July 22, 2016

The High-Level “Commonsense Corporate Governance Principles”

The effort by 13 prominent business leaders – including Warren Buffett & Jamie Dimon – and large institutional investors to draw up a set of “Commonsense Corporate Governance Principles” is complete. Not an easy thing to do; getting folks to agree on anything these days. Some participants in the process dropped out along the way, including Fidelity and Wellington Asset Management.

As could be expected, most of the principles are high level – and address topics that have been commonsense (and mainstream) for quite some time (although a few of them are emerging ideas, like rotating committee chairs and lead directors – and some are controversial, like limiting dual-class voting). So the real news probably is what is missing from them – as those are the items that shareholders & management seem to still disagree about.

These memos summarize the principles (also see this blog). Here’s a statement from CII that welcomes the principles – but then goes on to note they should have gone further on shareholder rights. See this DealBook piece…and then there’s this “Idiot’s Guide to Mocking ‘Common Sense’“…

SEC Amends ALJ Rules

As noted in these memos posted in our “SEC Enforcement” Practice Area, with the SCOTUS portion of the ALJs saga behind us regarding the SEC’s use of administrative law judges for its enforcement proceedings, the SEC has adopted changes to its rules of practice for administrative proceedings last week. Here’s the intro from this blog by Steve Quinlivan:

The SEC has approved a final rule amending its rules of practice for administrative proceedings. The changes make incremental improvements but fall short of what is necessary to make the proceedings more fair. Among other things, the final rules would adjust the timing of administrative proceedings and give parties additional opportunities to take depositions of witnesses.

Davis Polk’s New Podcast Series! Linda Thomsen on “Directors as SEC Enforcement Targets”

I’m very excited to report that Davis Polk has joined my “Big Legal Minds” with their own podcast series devoted to governance topics! Their series is called “Before the Board” and available on iTunes or by RSS feed. Or it can be accessed on the firm’s site – the 1st episode is a 20-minute interview conducted by Joe Hall with Linda Chatman Thomsen (now with Davis Polk & former SEC Enforcement Chief) about recent trends in SEC enforcement actions involving directors. Awesome!

Broc Romanek