As long rumored, Andrew Ceresney was announced as the co-head of the SEC’s Enforcement Division yesterday. Andrew served as Chair White’s longtime lieutenant at two of her two prior jobs – Debevoise & Plimpton and US Attorney for the Southern District of New York. Having two Directors at once certainly is unusual – but as this DealBook piece notes – the arrangement could be temporary as George Canellos (elevated to Co-Director from Interim Director) could be headed back to private practice soon enough. This DealBook piece portrays low morale in the Division.
The debate over “are two leaders better than one?” is an interesting one. Some claim it’s not the greatest governance move as it can create some dysfunction (see this article). Who is ultimately accountable? What if the two leaders wind up in turf battles? It’s not hard to imagine many close calls winding up being a split decision among the two heads – who breaks the tie? And what does that do to their relationship with each other – particularly how does that impact the co-head who lost the tie but who winds up being right in hindsight? On the other hand, there are arguments that it can work well. A handful of companies do have co-CEOs…
When Congress drags George and Andrew into a hearing, will they play “good cop, bad cop”?
News Corp Settles Shareholder Derivative Lawsuit: $139 Million & Governance Reforms
Yesterday, News Corp. settled a shareholder lawsuit brought by Amalgamated Bank and the Central Laborers Pension Fund in 2011 – In re News Corp. Shareholder Litigation – stemming from claims against its board related to the out-of-control phone hacking scandal and other matters. The $139 million that News Corp. will receive – from insurance proceeds – is the largest cash settlement ever in a derivative lawsuit. The settlement also includes extensive governance reforms – including a split into two divisions, publishing and entertainment.
The settlement is subject to approval by the Delaware Court of Chancery, where the litigation had been proceeding. In addition to alleging fiduciary lapses over the hacking fiasco that embarrassed the company and led to the firing – and arrests – of numerous News Corp. executives, shareholders challenged directors over the 2011 purchase of the Shine Group from Rupert Murdoch’s daughter. Here are the terms of the settlement. Kevin LaCroix does a great job of recapping the litigation in his blog…
More on our “Proxy Season Blog”
We continue to post new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Examining Hewlett-Packard’s Proposed Proxy Access Rights
– Corp Fin Denies Disney Right to Exclude Proxy Access Proposal
– Detailed Examination of 2012 Shareholder Proposals and Proxy Contests
– SHRM Drops Controversial Proposal for Human Capital Proxy Disclosure
– A Case to Exclude the Triennial Say-on-Pay Shareholder Proposal
– Broc Romanek