March 26, 2008

Blockbuster Joins the “Say-on-Pay” Parade

Yesterday, Blockbuster became the 5th company to agree to a non-binding vote on executive compensation – it will place this topic on the ballot starting in 2009. Here is a list of companies that have agreed to “say-on-pay.”

The PCAOB Speaks: Latest Developments and Interpretations

Given that it’s still relatively young for a regulator, the PCAOB continues to change dramatically. Join us tomorrow for our 1st annual webcast – “The PCAOB Speaks: Latest Developments and Interpretations” – regarding what is happening at the PCAOB. During this webcast, senior PCAOB Staffers will provide a wide range of practical guidance, from what are the latest issues, like internal controls for smaller companies interpretations, to whom do you call to resolve an issue, and much more. Join these experts:

– Mary Sjoquist, Special Counsel to PCAOB Board Member Bill Gradison
– Sharon Virag, Director, Technical Policy Implementation, as part of Chairman Olson’s Staff
– Kayla Gillan, Chief Administrative Officer, RiskMetrics Group and former PCAOB Board Member

During the program, I will be spending some time interviewing Kayla about her experiences as one of the founding Board Members (following up on this blog).

Delaware Supreme Court Denies Director Standing To Sue

From Travis Laster: In Schoon v. Smith, the Delaware Supreme Court held that a director who was not also a stockholder lacked standing under Delaware law to assert derivative claims on behalf of the corporation he served. The Court held that derivative standing would be recognized only where necessary “to prevent a complete failure of justice.” The Court noted that although the director was not himself a stockholder, he was affiliated with a stockholder who had the ability to sue derivatively, and thus a “complete failure of justice” would not result.

The Court’s decision leaves open the possibility that a non-stockholder director, unaffiliated with any stockholder, might be able to sue derivatively if necessary “to prevent a complete failure of justice.” The opinion contains an extensive discussion of the history and purpose of the derivative action.

More insight on this case is available from Steven Haas on the “Harvard Law Corporate Governance Blog.”

– Broc Romanek