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The D&O Diary: C Files Enforcement Action Over Internal Controls Reporting: A Sign of Things to Come?

One of the noteworthy features of the Sarbanes-Oxley Act was the legislation’s creation of the requirement for reporting companies to provide a certification from management regarding the company’s internal controls. This requirement has not been the focus of a great deal of attention since the legislation was enacted in 2002. However if the administrative actions […]

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Governance Insight Alert: Lannett Company and 19 additional companies

A few months ago we noted the trend for companies to amend their bylaws to include “exclusive forum” provisions, which constrain shareholder lawsuits to the company’s choice of venue. These bylaws weaken the ability of shareholders to use litigation as a monitoring tool on companies – and their unilateral imposition by boards raises other governance concerns. […]

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Governance Insight Alert: Hewlett-Packard and 19 other companies

Corporate governance at Hewlett-Packard (HPQ) took a disappointing step backwards last week. Two days after the departure of Interim Chairman Ralph Whitworth for personal health reasons, the board announced that CEO Meg Whitman would assume the role of Chairman, thus recombining the CEO and Chairman roles and eliminating the role of nonexecutive, independent Chairman. This […]

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Governance Insight Alert: Banco Espirito Santo and 19 other companies

Trading in Portugal’s Banco Espirito Santo (BES) was suspended last Thursday as the bank became more deeply entangled in the mounting financial troubles facing the bank’s family-controlled holding company, Espirito Santo International (ESI). The bank has €1.18 billion in exposure to debt from ESI and other Espirito Santo family-controlled companies; the specter of default and […]

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Governance Insight Alert: Tata Motors Limited and 19 other companies

Shareholders at India’s Tata Motors Limited (NYSE:TTM, NSE: TATAMOTORS) delivered a rare rebuke to the company last Thursday, July 3, voting against remuneration provisions for three top executives, Ravindra Pisharody, Karl Slym and S Borwankar. While a majority (70 percent) of shares were voted in favor of management, support failed to reach the 75 percent […]

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Governance Insight Alert: Kansai Electric and 19 other companies

Last week marked the compressed Japanese proxy season, when the majority of companies on the Tokyo Stock Exchange held their shareholder meetings over just three days from June 25 to 27. Nuclear power was on the June 26 agenda at nine Japanese electric utilities, where shareholder proposals were presented, together with protests outside the meetings, […]

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Governance Insight Alert: American Apparel and 19 other companies

Two kinds of trouble collided last week at the formerly trendy “fast-fashion” retailer and manufacturer American Apparel (APP). Getting headlines was the ouster of APP’s Chairman and CEO Dov Charney, who faces fresh allegations of expense abuse on top of a series of earlier sexual harassment charges. Firing a Chairman/CEO who is also founder and largest shareholder is unusual enough, but even more striking […]

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Governance Insight Alert: UnitedHealth Group and 19 additional companies

As health plan premiums continue to climb, so does compensation for top executives at the largest U.S. health insurance companies. According to data from annual filings, the median actual compensation for CEOs at the top 25 health insurance companies climbed about 8 percent in 2013 to $8 million. Actual compensation is a reflection of what […]

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Governance Insight Alert: Walmart and 19 additional companies

At its June 6 annual meeting, Walmart (WMT) announced that board member Greg Penner has been appointed to the new position of Vice Chairman and as heir apparent to Chairman Rob Walton, his father-in-law. The appointment of Penner, who has served as Walmart executive as well as in roles at financial services firms, reaffirms the Walton family’s control […]

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Governance Insight Alert: Nabors Industries and 19 additional companies

There’s perhaps no more fundamental shareholder right than the ability to elect and remove directors. In the U.S., however, where boards closely control both the nomination process and access to the proxy card, the exercise of that fundamental right is severely limited. After the Dodd-Frank Act’s provision of proxy access was challenged by the business […]

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Rotman International Journal of Pension Management: Can Governance and Forensic Accounting Measures Predict Stock Returns?

Arguably, governance and forensic accounting metrics should be predictors of future stock returns. Do empirical tests confirm this view?… Article  

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Investment Executive: ESG companies have slight edge over non-socially responsible peers

Early research from New York-based GMI Ratings indicates that companies that consider environmental, social and governance (ESG) issues in their executive pay and board oversight have a slight edge over their peers who do not… Article  

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Governance Insight Alerts: Darden and 19 additional companies

When we last visited chain-restaurant operator Darden (DRI) in March, we noted how the company’s announced plans to spin off its beleaguered Red Lobster brand had prompted agitation from a pair of activist hedge funds, including a written consent solicitation to call a special meeting. At the time, the company’s response was limited to canceling […]

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Governance Insight Alert: GlencoreXstrata, and 19 additional companies

An annual meeting to watch this week is the May 20 meeting in Zug, Switzerland of commodities and mining giant GlencoreXstrata (LON:GLEN), where controversy and shareholder discontent is likely to emerge on a number of fronts. GLEN’s board is the single remaining large-cap FTSE 100 company that lacks a single female member of its board […]

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Governance Insight Alert: Reckitt Benckiser, Ocado, and 20 additional companies

Shareholders demonstrated their discontent on pay at a pair of U.K. annual meetings last week, with significant votes against pay at consumer goods giant Reckitt Benckiser and online grocer Ocado. Reckitt Benckiser is no stranger to investor opposition to its pay programs, having received more than 10 percent votes against the remuneration report in each […]

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Governance Insight Alert: Alexandria Real Estate Equities and 19 additional companies

REIT Alexandria Real Estate Equities (ARE) holds the unwanted distinction of having receiving the lowest say-on-pay support received by any U.S. company – at its 2013 annual meeting, a mere 9 percent of shares were voted in favor of its pay program. Shareholder dissent was driven by the combination of lackluster stock performance with very […]

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GMI Ratings’ Study Finds That Only Ten Percent of S&P 500 Companies Disclose Specific Sustainability Targets in Executive Compensation Plans

Energy and utility companies lead the way in tying sustainability metrics to executive compensation, while telecommunications, technology and cyclical consumer goods and services companies trail behind  April 30, 2014, New York, NY – GMI Ratings, the leading provider of research, data and analytics on environmental, social, governance (ESG) and forensic accounting risks affecting the performance […]

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Governance Insight Alert: Allergan and 20 additional companies

Last week’s unsolicited $45 billion takeover bid for Allergan from Valeant Pharmaceutical and Bill Ackman’s Pershing Square Capital  offers observers of M&A both familiar and new stories. The familiar M&A story played out quickly: the Allergan board instituted a poison pill preventing Ackman from accumulating more shares. For now, this remains a friendly hostile takeover, […]

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GMI Ratings’ Financial Distress Risk Model Delivers Excellent Results

GMI Ratings’ Financial Distress Risk Model is designed to predict bankruptcies and identify companies in severe financial distress.  The statistics presented in this report are based on a review of U.S. bankruptcy filings from the beginning of January 2010 to February 2014, a period entirely outside of the data used to build and validate the […]

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Governance Insight Alert: European wrap-up

Broad-ranging ESG initiatives in Europe have taken significant steps forward in recent weeks, with the European Parliament approving major legislation regarding companies’ audit and non-financial reporting practices, and the European Commission proposing significant reforms under the Shareholder Rights Directive affecting both companies and investors. This month the European Parliament approved rules regarding the role of […]

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