TheCorporateCounsel.net

February 14, 2014

AOL CEO’s “Distressed Babies” Snafu: What Is The Board’s Role?

Maybe because AOL is close to home, but I have been fascinated by AOL CEO’s Tim Armstrong’s insensitive explanation for a change to the company’s 401(k) matching contributions that has dropped him into hot water. Probably “incensed” is a better term – but I also am fascinated because I wonder what AOL’s directors are thinking and doing. They themselves must be getting asked by loved ones and colleagues about this miscalculation because it is a media – and social media – hailstorm.

Here’s a 4-minute video that I put together on what the board might be thinking. It addresses these three issues:

1. When (& Should) Board Discuss?

At what point does a CEO’s communication snafu reach:

– Emergency board meeting threshold
– Regular board meeting threshold
– What can a board do anyways (besides dismissal)?

2. Should Board Care About the Media?

To what extent should media coverage impact board’s action:

– Should board obtain all news items?
– Should board receive social media summaries?
– Can board receive social media summaries?

3. Should Board Care About Employee Morale?

– To what extent should employee morale impact board’s action:
– Should board distinguish between 401(k) cut & snafu?
– How can board gauge employee reaction?
– Should it?

ISS: Request for Additional Time to Comment on Long-Term Policies

With ISS’ comment period expiring today for its recent set of proposals to change its long range policies, some are requesting additional time to comment (such as the Society of Corporate Secretaries in this letter; the letter also notes the Society doesn’t like per se director tenure periods). I agree that a three week comment period is short for something so important. And I also wonder why ISS offered this proposals – as well as changes to QuickScore – in the very heart of proxy season. People are very busy…

Private M&A Brokers: SEC Provides Broker-Dealer Relief

On the DealLawyers.com Blog last week, I blogged that – in a significant departure from prior guidance, the SEC’s Division of Trading and Markets issued a no-action letter – entitled “M&A Brokers” – that permits a person giving advice on M&A deals to receive transaction-based compensation under certain conditions without having to register as a broker-dealer. Note that the no-action letter is subject to numerous conditions, some of which may limit its utility, including the limitation that it only relates to the sale of privately held companies and that the M&A broker may not directly or indirectly through its affiliates provide financing for an M&A transaction.

Here’s some analysis from Keith Bishop and many other memos posted on DealLawyers.com…

– Broc Romanek