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The Conference Board Issues Corporate Governance Handbook 2007 To Provide Practical Guidance To Directors
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| Copyright: | PR Newswire | | Source: | PR Newswire | | Wordcount: | 1239 |
NEW YORK, Aug. 6 /PRNewswire/ -- In response to continuous developments in
the realm of corporate governance, The Conference Board Governance Center has
issued a new handbook to assist boards of directors in the performance of
their duties.
The new Corporate Governance Handbook 2007: Legal Standards and Board
Practices is an up-to-date compendium organized by the variety of functions in
the director's job description, including: nominee selection and election
process, diversification of professional expertise and background, delegation
of authority to board committees, conduct of board meetings, adoption of
governance guidelines, succession planning, engagement of outside compensation
consultants, disclosure procedure and internal control oversight, strategy
design and risk governance. A final chapter discusses what issues the board
should consider to ensure appropriate D&O liability insurance coverage.
Due to the complexity of the legal environment and the pressure exercised
by multiple constituents inside and outside the company, directors face today
a number of challenging issues. Firstly, following the 2002 enactment of the
Sarbanes-Oxley Act, there have been more than twenty major SEC rulemakings
aimed at enhancing public disclosure, removing conflicts of interest, making
management more accountable, reinforcing the authority and effectiveness of
gatekeepers (outside auditors and securities analysts in particular),
strengthening the pay-for-performance equation, and improving transparency.
"The haste and complexity of some rulemaking has created a strong need for
interpretation and guidance in many areas," says Matteo Tonello, senior
research associate, Governance Center and Directors' Institute, The Conference
Board, and co-author of the report with Carolyn Kay Brancato, director,
Governance Center and Directors' Institute, The Conference Board.
"With this Handbook, we have provided directors with a unique and easily
accessible review of what their duties are if they sit on the audit committee,
the compensation committee, get involved in strategy discussions, etc. This
is the closest thing to a "best practices" guide because it is derived from
The Conference Board's empirical research and Directors' Institute programs,"
adds Brancato.
The book also highlights the influence of shareholder activism in the
boardroom, as The Conference Board Institutional Investment Report has been
documenting throughout the last decade. Institutional investors, including
large public and private pension funds and a growing number of other
investment advisers, have been taking unprecedented steps to monitor the
management of their portfolio companies. They have done so by advocating
accountability, the adoption of higher standards of business integrity, and
the expansion of shareholder rights.
"Today, certain institutional investors have more clout in the boardroom
than ever before and are in a position to promote positive enhancement of
corporate governance mechanisms in the companies of their portfolios. The 2007
proxy season speaks for itself: Investors expect board members, not
regulators, to be the leading force in corporate governance in the future. At
the same time, other newer types of activists such as hedge funds may press
for changes based on short-term investment horizons, to the possible detriment
of management continuity and long-term business growth," says Tonello.
"In these situations," concludes Brancato, "directors might be unsure of
what they should do to adequately perform their fiduciary duties. What is
necessary is a thorough board discussion of the specific circumstances the
organization is facing as well as the adoption of the practices followed by
their leading peers. This is what the Handbook delivers - in readily
accessible summary format - thanks to the contributions we received from the
influential corporate and investor members of our Governance Center and the
experience of hundreds of board members participating in our Directors'
Institute."
The Handbook is complemented by a set of practical appendices (including
samples of corporate governance principles, board committee charters, board
assessment questionnaires, guidelines for the selection of independent
compensation consultants, and a comparative table of the corporate governance
policies adopted by major shareholder groups in the United States) prepared by
or in collaboration with leading companies and advisers such as: Davis Polk &
Wardwell; FGIC Corporation; Frederic W. Cook & Co., Inc.; Intel Corporation;
KPMG's Audit Committee Institute; Microsoft Corporation; Pfizer Inc; and
PricewaterhouseCoopers. The publication of the Handbook was made possible
thanks to the additional financial sponsorship by KPMG's Audit Committee
Institute and Spencer Stuart.
Source: Corporate Governance Handbook 2007: Legal Standards and Board Practices by Matteo Tonello, LL.M., Ph.D., and Carolyn K. Brancato, Ph.D. 1405-07-RR
About The Conference Board
Non-partisan and not-for-profit, The Conference Board is one of the
world's leading business membership and research organizations. The
Conference Board produces The Consumer Confidence Index and the Leading
Economic Indicators for the U.S. and other major nations. These barometers can
have a major impact on the financial markets. The Conference Board also
produces a wide range of authoritative reports on corporate governance and
ethics, human resources and diversity, executive compensation and corporate
citizenship. Our conference and council programs bring together more than
10,000 senior executives each year to share insights and learn from each
other. Visit The Conference Board's award-winning website at
www.conference-board.org.
About the Authors
Matteo Tonello, LL.M., Ph.D., is senior research associate of The
Conference Board Governance Center. A qualified attorney in New York and
Italy, before joining The Conference Board he practiced corporate law at Davis
Polk & Wardwell. Tonello advised the Italian Commission of Study on Corporate
Transparency about the effects of the Sarbanes-Oxley Act on foreign private
issuers, and contributed to the drafting of the two final reports by the
Commission (A new securities law enacted by Italian Parliament in response to
the Parmalat scandal, in December 2005, was largely based on the Commission's
findings and related recommendations).
Tonello is the author of two books in Italian on the international
convergence of corporate governance standards and the corporate veil piercing
doctrine. For The Conference Board, he has authored a report on stock-market
short-termism and a study of corporate governance best practices in family-
controlled corporations. He has also co-directed a Working Group on ERM and
was responsible for a research project on the role of U.S. corporate boards in
risk and strategy oversight. He received a Master of Laws degree from Harvard
Law School and a J.D. from the University of Bologna. He also earned a Ph.D.
in Law from the St. Anna Graduate School of the University of Pisa (Italy) and
was a Visiting Scholar at Yale Law School in 1997.
Carolyn Kay Brancato, Ph.D., is director of The Conference Board
Governance Center and Directors' Institute and the author of two major books
on corporate governance. She has been invited to speak on global trends in
governance by leading corporate, investor and governmental organizations in
more than 20 countries.
Before joining The Conference Board, Brancato was a securities analyst for
a Wall Street brokerage firm, and later head of the Industry Analysis and
Finance Section of the Congressional Research Service, United States Congress.
In this position for nearly 10 years, she analyzed mergers and acquisitions,
leveraged buyouts and major economic trends affecting U.S. industries for the
United States Congress. She has also served as the executive director of the
Columbia Law School Institutional Investor project, the staff director for the
U.S. Competitiveness Policy Council's Subcouncil on Corporate Governance and
Financial Markets, and as chief economist for Weil Gotshal & Manges, a major
international law firm.
Brancato is a fellow of the Royal Society for the Encouragement of Arts,
Manufactures & Commerce. She earned her B.A. degree in economics from Barnard
College, Columbia University and her Ph.D. in public finance from New York
University.
SOURCE The Conference Board
CONTACT: Frank Tortorici of The Conference Board, +1-212-339-0231
This is a news service of Thomson Business Intelligence Service ©2006. This content is for your personal use only, subject to Terms and Conditions. No redistribution allowed.
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