March 23, 2006

More Companies Disclosing Political Contributions

As noted in this LA Times article, Bristol-Myers Squibb and Staples recently agreed to disclose – and have their directors oversee – soft money political contributions made with corporate funds. Last year, Morgan Stanley, Johnson & Johnson, Schering-Plough, Pepsico, Coca Cola and Eli Lilly adopted similar political transparency and accountability policies. Under a typical policy, all soft money political contributions are reviewed at the Board level on an annual basis and the company posts a complete list of corporate political contributions as well as their guidelines for their political giving.

In addition, according to this press release, Amgen recently became the first company whose board endorsed a shareholder resolution calling for disclosure and board oversight of the company’s soft money giving. This development is part of a movement fostered by the Center for Political Accountability, among other groups.

Keith Bishop also notes that a bill was recently introduced in California that would require disclosure of political contributions related to California by corporations. The corporation would be required to make refunds or contributions to charities for objecting shareholders. We have posted a copy of the bill in our new “Political Contributions” Practice Area.

Overboarded Directors

Yesterday’s WSJ ran an article (not available electronically) about CEOs that serve on multiple boards that caught my eye. Back in the day before I knew better, my dream was to serve on a few boards to pass time once my kids moved out of the house. Now after serving five years on the board of a local domestic violence non-profit, I realize the serious time commitment that serving on a board really entails (putting aside the liability concerns).

So I can’t understand how a CEO of a major company could have the time to serve on more than one or two boards in addition to his/her own company. I would think even one extra board seat would be a challenge. Yet the article lists a few CEOs that serve on more than 10 boards! How do they even schedule board meetings without multiple conflicts?

ISS policy is that it generally will recommend withholding from directors who are CEOs of publicly-traded companies who serve on more than three public boards, i.e., more than two public boards other than their own board (but not recommend withholding at the CEO’s own company unless the overextension is particularly problematic or the company’s performance is poor).

And remember that the SEC only requires directors to disclose the public company boards that they sit on – directors aren’t required to disclose private company or non-profit directorships, which can be quite time-consuming too. If I sat in the shoes of a major investor, I want a CEO that spends some time with their family…

How to Handle a SEC Enforcement Inquiry Today

We have posted the transcript from the recent webcast: “How to Handle a SEC Enforcement Inquiry Today.”

Remembrance of Regina Baker

For those SEC alumni out there, I am sad to note that long-time Corp Fin Staffer Regina Baker passed away Tuesday after an extended illness. Regina was one of my favorite Staffers and I believe that anyone who worked alongside her – during her 40-year tenure – felt the same way. She was a very special person and we will all miss her. My condolences to her family and friends.