Archive for the ‘Legislative & Regulatory’ Category

How Small-Cap Directors Can Surmount Challenges, Capitalize on Opportunities

March 12th, 2014 | By

While legislation—such as the Jumpstart Our Business Startups Act (JOBS Act) and Sarbanes-Oxley (SOX)—has eased some of the burdens small companies face when looking to go public, many of these companies now face the challenge of establishing effective governance structures. Limited resources and smaller staffs can lead to blurred lines between operations and oversight. Additionally, recruiting the right talent can also be difficult since small-cap companies may compete against their larger peers for talent.

Though lesser in market cap, these companies are growing in relative number. Small-cap companies compose nearly 80 percent of U.S.-listed public companies—4 out of 10 companies trade on the NYSE, Nasdaq, or NYSE MKT.

Recognizing that small-cap directors have a need for specific corporate governance resources, the National Association of Corporate Directors (NACD) developed the NACD Small-Cap Forums exclusive for small- and micro-cap company directors. The forums—held on April 10 in San Antonio and on July 17 in San Francisco—feature seasoned directors from small-cap companies and subject-matter experts on financing and capital markets and board building.

The keynote speaker is Adam Epstein, founding principal of Third Creek Advisors,  lead director of OCZ Technology Group Inc., and author of  “The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies.”

Topics to be addressed include strategy and risk, board-shareholder communications, and shareholder activism. To view the full agenda or to register, visit

The Skinny on Healthcare

October 25th, 2013 | By

In the United States, employment and health insurance are inextricably related. The panel speakers examined this hot topic and outlined issues that all directors should discuss with management. Each year, corporations spend hundreds of millions of dollars to provide healthcare to their employees. But because the healthcare picture is changing—in part due to the Affordable Care Act—what should directors be watching for and what should they be worrying about and asking management?

1. The Affordable Care Act will create uncertainty for a period of time. The main challenge for companies will be to find a way to stay focused on employee healthcare and manage employee costs while being competitive in the marketplace.

2. For companies, there is a direct correlation between healthcare economics and work productivity. Some companies are being proactive to address employee healthcare risks. They are analyzing data to identify healthcare trends and finding innovative ways to overcome the barriers to healthcare access and costs. These activities can translate to bottom-line benefits.

3. Directors should discuss with management what the company’s policy will be for employee insurance and ask whether it will move toward private exchanges. They should also discuss what actions the company is taking to significantly reduce healthcare costs, and how the company is helping employees and retirees to obtain healthcare at lower costs.

Jeffrey M. Cava
Executive Vice President, Chief Human Resources Officer, Starwood Hotels & Resorts Worldwide Inc.

Molly J. Coye
Chief Innovation Officer, UCLA Health; Director, AETNA

David Kasiarz
Senior Vice President, Global Compensation and Benefits, American Express

David L. Rosenblum
President, NACD Southern California Chapter; Vice Chair, Library Foundation of Los Angeles; Trustee, Wesleyan University

This summary provided by PricewaterhouseCoopers.

SEC Priorities in 2013 and Beyond

October 15th, 2013 | By

While the government remains shutdown, the Securities and Exchange Commission (SEC) remains open, and Chairman Mary Jo White opened the final day of the National Association of Corporate Directors Board Leadership Conference with an overview of what the commission has been focused on and where its attention will be directed in 2014.

As a former director who served on an audit committee, White understands the weight of the responsibilities placed on the shoulders of boards—particularly surrounding disclosure requirements. While the core purpose of disclosure is to provide investors with relevant information they need to make informed voting decisions, over time the list of disclosures has grown and become more specific, causing some to raise flags about disclosure becoming too intricate. “I’m not suggesting investors haven’t benefitted from this information—much, if not all, of it could be relevant and necessary, even though some insist investors don’t take advantage of it,” White said. “I am asking if investors need and are served by the detailed disclosures companies currently provide to the SEC. It can lead to info overload.”

Methods of improving disclosure are perennial topics, and White says there is still more to be done from her perspective. “But before we can move to improvements, we need to know why we have the information we have in disclosure today,” White explained, noting that the JOBS Act requires the SEC to review current disclosure requirements and consider how to modernize and simplify them for emerging growth companies. She said the staff is finalizing these rules and expects to make them public soon.

White also noted that some disclosure requirements may be past their prime. “Some requirements that were appropriate in the past may not reflect how investors use this information today,” she said, using the example of when annual reports were what investors looked to for historical closing prices and now this information is available almost immediately online.

“While much of what some term the ‘disclosure overload’ is a result of regulation, there are other sources,” White said. Due to investor demand, some companies made the decision to disclose more information than required to reduce risk of litigation claims of insufficient disclosure. “We think these additional disclosures are a good thing, but we should be careful not to have too much of a good thing,” White said.