November 30, 2015

Nasdaq: Changes to Shareholder Approval Rules Considered

Recently, Nasdaq solicited comment on its shareholder approval rules. It’s a broad – and general – request since the rules haven’t changed much in the 25 years since they were adopted. Nothing specific is proposed – so this is sort of like a concept release. And since these are complicated issues, the comment period runs until February 15th…

The Explosion of Governance Service Providers: Worth It?

Although corporate governance became a household name over a decade ago – in the wake of Sarbanes-Oxley – it’s only until this era of shareholder engagement emerged in the wake of mandatory say-on-pay that governance specialists have exploded upon the scene. There are a number of different types of governance specialists, starting with the small shops or solo practitioners comprised of folks that used to serve as corporate secretaries in-house. There are organizations such as CamberView that consist of those that used to work at institutional investors. There are those that are communication firms like Teneo that are filled with people that held senior management roles (but not as corporate secretary). And then there are more traditional players, law firm personnel, the Big 4 (who each have their own separate governance practice) and proxy solicitors. And of course, ISS provides those services too.

Recently, I asked a random group of folks what they thought of the bigger players in the governance services sectors and I got these responses:

– I have clients who use them – some like them a lot and some do not. It does seem to matter who you get, what your problems are and what you expect. If you don’t actually have any real problems and the CFO hired them just to make everyone feel better, that’s the least value-add.

– Investors like them – it’s easier for investors to deal with a company that has been “coached” by former investors like a CamberView.

– That’s because you know what you are doing in talking to shareholders, but a lot of people find it mystifying and they need a lot of help. Also, they can be in a position to deliver the bad news of telling the CEO: “yes, you absolutely have to let a board member speak because that’s what investors want.”

– It really shows is that proxy solicitors are missing a big opportunity to have more sophisticated services.

– They’ve become like McKinsey — no one ever loses their job for hiring them.

– They’re pricey.

– They’re often hired by the non-lawyers, CFO or boards etc. People who just want to do something. I think they sometimes clash with legal.

– They think they’re like a boutique I-bank, maybe in the activist space. It’s a crowded market.

Book Review: “Comebacks for Lawyer Jokes”

I view myself as quick-witted – but terrible at telling jokes. Here’s an illustration of that in this short video where I review the wisdom of Malcolm Kushner’s book – “Comebacks for Lawyer Jokes.” Stick around til the end for the bloopers:

Broc Romanek