April 26, 2005

What to Do With Over-Boarded Directors

Those of you following ISS policy changes know that ISS will now recommended withholding votes for “over-boarded” directors. Current ISS policy is that overboarded directors are defined as those directors that serve on more than 6 boards (or for CEOs, those that sit on more than 3 boards, including the CEO’s own board).

As can be expected under this new policy, a number of members have told me that ISS has indicated that one of their directors is over-boarded this year – and the choice the company then faces is either having the director roll off boards to reach the ISS policy limit or bear the burden of a recommendation that votes be withheld from the director.

If a director decides to roll off, ISS requires that this corrective action be made public somehow, as this public disclosure serves as notice to all interested parties and covers the promise to ISS with the anti-fraud protection of the federal securities laws. This can be done either through a SEC filing or press release; although here ISS prefers for the disclosure to appear in each relevant proxy statement(s) where the director is listed as a nominee (which can be accomplished by adding a tag line to the bottom of the director’s bio, similar to the language noted in the example below). ISS prefers disclosure in these proxy statements as a way to ensure that shareholders of each company have access to the information.

As an example of what this disclosure might look like, check out this Form 8-K filed by Cousins Properties filed on April 15th that states:

“Thomas D. Bell, Jr., President and Chief Executive Officer of Cousins Properties Incorporated (the “Company”), currently serves on the boards of directors of more than three publicly traded companies. He has announced that by the spring of 2006, and for so long as he is the Chief Executive Officer of the Company, he intends to serve on the boards of directors of no more than three publicly traded companies (including the Company).”

Calling All Reg FD Questions!

In connection with our webcast next Monday – “The Latest Regulation FD Practices” – please send any questions in advance to me via email at and we will try to address them during the program (you can simply hit the “Email Broc” link on the left side of this blog).

And don’t forget to cast your vote in our survey on Reg FD practices on the home page of

Looking for Venture Capital Content

According to, venture capital in the US doubled in 2004. We have created a new “Venture Capital” Practice Area. Check it out and let me know if you have any content or further ideas to bolster it! Any potential bloggers out there?