Below are some interesting thoughts from Vince Pisano of Troutman Sanders:
It is normal in a certificate of designation for preferred stock to provide that dividends and redemptions will be made out of funds legally available therefore. Interestingly, there is not a legal definition of “funds legally available,” despite the Delaware Chancery Court’s decision last year in SV Investment Partners v. ThoughtWorks, in part because of new confusion caused by the opinion of the Supreme Court affirming that decision on November 15, 2011.
The facts are fairly simple. The plaintiffs had purchased preferred stock of ThoughtWorks which entitled them to have their shares redeemed at their request five years from issuance, out of funds legally available therefore. Plaintiff’s position was that “legally available therefore” meant that ThoughtWorks needed to have sufficient surplus (net assets minus net liabilities and the par value of stock), with net assets to be determined, pursuant to the terms of the preferred, at the highest legally permitted value, to make the payments.
ThoughtWorks and Chancellor Laster disagreed and each concluded that funds legally available meant that you actually need to have available funds and that there be no legal restriction on their use. Legal restrictions include the surplus requirement in the Delaware GCL but also include other well known restrictions, including that payments not impair the payors’ ability to continue as a going concern and pay its debts as they become due. Whatever ThoughtWork’s statutory surplus may have been, Laster deferred to the Board’s conclusion that funds were not available to the company to pay the redemption price in any case since it neither had nor could it borrow the necessary funds and each quarter determined what funds were available and would, after payment, permit the company to pay its debts.
Chancellor Laster’s opinion is crystal clear and may even be correct. The Supreme Court, though affirming, just confused the question. They held that since Laster found that payment need not be compelled even if the plaintiff’s position were correct – that funds legally available meant surplus – it did not have to decide whether f plaintiffs were correct. The only problem is that Laster never made that ruling. He simply ruled that plaintiffs’ position was incorrect and looked instead to the “plain meaning” of the words.
If Laster or the Supreme Court had ruled that funds legally available for redemption was equivalent to surplus, judgment would have had to be entered for the plaintiffs since no one disagreed that the company had adequate statutory surplus. If you think I confuse easily, here is one of the concluding lines from the Supreme Court’s opinion: “We find that the record in this case supports the Court of Chancery’s conclusion that SVIP failed to prove that ThoughtWorks had ‘funds legally available’ (i.e.,surplus) to satisfy SVIP’s redemption demand.” This is the same court that on page one of its decision said: “We need not address SVIP’s argument that the court below erred by not equating “funds legally available” with the definition of statutory surplus under the Delaware General Corporation Law.”
One thing I do understand – when drafting terms of preferred stock – we need to stop using a term we only think we know the meaning of, be precise and consider adequate remedies.
“60 Minutes” Tackles Internal Controls
From a member: A few weeks ago, CBS’ “60 Minutes” ran a segment on the prosecution of Wall Street (or lack thereof) as well as the lack of internal controls at firms such as Countrywide and Citi, which raises questions about how auditors could have been giving “clean” unqualified opinions on the internal controls at such institutions and whether investors can rely on such reports as being credible.
Transcript: “iPads in the Boardroom: 20 Issues to Consider”
We have posted the transcript from the recent webcast: “iPads in the Boardroom: 20 Issues to Consider.”
In this podcast, Dave Lynn and Marty Dunn engage in a lively discussion of the latest developments in securities laws, corporate governance, and pop culture. Topics include:
– The SEC’s cybersecurity disclosure guidance
– Staff Legal Bulletin No. 14F
– Dave’s and Marty’s views on Springsteen
This blog by Mark Suster – of “Both Sides of the Table” fame – is a great read on how to start the new year. It doesn’t even mention the term “resolution” – but it does provide some insight into how one might live their life.
Judge Rakoff Getting Testy Over SEC-Citigroup Case
As noted in this NY Times article on Friday, “Judge Jed Rakoff of the Federal District Court in Manhattan issued a supplemental order saying that the SEC appeared to file a “materially misleading” request with the Court of Appeals for the Second Circuit earlier this week, when the commission sought an emergency halt to further proceedings in the case.”
Before then, as noted in this blog by David Smyth, the US Court of Appeals in Manhattan had agreed to the SEC’s request to delay the Citigroup settlement case until at least January 17th. This is the latest SEC settlement that Judge Rakoff has objected to – and he had set on a path of an accelerated timeline. As noted in this Bloomberg BusinessWeek article, Rakoff has now ordered the SEC and Citigroup to file with everything they file with the Second Circuit also with him. This case is getting quite nasty.
Even before all this, in this article from the Atlantic, Rakoff gave this lengthy interview to Howard Fineman in the Huffington Post. The Atlantic article does a good job of analyzing some of Judge Rakoff’s critical comments about the SEC.
Meanwhile, a Wisconsin judge has questioned whether the SEC has sufficiently clawed back money for the relevant period under a different set of circumstances, as noted in this Bloomberg article.
Our January Eminders is Posted!
We have posted the January issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!
Besides freaking out those that are now rushing to write memos about these new rules, many members asked if more adoptions are forthcoming before the end of the year given that the SEC’s Dodd-Frank implementation schedule was updated yesterday – and that still shows a lot of things planned for December.
Although anything can happen, I tend to doubt any new rulemakings will happen during the seven working days left for the year. The two that came out seriatim yesterday were non-controversial and I can’t imagine the SEC would adopt rulemakings that are more controversial – such as conflict minerals – without an open meeting. Although an open meeting is not required and like I said, anything can happen…
Oh Boy! The World’s Largest Holiday Disclaimer
It’s gonna be an annual thing. Reminding y’all of these funny disclaimers and holiday cards – see last year’s blog. And here’s a different excerpt from Intel Legal Department’s largest holiday disclaimer ever:
Please keep in mind that Some Quantum Physics Theories Suggest That When the Consumer Is Not Directly Observing This Product, It May Cease to Exist or Will Exist Only in a Vague and Undetermined State. Warning: Pregnant women, the elderly and children under 10 should avoid prolonged exposure to Happy Fun Ball. Caution: Happy Fun Ball may suddenly accelerate to dangerous speeds. Happy Fun Ball Contains a liquid core, which, if exposed due to rupture, should not be touched, inhaled, or looked at. Do not use Happy Fun Ball on concrete. Discontinue use of Happy Fun Ball if any of the following occurs: Itching Vertigo Dizziness Tingling in extremities Loss of balance or coordination Slurred speech Temporary blindness Profuse sweating Heart palpitations. If Happy Fun Ball begins to smoke, get away immediately. Seek shelter and cover head. Happy Fun Ball may stick to certain types of skin. When not in use, Happy Fun Ball should be returned to its special container and kept under refrigeration. Any resemblance to persons living or dead should be plainly apparent to them and those who know them, especially if the author has been kind enough to have provided their real names and, in some cases, their phone numbers. All events described herein actually happened, though on occasion the author has taken certain, very small, liberties with chronology, because that is his right as an American. Do not use near stairs.
The Best Holiday Video Ever…
Came across this very old classic “Hardrock, Coco, and Joe” embedded below. Can’t get enough of those “Oh-lee-o-lay-dee, o-lay-dee-I-ay’s”:
Yesterday, ISS published its promised white paper that describes the pay-for-performance methodology under which it will implement its 2012 policy updates. ISS will begin to apply this new methodology on February 1st. Here’s an excerpt from a Wachtell Lipton memo by Michael Segal, Jeannemarie O’Brien, Jeremy Goldstein and Timothy Moore (that will be posted later today):
The test is one of the primary methods by which ISS determines whether to recommend for or against a company’s management say-on-pay vote, with companies failing the test being deemed to have a “pay for performance disconnect.” In determining whether there is a “pay for performance disconnect” this proxy season, ISS will measure the degree of alignment between CEO pay and total shareholder return within the subject company’s peer group for a one- and three-year period, as well as the absolute alignment between CEO pay and the company’s TSR over a five-year period.
The white paper specifies that ISS will select 14 to 24 peer companies against which the subject company’s TSR performance and CEO pay will be measured for the one- and three-year periods ending on the last day of the month closest to the subject company’s fiscal-year end. Peer companies will be limited to those in the same two-digit GICS category as the subject company, each with annual revenues (or assets for financial companies) between 0.45x and 2.1x the subject company’s revenues (or assets) and a market capitalization between 0.2x and 5x the subject company’s market capitalization. This list of companies will then be filtered to 14 to 24 companies in the subject company’s six-digit GICS category (or four- or two-digit category if fewer than 14 companies exist in the six-digit category), with companies “closest in size” (presumably based on market capitalization or assets) selected first and larger and smaller companies added to maintain the subject company at or near the median size of the list of peer companies.
“Super-mega” non-financial companies (approximately 25 Russell 3000 companies each with greater than $50 billion in annual revenues and at least $30 billion in market capitalization) will collectively comprise a stand-alone peer group, and ISS will compare their respective one- and three-year TSR performance and CEO pay against the members of that group. In each case, annual revenues, assets and market capitalizations will be determined as of June 1 or December 1 (presumably the relevant year is the year prior to the year in which the proxy is definitively filed).
Now that the white paper has been released, companies can assess how their TSR performance and CEO pay will compare to that of their peers under ISS’ test. Companies should use the criteria set forth in the white paper to determine whether they are likely to have a “pay for performance disconnect” based on these criteria, and, if so, what actions, if any, are advisable to take in light of this analysis.
Yesterday, ISS also announced a new version of its Governance Risk Indicators (GRId 2.0), and issued information about the changes that will become effective in February. Tune in on January 24th for the always entertaining webcast – “Pat McGurn’s Forecast for 2012 Proxy Season: Wild and Woolly.”
Corp Fin Issues Disclosure Guidance for Real Estate Limited Partnerships
On Monday, Corp Fin issued the second installment of its new type of informal written guidance – “CF Disclosure Guidance: Topic No. 3 – Sales Material under Guide 5” – that explains the comments issued most frequently by the SEC Staff when they review sales material from real estate limited partnerships.
PCAOB Re-Proposes Standard on Communications with Audit Committees
Yesterday, as noted in this press release, the PCAOB re-proposed its standard on “Communications with Audit Committees.” Statements from the Board Members are posted (and the re-proposal will eventually be posted on that page too). Jim Hamilton has blogged notes from the Board meeting discussing the re-proposal.
As most of us in the securities law community know, the SEC tends to bring cases that target celebrities if they can because of their limited resources. The media boost by bringing these types of cases serve to help deter potential fraudsters – so it’s a good thing. Hence, this recent insider trading case against a former Red Sox baseball player – and this pump and dump case against “Rudy” Ruettinger, a former Notre Dame football walk-on and the subject of the movie “Rudy.” In his new “Cady Bar the Door Blog,” David Smyth of Brooks Pierce analyzes the latter in an entry entitled “Oh, Rudy….” And then today the SEC charged a former NFL player in a pumping scheme…
House Financial Services to Hold Hearing on SEC Settlement Practices
As noted in this press release, the Republican and Democratic leaders of the House Financial Services committee are planning a hearing on the SEC’s practice of settling cases without requiring defendants to admit or deny guilt. No date has been selected yet…
Mailed: November-December Issue of “The Corporate Executive”
We just mailed the November-December Issue of The Corporate Executive and it includes pieces on:
– Understanding the ISS Burn Rate Policy
– Tax Complexities in Diluted EPS Calculations
– Section 6039 Returns–Lessons Learned
– Rule 144 Gift Compliance Letters
Act Now: Get this issue for free when you try a 2012 No-Risk Trial today.
As Vanessa Schoenthaler blogged in her “100 F Street Blog,” the Regulatory Flexibility Act of 1980 requires federal agencies to review those rules that “have a significant economic impact upon a substantial number of small entities … to determine whether [they] should be continued without change, or should be amended or rescinded … [in order] to minimize any significant economic impact … [on] such small entities.” Reviews must be undertaken within ten years of a rule being adopted. Last week, the SEC published this list of 17 rules that will be reviewed over the next year.
By the way, note that this is a required regular exercise for the SEC – for example, here is its 2010 list, 2009 list and 2000 list…
Yesterday, the WSJ ran this piece entitled “Can Annual Reports Save Lives?” that is about the SEC’s conflict minerals rulemaking…
SEC Chair Discusses the Coming Beneficial Ownership Rules Overhaul
In this speech last week, SEC Chair Mary Schapiro gave us a few broad parameters of what the agency’s overhaul of the beneficial ownership reporting rules might look like (the speech also addresses proxy plumbing, proxy access, say-on-pay, etc.). Here is what she said on that topic:
Next year, we plan to begin a broad review of our beneficial ownership reporting rules. We think it’s important to modernize our rules, and we are considering whether they should be changed in light of modern investment strategies and innovative financial products.
Issues that we will consider include:
– Whether the 10-day initial filing requirement for Schedule 13D filings should be shortened;
– Whether beneficial ownership reporting should be changed with respect to the use of cash-settled equity swaps and other types of derivative instruments;
– How the presentation of information on Schedules 13D and 13G can be improved.
The Dodd-Frank Act has provided the Commission with new statutory authority to shorten the 10-day filing deadline for 13D, as well as to regulate beneficial ownership reporting based on the use of security-based swaps. And, earlier this year, the SEC received a petition for rulemaking recommending amendments to Regulation 13D-G.
The petition asks the SEC to broaden the definition of beneficial ownership to include interests held by persons who use derivative instruments. The petition also specifically requests that the time period within which initial beneficial ownership reports must be filed be shortened to one calendar day because technological advances have rendered the 10-day window obsolete.
Many feel that the 10-day window:
– Results in secret accumulation of securities;
– Results in material information being reported to the marketplace in an untimely fashion; and
– Allows 13D filers to trade ahead of market-moving information and maximize profit, perhaps at the expense of uninformed security holders and derivative counterparties.
In response, some argue that:
– Tightening the timeframe may reduce the rate of returns to large shareholders, and thereby result in decreased investments and monitoring of and engagement with management;
– There is no evidence that changes in trading technologies and practices have led to significant increases in pre-disclosure accumulations of large ownership stakes; and that
– State law developments, such as the validity of poison pills, staggered boards and control share statutes, have tilted the regulatory balance in issuers’ favor.
Our first step will likely be a concept release given the controversy surrounding some of the issues.
Shareholder Proposals: Corp Fin Supports Staff’s Exclusion of Auditor Rotation Proposal
As I blogged a few weeks back on our “Proxy Season Blog,” the Carpenters Union had asked for a reconsideration of the Corp Fin Staff’s decision to allow the exclusion of the labor fund’s auditor rotation proposal at Deere & Company. Last week, Corp Fin decided to side with its Staff and allow the exclusion and not kick it up to the Commissioners…
Wow. Back in February of this year, I passed the decade mark since I launched my maiden site, RealCorporateLawyer.com (here’s how that site looked when I first launched). As the year ends and I wind down on blogging for the holidays, I am going to toot my own horn as a lot has happened since the beginning including these milestones:
1. Created a total of 14 sites – a few of which never saw the light of day.
2. Became one of the first lawyers to blog, starting in May 2002. Now I blog daily on five blogs.
3. One of the first lawyers to conduct webcasts, starting in 2002. 175 webcasts and counting.
4. One of the first to show a conference live via video webcast, starting in 2004.
5. One of the first to post podcasts, starting in 2005. For the three years before that, I posted text transcripts of interviews. Over 400 podcasts and counting.
6. Been actively fostering a vibrant Q&A Forum dialogue with members since 2003. Across all our sites, 20,000 questions and counting.
7. Been actively benchmarking practices online since 2003, either directly on our sites or in our blogs. 125 surveys and counting.
8. Through “The Blue Justice League,” became the first lawyer – as far as I am aware of – to create an online business casual game in 2008.
I’ve also been one of the first lawyers to actively use LinkedIn (since ’06), Twitter (since ’07, using different account than my primary one now), Quora (since ’10), etc. Maybe one day I will grow up to be a “Legal Rebel“…
It looks like Congress has narrowly averted a government shutdown once again. In case final negotiations fall through, here are the SEC’s plans in the event of a shutdown. And here is the SEC’s Enforcement Director’s statement about the agency’s decision to appeal Judge Rakoff’s decision about the Citi settlement in the US Court of Appeals for the Second Circuit….
How to Get a Job
In this podcast, James Martin of DHR International explains how to tweak the board evaluation process to make them more effective, including:
– With the most pronounced legal hiring recession over the last few years in modern history, is there a trend in legal hiring?
– Are law firms hiring again and if so what are they looking for?
– Should I stay with my existing firm or is now the time to start to look for that perfect in-house position?
– Should I stay with my existing in-house position or is not the time to look for a better opportunity?
– Should I stay with my existing firm or is not the time to look for a law firm with a better platform for my practice?
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor 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:
– Watch Those Other Broker Charges
– Evidence: Effects of Prescribing Majority Voting as the Default Voting Standard
– Investors Back Majority Voting as Default Legal Standard
– Another Interview with Bob Monks
– #occupywallstreet: Live!
Yesterday, the US Chamber of Commerce released a 135-page report that proposes a reorganization of the SEC. This new set of recommendations follows up on a proposed overhaul by the Chamber back in early ’09. Authored by former SEC Secretary Jack Katz, the report does have some good ideas – the most important being more resources provided to the SEC and facilitating the ability of the SEC to hire the right people. Hat tip of the Society of Corporate Secretaries for spotting this new report.
Unfortunately, the report doesn’t tackle the most glaring problem of the SEC – that it’s forced to cater to a Congress bent on the SEC not fulfilling its mission to protect investors. Often due to business lobbyists like the Chamber influencing Congress. In my opinion, that needs to be the starting part of any reform (and came ‘oh, so close’ to happening when Dodd-Frank was being negotiated by the House and Senate)…
Even More Proxy Access Proposals: Up to 15
Here is a blog from ISS’s Ted Allen describing 2 more access proposals, one from Amalgamated Bank at HP and two from Jim McRitchie at Goldman Sachs. And then this blog from Ted describes a group of public pension funds that have filed an access proposal at Nabors Industries. Overall, investors have publicly announced 15 access resolutions for the upcoming proxy season.
D&O Insurance: “Disgorgement” Paid in SEC Settlement Not Covered
Check out this recent blog from Kevin LaCroix on his “D&O Diary Blog” where the “New York Supreme Court, Appellate Department, First Division, held that amounts Bear Stearns paid in settlement of SEC late trading and market timing allegations represented a disgorgement that is not covered under its insurance program. Because the appellate court’s decision reversed the lower court ruling that the settlement payment did not constitute a disgorgement, the case provides an interesting perspective of the question of what makes a particular payment a “disgorgement” for purposes of determining insurance policy coverage.”
In the “Davis Polk Governance Blog” recently, Ning Chiu gave us this recap: During its 2012 North American Proxy Season review, proxy advisory services firm Glass Lewis looked back to the 2011 proxy season and also gave insights as to what we can expect from them in 2012. Highlights included:
Say-on-Pay. Glass Lewis recommended against 17.5% of say-on-pay proposals in 2011. They use a proprietary model to evaluate companies and come up with “A” to “F” grades. 10% of companies that they reviewed received “F”s in 2011, with the average say-on-pay results at those companies at 73%. While, like ISS, they cite pay for performance issues as the primary reasons for causing negative recommendations, Glass Lewis also tends to cast an unusual focus on CD&A disclosure that sometimes surprises companies. According to Glass Lewis, they find it problematic when companies disclose performance measures but not the rationale for the selection or the weighting of the measures, or when they perceive inadequate discussion of a compensation committee’s exercise of discretion. Glass Lewis grades CD&A disclosure as “poor, fair and good,” and 5% of companies received “poor” citations in 2011. They mentioned Amazon as an example of a company that, in their view, both performs and has appropriate executive compensation, but has poor CD&A disclosure. In terms of evaluating company responses to prior year say-on-pay votes, Glass Lewis will examine those companies that received at least 75% negative votes for whether to recommend against either the chairman of the compensation committee or the entire committee, depending on companies’ engagement efforts with shareholders and then the level of responses.
Shareholder Proposals, Including Proxy Access. Glass Lewis data shows that there were 443 shareholder proposals in 2011, a decrease from 591 in 2012, mainly attributable to the absence of compensation proposals in light of mandatory say-on-pay. This year’s most popular proposal, given the election year, will likely be on political contributions and related topics. As for proxy access shareholder proposals, similar to ISS, Glass Lewis will review those on a case-by-case basis before making recommendations, including the percentage ownership requested and holding period requirement. Their list of factors that they will consider is much longer than the ISS policy, including an analysis of the company’s shareholder base in both percentage of ownership and type of shareholders, responsiveness of board and management to shareholders as evidenced by “progressive shareholder rights policies” such as annual elections and majority voting, and company performance and steps taken to improve bad performance.
Exclusive Forum Provisions. Glass Lewis discussed the selection of Delaware as an exclusive forum for shareholder derivative suits by 80 companies as of November, adopted either after seeking shareholder approval or by board action alone. We recently blogged about ISS policies on this matter. Like ISS, Glass Lewis generally recommends against an exclusive forum provision and a company will need to demonstrate that it has a long history of suffering from frivolous lawsuits to justify the proposal. But Glass Lewis also takes it a step further and will recommend against the chairman of the governance committee if the company adopts exclusive forum provisions either without shareholder approval or pursuant to a bundled bylaw or charter amendment (where exclusive forum is coupled with other changes). If a company adopts an exclusive forum provision before a company’s IPO, Glass Lewis will recommend against the chairman of the governance committee or the board chairman if there is not a governance committee chairman.
Talk to Us Now. Glass Lewis reiterated that they do not engage with companies during the proxy season, long a frustrating policy for companies after they receive negative Glass Lewis reports, but they are available for discussions during the off-season. At times during the proxy season, they will sponsor “proxy talks” involving a specific company and invited clients.
Next-Generation LTIPs
In this CompensationStandards.com podcast, Larry Cagney of Debevoise & Plimpton explains a new idea for an executive compensation program – Debevoise & Plimpton Retention Incentive Bonus (the “DEEP RIB”) – that takes a slice of an executive’s future short-term incentive compensation and converts it into a long-term investment in the company’s stock (essentially, it is a mandatory executive stock purchase program that pre-funds an executive’s purchase out of future bonuses, but in a way that does not implicate the personal loan provisions of SOX), including:
– What is the “DEEP RIB”?
– How does it stack up to long-term incentives in place today?
– What types of companies should consider this?
– What are the reactions from clients so far?
Take Our Survey on Pay Ratios
Yesterday, I posted this survey about pay ratios ahead of the SEC’s required rulemaking about this topic under Dodd-Frank. Please take a moment to participate – all responses are anonymous.
I have also posted this new survey on blackout periods. Please participate in that too…
In an interesting response to some recent FDIC rules, Mike Melbinger blogged recently that a major insurance broker plans had begun offering “policies that would cover financial firms against both their legal costs in the event that they underwent investigation by the FDIC and any compensation that their executives had to hand back as a result of action by the agency.” I’m not sure that the FDIC, SEC or other regulatory agency would let this fly (nor should they). Anyone else out there hear of any developments in this area? Or have thoughts on the topic? Ping me. I will maintain confidentiality as always…
New Insurance for FCPA Investigation Costs?
As this Willkie Farr memo notes: “the insurance industry has begun to develop insurance products intended to protect companies against the costs of FCPA investigations. These products serve a different purpose from that of existing D&O insurance policies. Some D&O policies do not provide any coverage for FCPA investigation costs. Even if a D&O policy does cover FCPA investigation costs, such D&O coverage is limited to costs incurred by individual company officers and directors and does not cover the company’s costs. The new FCPA insurance products, on the other hand, provide coverage for the company itself. To the extent that there is overlap between a D&O policy and an FCPA policy, the FCPA policy would provide primary coverage in the event of an FCPA investigation, preserving the D&O policy for other suits.”
The memo goes on to describe a new product from Marsh USA that “provides coverage for legal, accounting, auditing, and consulting expenses incurred as a result of an FCPA investigation, but does not cover any fines or penalties that might be imposed. Entities and individuals covered by FCPA Corporate Response include the insured company, all subsidiaries, and all persons employed by or otherwise affiliated with or acting at the direction of the company, including independent contractors and consultants. Significantly, FCPA Corporate Response also provides coverage for costs incurred as a result of investigations conducted by foreign regulators pursuant to foreign laws and regulations, such as the U.K. Bribery Act, to the extent that such laws and regulations are compatible with the anti-bribery provisions of the FCPA.”
Survey: How Prepared Are Companies for a Crisis?
This set of survey results prepared by Pillsbury and Levick Strategic Communications provides interesting insights into how prepared companies think they are for a crisis (here’s the related press release). The findings include:
– Only 60% have a formal crisis response plan
– Only 21% have a reputation management plan for social media
– 64% don’t conduct annual training drills
– The following types of crises were thought to most negatively impact the company: security failure (62%); natural disaster (51%); and blackout (40%)
