TheCorporateCounsel.net

Several members recently have inquired as to whether Nasdaq was seeking to delist companies that had filed disclaimed internal control opinions. [A “disclaimed opinion” is an attestation that essentially provides no opinion; compared to an adverse attestation which lists one or more material weaknesses.]

Although I am uncertain as to whether Nasdaq is taking this position across the board, it does appear that it is sending delisting letters to some companies on the basis that their 10-Ks are incomplete due to disclaimed 404 opinions. In fact, one of these companies, Advanced Energy, has put out a press release indicating that it intends to fight Nasdaq over this issue through the Nasdaq’s hearing process.

Disney Dissidents Sue the Company and the Board

Roy Disney and Stanley Gold are at it again. The dissidents of Walt Disney sued the company Monday in Delaware Chancery court, alleging that the directors made false statements to shareholders about the search for a successor to CEO Michael Eisner. In light of this allegedly bad disclosure, they seek to void the election of the Disney directors, force another election and disclose the board to disclose all the details regarding how they selected a new chief executive.

As you might recall, Disney and Gold withheld their support from Disney’s board at the company’s shareholder meeting earlier this year. The lawsuit asserts they would have run an alternate slate of directors if they had known that the company and a majority of the board members “did not intend to stand by their public statements about engaging in a bona fide CEO selection process.” And the complaint outlines a pattern of action taken by the Disney board during its CEO selection process that Gold and Disney claim shows the company never seriously considered anyone but the insider that was tapped as the successor, Robert Iger. Here are the letters that Gold and Disney have written to the board over the years.

Setting aside the fact that I have never seen extensive disclosure about CEO succession – as this process is often conducted in the dark – this lawsuit is consider a longshot by experts as explained in this article for more “legal” reasons.

Learn more about CEO succession in our upcoming June 8th webcast – “Managing D&O Departures and Arrivals” – which I just lengthed by 15 minutes because it became obvious that the expert panel has so much interesting ground to cover during a prep call we held yesterday. I also recently added an expert on D&O background verification to the panel. In addition, I just posted a new survey on director recruitment and background verification – check it out!

Throw Your Name in the Hat: PCAOB’s Standing Advisory Board

It’s that time of year when the PCAOB is soliciting names for their standing advisory board. The advisory board consists of 30 members with expertise in a variety of fields, including accounting, auditing, corporate finance, corporate governance, and investing in public companies. Two years ago, the first members were selected to serve staggered two- and three-year terms (but going forward, all terms will be two-years) – the PCAOB is seeking nominations to fill the 14 slots that are now open. Self-nominations are welcome!