August 15, 2018

Transcript: “Insider Trading Policies & Rule 10b5-1 Plans”

We have posted the transcript for our recent popular webcast: “Insider Trading Policies & Rule 10b5-1 Plans.”

Getting a “Cyber-Savvy” Board

There was a time – not that long ago! – when data breaches were a rare event, nobody had heard of Cambridge Analytica and AI was mainly a sci-fi movie concept. There was also a time when having one director with “cyber” expertise was enough to signal a board’s commitment to understanding cyber threats & opportunities.

But somewhere along the way, people began to appreciate that boards can’t rely on one “digital director” to solve all of their cybersecurity and cyberstrategy needs – doing that is the corporate-governance equivalent of this overused meme. This Spencer Stuart blog explains how the scenario often plays out with “next-gen” directors who are recruited for their tech skills:

Just because someone has worked at Facebook doesn’t mean he or she knows how to guide a 100-year-old company through a transition to e-commerce. Likewise, someone with digital marketing experience may not know the first thing about cybersecurity.

Boards need to better assess their company’s needs and the candidate’s capabilities, and prospective directors need a better understanding of what board service entails. In addition, boards should know that “next-gen directors,” broadly speaking, are very disinterested in sitting on a board where they aren’t making an impact on real issues: strategy, technology roadmap, etc.

This EY memo elaborates on how directors can use their existing skill-sets to oversee cyber issues – with help from dashboards, crisis planning exercises, third-party experts and resources that identify regular questions for management. And check out this WSJ blog for a story about Avon’s new “digital board” – an advisory group consisting of internal & external members – which will report to the board and executive committee.

The Incredible Shrinking Stock Market?

It’s been a year since we’ve blogged about the dwindling number of public companies. The trend continues – and this study examines the consequences to the general public. It says that the problem isn’t just that there’s a shrinking pie and fewer choices for “Main Street” investors – it’s that society now has less visibility into the privately-held entities that generate jobs & profits.

But for a more positive view, this essay – “Rumours of the Death of the American Public Company are Greatly Exaggerated” – says that everything’s fine. As summarized in this Cooley blog, companies still either go public (eventually) or get acquired by public companies – and the aggregate market cap of the remaining behemoths is higher than ever. The author isn’t as concerned with retail investors “having less scope to capture the upside of fledgling companies.”

Liz Dunshee