Federal Court to Rule On Challenge to Use of Former Officer's Interview Statements in Corporate Internal Investigation

by Robert N. Rapp In cases whether allegedly incriminating statements given in the course of interviews during an internal investigation conducted by the Audit Committee with the assistance of outside counsel and forensic accountants should be admitted as evidence against a person in his upcoming...

A Short Paper You Must Read About Board-Level Corporate Risk Management – NACD Advisory Council on Risk Oversight

If you are interested in the process of board oversight over corporate risk management, here is a short paper that you must read from the National Association of Corporate Directors. First, let me sincerely compliment the NACD for discussing this topic and making portions of the discussions available...

Human Behavior vs. Corporate Behavior

A few years ago -- around the time of the 2010 Citizens United decision -- I was thinking about "corporate citizenship" and corporate " speech ." These ideas don't make sense to me. Corporations are a legal construct -- something made by humans -- and yet we've given...

What Are the Essential Elements of a Corporate Compliance Program?

Can you synthesize and reconcile the world's leading laws, regulations and commentaries on the best practices an anti-bribery and anti-corruption compliance program? I recently saw one such approach by Paul McNulty and Stephen Martin of the law firm, Baker and McKenzie. They have developed what they...

Adidas Missteps Go Beyond Its Supply Chain

by Damion Rallis, Senior Research Associate Last month, an eight-story garment factory building collapsed in Bangladesh, killing more than 1,100 people. The Rana Plaza factory collapse is not only the world's worst garment-industry disaster, but also a resounding wake-up call to the hazardous...

Enough Said Yet? Say on Pay Litigation May Have Had Its Day

As I have noted in prior posts (most recently here ), plaintiffs’ lawyers have rushed to filed “say on pay” lawsuits, either after a negative vote on the advisory shareholder vote on executive compensation, or more recently before the vote occurs based on alleged deficiencies in the...

LBOs and Corporate Governance

So, this issues gets debated back and forth quite bit. On the one side are those that argue that LBOs are good corporate governance. The presence of debt and the high degree of equity ownership by managers pushes managers to improve efficiency and profitability of the firm in order to quickly pay down...

Who Picks Up the Tab When a Corporation Is Fined?

I can’t think of anybody who was satisfied with the way in which the consequences of the financial crisis of 2008 have been handled. There have been some indictments but always against very minor figures, and no prosecutions have been directed toward the major players in any of the large institutions...

U.S. Supreme High Court Won’t Review InterMune CEO’s Conviction for Federal Wire Fraud

WASHINGTON, D.C. — (Mealey’s) U.S. Supreme Court on Dec. 16 declined to review the wire fraud conviction of the former chief executive officer of biotechnology company InterMune Inc. based on a press release about a drug clinical study that federal prosecutors allege was false and misleading...

Governance Insight Alert: Freeport McMoRan Copper & Gold

Governance Insight Alert Just before the holidays, Freeport McMoRan Copper & Gold (FCX) announced that it had torn up its employment agreement with its CEO, Richard Adkerson, who would henceforth be employed “at will.” FCX is no stranger to pay controversy, having lost two of its three...

FCPA Enforcement and Difficult Choices for Corporate Directors

Aggressive FCPA enforcement in recent years has presented corporate officials with difficult choices regarding compliance and cooperation. Crafting, implementing and maintaining an effective FCPA compliance system can be time consuming and costly, particularly since its ultimate effect if a difficulty...

Governance Insight Alert: Alibaba, Weibo and 19 Additional Companies

The recently announced IPOs of Alibaba and Weibo, the Chinese service providers, shine a light on the range of global corporate governance practices. While companies’ pursuit of friendly corporate governance standards is sometimes termed a “race to the bottom,” in this case it’s...

Governance Insight Alert: Shareholder Rights Trends and 20 Company Events

Last week, on the eve of proxy and AGM season – the annual moment when companies are directly accountable to their shareholders – two important figures in the governance and investment world made noteworthy statements regarding shareholder rights and responsibilities. SEC Commissioner Daniel...

Rogue CFO - Part I: Introduction

by David Carroll Small, privately owned corporations deal with all types of challenges: competition, government regulations, recessions, rising cost of benefits for employees —the list is long. But one area that seems to be a persistent problem for small businesses is the area of fraud, in particular...

Liability Exposures of Audit Committee Chairs

One frequently asked question is whether members of a corporate board’s audit committee face heightened liability exposures. Two recent SEC enforcement actions seem to underscore that audit committee chairs do face liability exposures. Though both cases involve somewhat unusual circumstances, they...

Corporate Employment Practices and D&O Liability Exposure

I am sure most readers were as fascinated as I was by the allegations in the high profile case involving alleged hiring practices among some of the most prominent companies in Silicon Valley. The lawsuit asserted that the companies – including, for example, Apple and Google – had agreed among...

A Call for Corporate Governance Reform in Spain

In an interesting June 11, 2014 Financial Times article entitled “Spain’s Renewal Must Include Governance Improvements” ( here ), financial journalist and commentator Tony Barber identifies corporate governance issues that he believes Spanish companies have been slow to address. According...

On the Frontiers of Corporate Litigation and Liability: Inversion Transactions and a Proposed Duty to Warn

Among the developments dominating the business headlines in recent weeks have been two unrelated stories – the rising wave of so-called “inversion” transactions in which U.S. companies acquire foreign firms to avoid U.S. tax laws and the revelation of previously undisclosed problems...

Rogue CFO IV – The Company Response

by David Carroll In this series we have considered the problem of a rogue CFO, or other executive officer, who defrauds or steals from the company. The focus has been on measures that are designed to prevent the high-level fraud from occurring in the first place. But what actions should the company...

Market Basket and Minutes of Board Meetings

For those of you not from the Boston area, the whole Market Basket saga has not been a part of your summer. Around here, it's been a huge story. The ten cent version: Market Basket is a regional grocery chain that happens to be family owned. Here's the problem, the family is divided by bad blood...

The Whole World Is Watching Mexico In the Fight Against Corruption

Don Pardo died this week. While perhaps not of the public stature of Robin Williams or Lauren Bacall, whom we lost last week, his passing nonetheless was well noted in the national media. Pardo lived to the ripe old age of 96 and got his start in the public eye through the medium of radio. While perhaps...

To the NFL – Show More Than Ethics, Show Some Humanity

Just a short ten days ago I wrote about how thrilled I was that the National Football League’s (NFL) 95 th season was upon us and pro football was about to begin. But in the intervening 10 days, it is if the very football gods from Mount Olympus have arisen and unleashed their Furies on the NFL...

IPO Companies and Fee-Shifting Bylaws

One of the more interesting recent developments in the D&O liability arena has been the emergence of issues surrounding fee-shifting bylaws. As readers will recall, in May 2014, the Delaware Supreme Court in the ATP Tours case upheld the validity of a non-stock corporation’s bylaw imposing...

Many Companies’ Most Significant Regulatory Risks Are Not in Their Home Country

When Chinese regulators hit GlaxoSmithKline with a $489 million penalty last month – the largest corporate penalty ever in China – it set off alarm bells around the world. Among other things it sent out a “wake-up call for global companies that assumed that their main regulatory risk...

Bunkie Hunt and the Marketing of Compliance

Nelson Bunker ‘Bunkie’ Hunt died last week. In a state filled with oversized egos and personalities (i.e. ‘ Texas-Rich’ ), Bunkie was one of the true giants. He was a son from the first marriage of the famous Texas oilman-legend H. L. Hunt. Well over 6 feet tall, he also neared...