aulana Peters, former SEC Commissioner, former member of the AICPA Public Oversight Board and retired partner of Gibson Dunn.

March 1, 2005

March Eminders Now Available

Here is the March issue of our monthly email newsletter. To receive this newsletter each month by email, input your email address in this form.

Valuation of Personal Usage of Corporate Aircraft and The Jobs Act

In response to questions from many members of, we have added a new practice pointer from Stewart Lapayowker regarding the impact of the Jobs Act on airplane use. Stewart’s pointer specifically addresses:

– did the Jobs Act change the method for computing the value of the perquisite to be included in the employee’s income? and

– did the Jobs Act change the deductibility of expenses associated with the operation of the corporate aircraft for entertainment purposes and, if so, how does one compute the expense subject to the disallowance?

We have also added additional resources on airplane use to the “Airplane Use” Practice Area.

House Democrats Don’t Like Exclusion of Shareholder Access Proposals

In response to Corp Fin allowing the exclusion of three shareholder proposals that parallel proposed Rule 14a-11 – in a February 24th letter to the SEC Chairman – six Democrats, including Rep. Barney Frank (D-Mass.) and Rep. John Dingell (D-Mich.) questioned whether the SEC was backing away from its proposed shareholder access framework. According to the WSJ, the letter says: “We are writing to express our disappointment about the recent decision made by the staff. We are concerned that this decision may indicate the commission’s lack of commitment to passing a proposal that would empower shareholders by giving them the limited ability to nominate directors.”

Better Than Splitting the Baby?

On Sunday, the Washington Post reported, “SEC Chairman Donaldson handed down his decision in the most contentious issue dividing members of the Securities and Exchange Commission. No, it’s not executive compensation or the accounting treatment of stock options. It is which commissioner, Cynthia A. Glassman or Roel C. Campos, will get the only other office with the Capitol view when the agency moves into its new digs next to Union Station next month. Neither, it turns out. Donaldson decreed the space will serve as a common conference room.” Probably a little smarter than my idea to have the Commissioners share the coveted space (and here is Bloomberg’s more extensive article on the resolution).