The reasons are interrelated. This course introduces contemporary and practical theories regarding mental processes and applicable uses for this information. But the society pages hold a clue: Foreign language semester II. Should the BOD motto be "Go along and get along or get out before we throw you out"?
Emphasizes the concept of mind, body, and spirit as necessary components of total well-being; principles of preventive health; and self-responsibility for personal health behaviors.
This course introduces students to practices and skills that are commonly used in community health and preventive health services. These include health screening skills and skills for communicating and interpreting screening results. The course offers hands-on practice of these skills. Database Management in Community and Public Health.
This course will focus on practical issues in database management. Students will learn how to perform basic query and reporting operations, migrate data between various file formats, share data using cloud data management systems such as Dropbox, prepare data for statistical analysis, conduct statistical analyses common in community and public health, perform data quality control and assurance procedures and develop formal documents for reporting outcomes.
Survey of Drugs and Health. Study of the use and abuse of drugs and other substances. Examines addiction, dependence, tolerance, motivation for use, and effects of substance abuse on health and society. Survey of Human Nutrition. An overview approach to understanding the principles of nutrition and their effect on health and fitness. Emphasis on major nutritional issues throughout the human life cycle; self-evaluation of diet and fitness habits.
Survey of Human Sexuality. A study examining the breadth of human sexuality, including psychosocial, cultural and physical aspects, and its impact on our lives. Principles of Weight Management. An in-depth study of the field of prevention and management of obesity.
This course provides practical application of nutritional, psychological, and physical activity principles that help individuals manage their own weight and is suitable for students in health, kinesiology, psychology, biology, counseling, or others.
A noncompetitive, monitored activity component is required. Physical Activity and Health. The course provides a survey of the health-related effects and social-cultural and behavioral determinants of physical activity and exercise. Theories of Health Behavior. Designed to provide an overview of health behavior theories, program planning models and multi-level interventions typically used in public health.
Each level of the socio-ecological model will be discussed including individual, interpersonal, organization, community and policy. Directed field experience is required.
Formerly titled "Foundations of Health Theory. Study of community health problems and the function and organization of public, private, and voluntary health agencies, application of health theories and models and program planning methods. Offered Fall Semester only. Organization, administration, and supervision of health programs in the community, school, business, or industry setting.
Application of health theories, models and program planning methods is required. Application of theories and models for program development, implementation and evaluation. Health majors and minors only. Physical, social, and psychological development throughout the lifespan. Implications for health professionals at all stages of development prenatal to death are addressed. Practical application of techniques for shaping healthier emotional behavior; emphasis on personality, stress management, and fulfilling relationships.
Child and Adolescent Health Promotion. Designed for students who are interested in promoting the health of youth, as well as those students pursuing academic training in education and community health. The primary goal of this course is to improve the health literacy of teachers and health promotion specialists through understanding and application of evidence-based child and adolescent health promotion concepts.
Program Planning and Evaluation. This course provides students with a basic understanding of planning, implementing, and evaluating health promotion programs in a variety of settings, including worksite, healthcare, and community and at a various levels individual, organization, community, policy.
Human Disease and Epidemiology. An in-depth look at the etiology, prevention, and treatment of chronic and contagious diseases afflicting humans and epidemiological methods. An in-depth study of human sexuality, including psychosocial, cultural and physical aspects. An in-depth examination of the principles of nutrition and their effects on health and fitness.
Emphasis on critical thinking and translation of nutritional knowledge to real-world settings. Includes self-evaluation of diet and fitness habits. Application of health theories and models for program development, implementation, and evaluation in nutritional context.
Environmental Health and Safety. Considers applicable factors of ecology, including problems related to water, waste, pesticides, foods, radiation, population, and other aspects of the total ecosystem, as well as personal and occupational safety within these parameters. Capstone for Community Health and Preventive Services. This course aids students in synthesizing their classroom and internship experiences to reinforce critical skills and key responsibilities for Health Educators.
This course will provide students with an overview of resources, skills, and recommendations regarding their professional development. Student is required to have a cumulative grade point average of 2. The opportunity for work experience in a private or public health-related agency. Opportunities are developed in consultation with the faculty advisor and on-site coordinator.
Special Studies in Health. Organized course offering the opportunity for specialized study in an area of health not available as part of the regular course offerings. Enrollment limited to candidates for honors in the Department of Health and Kinesiology during the last two semesters; consent of the Honors College.
Supervised research and preparation of an honors thesis. Practice in the techniques of individual physical activities. Sections focus on particular sports or fitness activities as indicated in the Schedule of Classes. Freshman Topics in Kinesiology.
This course is designed to help students acquire the tools and life skills necessary to succeed in college and the future. The curriculum is an overview of topics including: Practice in the techniques of team sports. Sections focus on particular sports as indicated in the Schedule of Classes. Generally offered Fall, Spring. Computer Applications in Kinesiology and Health. Application of computer and multimedia technology in Kinesiology and Health disciplines.
Lifetime Fitness Activity Instruction. Practice in delivering instructions in lifetime fitness activities for adults. These activities include cycling, hiking, jogging, golf, badminton and tennis. Fitness and Wellness Concepts. This course is designed to provide students with developmentally appropriate knowledge and skills in health and fitness.
The course will address health-related issues in personal, interpersonal, and community settings. An individual fitness requirement may be required. This course examines the word roots, prefixes, suffixes and terms used in medicine and clinical exercise. A major focus will be on the terms used in the major organ systems of the body, diseases, injuries, and medical treatments. First Aid and CPR. A study of basic first aid procedures, cardiopulmonary resuscitation CPR , automated external defibrillation AED , and blood borne pathogens.
Upon successful completion of this course students will be able to sit for national certification in first aid and CPR. Study of the history and philosophy of physical activity, and an introduction to anatomy, physiology, biomechanics, motor behavior, and psychology of exercise and sport. This course will also introduce careers in kinesiology and the requirements for graduation with a degree in kinesiology.
Formerly titled "Cultural and Scientific Foundations of Kinesiology. Outdoor Activities and Innovative Games. Practice in delivering instructions of selected outdoor activities hiking, orienteering, biking and innovative games for all age groups. Weekend class field trips required. Laboratory fee will be assessed. Formerly titled "Outdoor Activities and Lifetime Sports. Introduction to concepts and skills that will prepare the student to become an effective leader of physical fitness, sport and health, and physical education programs.
Skill Analysis in Physical Activity: Practice in delivering developmentally appropriate physical activity instruction in a variety of selected individual activities such as golf, bowling, archery, and track and field. This course will discuss the principles and philosophies of coaching sports.
Domains will remain consistent with that of the National Standards for Sport Coaches and will focus on philosophy and ethics, safety and injury prevention, physical conditioning, growth and development, teaching and communication, sport skills and tactics, organization and administration, and evaluation.
Practice in delivering developmentally appropriate physical activity instruction in a variety of selected team sports, such as football, volleyball, and team handball. Practice in delivering developmentally appropriate physical activity instruction in a variety of selected dual sports, such as badminton, tennis and handball. Practice in delivering a variety of appropriate aerobic, musculoskeletal fitness, and wellness activities for children and adults.
Formerly titled "Aerobic Fitness Instruction. Provide instruction in facilitating the foundational movement skills which provide the basis for all movement capacities and their application in specialized activities geared to the early childhood through adolescent stages.
Formerly titled "Rhythmical Activities and Dance. Instructional techniques applied to health related fitness using resistance training, balance, flexibility, and musculoskeletal conditioning activities. A study of motor, physical, and neuromuscular development across the human life span. Effects of social, cognitive, growth and maturation, and aging factors on motor development will be addressed. Directed field experience may be required.
Scientific Principles of Physical Activity. A study of the physiological and biomechanical principles of physical activity and human movement. Emphasis is placed on acute responses and chronic adaptations of the musculoskeletal and cardiorespiratory systems to physical activity. Care and Prevention of Athletic Injuries. Prevention and care of athletic injuries.
A study of training and conditioning for the team and individual. Techniques and procedures for emergencies: Organization of the training room facility. Formerly titled "Athletic Injuries and Training Procedures. Anatomy and Physiology for Kinesiology. A detailed study of anatomy and physiology of the human cardiorespiratory, musculoskeletal and nervous systems.
Emphasis will be placed on the anatomical factors that cause human movement and application to common exercise-related injuries. Anatomy laboratory hours may be required. Quantitative and qualitative evaluation of human movement through analysis of video and biomechanical data. Application of Biomechanics to sports performance enhancement and injury prevention.
The study of the human body in sports motion and sport objects in motion. The application of mechanical principles, kinematics, and kinetics. Biomechanics laboratory hours are required. Development, organization, and delivery of appropriate physical activities for children through the adolescent stage. Some fieldwork observation experiences may be required. Laboratory exercises demonstrating principles of exercise physiology. Topics include metabolic, cardiorespiratory, and neuromuscular responses to physical activity and exercise.
A study of the adaptation and effects of the body to physiological stress. Emphasis will be placed on the physiology of training, metabolism and work capacity, and electrocardiography. Health Related Fitness Assessment Laboratory. This course includes laboratory and clinical measurements of aerobic capacity, balance, body composition, electrocardiography, flexibility, muscular endurance, muscular strength, and pulmonary function.
Students are required to demonstrate competence in administering health related physical fitness. Health Related Fitness Assessment. A study of the principles and concepts of fitness measurement. Topics include graded exercise testing, electrocardiography, assessment of aerobic capacity, body composition, flexibility, muscular strength, muscular endurance, and pulmonary function.
Fitness Programming and Exercise Prescription. A study and application of principles and concepts related to designing exercise programs.
The target population includes apparently healthy adults and individuals with special considerations, including cardiovascular disease, pulmonary disease, obesity, diabetes, pregnancy, and children. A detailed examination of the nervous, muscular, and skeletal systems. This course focuses on bones. The etiology and pathophysiology of common sport and exercise related injuries to the musculoskeleton will be introduced.
Laboratory examination of the skeletal system may be required. An investigation of psychological processes and behaviors related to participation in exercise and physical activities. Psychological effects of exercise, motives for fitness, exercise adherence, and fitness counseling.
This course is designed to introduce students to a variety of therapeutic modalities currently used in clinical rehabilitation. Application of test, measurement, and evaluation theory. Emphasis is on proper selection and administration of tests, appropriate evaluation of test results using basic statistical procedures, and assignment of grades. Introduction to Sport Psychology. This course involves an in-depth study of the psychological factors that underlie and support human behavior and performance, particularly as it relates to sports.
This course introduces contemporary and practical theories regarding mental processes and applicable uses for this information. Formerly titled "Psychosocial Aspects of Exercise and Sport. Evaluation of Athletic Injuries. This course deals in depth with issues related to athletic training, including assessment of injuries, and proper taping and wrapping techniques.
Formerly titled "Advanced Athletic Training. Teaching Secondary Physical Education. Examination of current trends, issues, and pedagogical approaches to the teaching and learning of physical education in the secondary school curriculum.
Contemporary programming, behavior management strategies, and community outreach activities will be emphasized. Weekly fieldwork in the public schools at the secondary school level is required. Restricted course; advisor code required for registration. In-depth study of exercise physiology, emphasizing application of physiological principles of training for physical fitness and sport performance, graded exercise testing, and professional issues. This course includes introduction to research in exercise physiology.
This course examines various therapeutic exercises and programs used in the treatment and rehabilitation of exercise-related injuries. This course will address the basic concepts of nutrition from a scientific basis, applying these concepts to understanding of food nutritional labeling, dietary recommendations for health and fitness, as well as exercise or sport performance enhancement.
This course will examine the essential knowledge, skills, and abilities necessary for exercise physiology practiced in clinical settings. Topics will include diseases of the cardiovascular, pulmonary, and metabolic systems.
Skills in administering graded exercise testing with ECG monitoring, pulmonary function testing, and screening for metabolic disease will be emphasized in laboratory settings. Additionally, exercise prescription and programming will be studied for persons with chronic disease. Teaching Elementary Physical Education. Examination of current trends, issues, and pedagogical approaches to teaching and facilitating learning of physical education in the elementary school curriculum. Contemporary programming, problem solving, and community outreach activities will be emphasized.
Weekly fieldwork in the public schools at the elementary school level is required. Study of concepts of movement awareness and the elements of movement that are the basis of all movement capacities. Application of these concepts to the learning of motor skills will be included. Laboratory exercises demonstrating the principles of motor learning and motor control.
Functional applications of motor control and learning theory in skill instruction and sports performance. Motor learning laboratory hours are required. Theory of coaching relevant to athletics. Emphasis on organization and content involved in coaching sports. The sport content may vary in different semesters between baseball, basketball, football, soccer, softball, and volleyball.
Course may be repeated for credit. A developmental and functional approach to the study of disabilities in physical activity. Legislation, pathologies, and adaptation principles. Field experience is required throughout the course. Clinical Applications of Athletic Injuries.
Consent of instructor and admission to the Athletic Training concentration or Kinesiology and Health Science concentration. This course provides practical applications in prevention, diagnosis, treatment, and rehabilitation of athletic injuries, and includes hours of supervised field, laboratory and clinical experiences in athletic training. May be repeated for credit for a maximum of 6 semester credit hours.
Practicum in Kinesiology Research. Admission to Kinesiology major and consent of Instructor. This course provides supervised research experience in various areas of kinesiology.
May be repeated for credit, but not more than 6 semester credit hours will apply to a bachelor's degree. Supervised internship with appropriate agency in the field of kinesiology.
First Aid and CPR certification and consent of instructor. Supervised coaching practicum with appropriate agency in the field of kinesiology. Formerly titled "Practicum in Kinesiology. Organized course offering the opportunity for specialized study not normally or not often available as part of the regular course offerings. Students will learn and apply counseling techniques to promote the adoption of health-promoting lifestyle behaviors in diverse populations. Basic counseling theories will be introduced.
Capstone course and seminar for students pursuing training and certification in exercise science, and preparation for graduate studies.
Introduction to Nutritional Sciences. Basic concepts related to the classification and functions of nutrients; the process of digestion, absorption, transport, utilization, and storage of nutrients in humans and the interaction between diet and health.
Applied Food Science Practicum. The application of concepts related to the chemical, physical, sensory, and nutritional properties of food in menu planning, food preparation, and recipe modification.
Introduction to Nutrition and Dietetics Careers. Nutrition and Dietetics majors only. General overview of nutrition and dietetics as a profession, including career opportunities, scope of practice, credentialing, code of ethics, and collaboration with other disciplines.
Self-directed modules on medical terminology, word roots, prefixes and suffixes will be integrated into the course content. Practicum related to the procurement, preparation, and delivery of food in large foodservice operations.
Concepts related to the chemical, physical, sensory, and nutritional properties of food in menu planning, food preparation, and recipe modification. Nutrition and Health Assessment. Methods, tools, and interpretation of data in assessing the nutritional status of individuals including dietary, anthropometric, biochemical, and clinical assessment, as well as other measurements of health in individuals and the community.
Nutrition Counseling and Education. Discussion of theories of learning and behavior modification, models and techniques, communication skills, evaluation methods, and cultural competence in nutrition counseling and education; and application of concepts to facilitate behavioral change.
Nutrition in the Life Span. Nutritional needs during various stages of the lifecycle as influenced by physiologic, cultural, and environmental factors. Production and Foodservice System Management I. Principles related to the menu planning, food sanitation and safety, procurement, production, marketing, and materials management in foodservice operations Generally offered: Advanced discussion of nutrient structure, function and interaction, metabolic pathways, and regulation and integration of metabolism.
Application of learned strategies in meaningful community service through collaborative tasks performed at various community programs. Service learning activities are aimed at enriching the life experiences of students through civic responsibility and community outreach. Nutrition Care Process Practicum.
A problem-based approach to dietetics practice using case simulations and studies; application of basic nutritional assessment skills, nutritional diagnosis, intervention, and monitoring in different settings; practice skills in counseling and nutrition education.
Theories and principles related to the foodservice, systems management including leadership, decision-making, human resources, and financial management of operations. Medical Nutrition Therapy I. Pathophysiology and the application of the nutritional care process in the treatment of simple human diseases and conditions, part 1. Nutrition-related issues in public health, various community resources, agencies, and programs involved in health promotion and disease prevention.
Nutrition in Disease Prevention and Health Promotion. Medical Nutrition Therapy II. Continuation of Advanced Medical Nutrition I; and review of the pathophysiology and the application of the nutritional care process in the treatment of more complex human disease and conditions. Current Issues in Nutrition. In-depth discussion and analysis of emerging trends, concepts, and controversies in nutritional sciences, including application of evidence-based principles in the discussion.
Independent Study in Nutrition and Dietetics. An exploration of topics of interest to the student in Nutrition and Dietetics. Students work under the close supervision of a faculty member to conduct research, intense study, or a project related to the selected topic.
Introduction to Public Health. Introduces students to the discipline of public health. It will cover a variety of disciplines to the basic tenets of public health. The course will also cover the role of public health in a global society.
Data Management in Public Health. Study of the skills required to design, organize and implement a data management system in public health applications. It will cover an introduction to data preparation for statistical analysis, development of organizational tools, methods of data acquisition, data collection form design, principles of database development, quality control of data, and data security. Provides the student with basic knowledge about epidemiological applications in a behavioral area.
It covers behavioral and social environmental issues related to disease etiology, premature morbidity and mortality patterns. Provides an overview of the epidemiology of specific health-related behaviors, the relationships between these behaviors and health outcomes, and available evidence for the effectiveness and appropriateness of various approaches to modification of these behaviors.
Utilizes case discussion seminars to appraise the investigative methods and research designs for studying disease outbreaks and new epidemics.
Thain would have the power to veto other prospective chairmen. Elson, who teaches corporate governance at the University of Delaware's business school, said. To Sue or Not to Sue? Did the "handpicked" BOD later ratify Reed's impulsive act by its silence?
Thain went on to become CEO of Merrill Lynch and, when the bumbling herd stumbled over a cliff into the arms of Bank of America, was terminated. A former telecom executive, he was pushed out of Covad Communication Group shortly after Carly Fiorina named him to the board.
At the time, his allegiance seemed inclined far too much to Fiorina, rather than to HP's investors. If she left tomorrow, I'd resign tomorrow. Some BODs may be so beholden to the CEO that regulators have to put a gun to their collective heads to get them to do what is in Shareholders' best interests.
In a securities filing yesterday, Fannie said its financial statements from through the third quarter 'no longer should be relied upon' because they were prepared with practices that didn't comply with generally accepted accounting principles. Raines , who had carefully cultivated personal relationships with the directors over many years … taking them to dinner at a Four Seasons hotel in Washington on the eve of board meetings.
The directors came to no conclusions about Mr. Raines's fate Thursday, but agreed to hold a formal meeting on Sunday. Directors … still didn't come to a conclusion on whether to force Mr. One idea advanced by Mr. Raines, according to a person close to the discussions, was for him to announce a retirement effective at some later date, which would have created the appearance that he wasn't to blame for the accounting fiasco. A final decision didn't come until Tuesday, when Mr.
Fannie was subsequently placed into a conservatorship where it was forbidden to continue to make political contributions and to conduct lobbying efforts. If you dissent on this board, we'll nail you. If company officials think I violated the law, they can call the cops. Spy on Him ". The report, which relied in part on private telephone records, fingered George Keyworth , a longtime director and former science adviser to President Reagan, as the source of many of the leaks about board deliberations.
A boardroom showdown ensued, during which the board voted to ask Mr. Keyworth to resign, and he refused, saying he was elected by the shareholders. Venture capitalist Tom Perkins , a friend of Mr. Keyworth, quit the board on the spot in anger. Keyworth will not be nominated for re-election to the board at its annual meeting next March.
Dunn said she regularly informed the board of the investigation, but provided few details, at the investigators' request. Keyworth to leave, Mr. Dunn, saying, 'Pattie, you betrayed me. You and I had an agreement we would handle this offline without disclosing the name of the leaker. Dunn says she never had such an agreement.
Counsel was explicit the matter needed to go before the full board,' she says. Perkins rose from his seat, slammed his briefcase shut, and said, 'I quit and I'm leaving. The law requires that when a director resigns, the company has to disclose whether it was the result of a fundamental disagreement.
I don't want people to speculate about my health. Perkins had no disagreement with the company, only with Ms. Therefore they decided they had no obligation to file details with the SEC. Instead, the board issued a statement on May 19 that simply said Mr. Perkins had resigned, effective immediately. Perkins was concerned with the way his resignation was portrayed by the company, however, and subsequently contacted the SEC with his concerns, according to people familiar with the situation.
Perkins has also been critical of the investigation, which he suggested involved illegal surveillance. Board members acknowledge some discomfort with the methods used by the private investigator who obtained the phone records, but H-P says it was assured by the investigators that the methods were legal. Assuming that the BOD provided any hearing of the allegations against George, he could have defended against his removal on the ground that the BOD had acted with "unclean hands" in acquiring its alleged proof.
What is the value of the private investigator's assurances? Would anyone expect an admission of illegal activities? The other message is that Directors are under pressure to conform and keep quiet, or else…. Or, does it mean that he regrets abandoning his friend and fellow Director in in his time of need? Perkins sent a letter to Hewlett-Packard wherein he set forth his version of the events surrounding his resignation, his follow-up efforts and various allegations of misconduct.
Pretexting, or posing as a person in order to obtain private phone or other information about them, is illegal in California. He added that H-P didn't know pretexting would be involved. H-P declined to disclose the name of the private-investigation firm it retained or the 'pretexting' firm that firm employed as a subcontractor.
Keyworth for another term as director. The company is scheduled to hold its next board elections in March The law firm had concluded that the methods used were legal, these board members say. But the law firm says it made no such conclusion on its own; it simply reported that the private-investigation firm involved and that firm's lawyers claimed their methods were legal.
Larry Sonsini, the attorney for H-P's board, yesterday declined to comment. When does a high-powered law firm reasonably rely, in matter crucial to its client, upon the favorable legal opinion of other and, likely, lesser powered law firm of their client's investigator? For what has the BOD paid? A major issue remains whether and to what extent there is a semblance of due process in the board room before the death penalty is imposed upon a member who is invited, but refuses, to resign.
Sonsini's firm has grown strained. Perkins of discussing internal Hewlett-Packard deliberations with others last month. The lawyer went on to demand that he name those he spoke to and what documents he gave them. Perkins's response was just as rough. Dinh … accused the law firm of conflicts of interest.
He accused the company of 'sanitizing' the minutes of the board meeting in which Mr. He told the company that Mr. Perkins was a victim of possible fraud, identity theft and misappropriation of personal records. Sometimes, CEOs make consensual Directors disappear. Hollinger International … did that late last year.
Shareholders like president of hedge fund Providence Capital, Herbert Denton … wanted three of the firms' directors to step down. ACS Chairman Darwin Deason , a flamboyant entrepreneur who built the company, teamed up with Cerberus Capital Management LP during the buyout frenzy earlier this year to take the company private.
But such a bid never materialized, and earlier this week Cerberus pulled its offer, citing turmoil in credit markets. ACS management along with some of its biggest shareholders, including Oppenheimer Funds, blamed the independent directors for allowing the deal to slip out of their hands -- by refusing to set a vote on the bid before pursuing alternatives.
The directors say they had a duty to look for other potential bidders, given that Cerberus's proposed deal included the participation of ACS's chief insider: The dispute is all the more extraordinary given the close, even cozy, relations Mr. Deason once enjoyed with a number of the independent directors -- Robert B. Livingston Kosberg, Frank A. Several of them enjoyed business or personal ties with Mr. Deason in past years.
The confrontation began Tuesday during a six-hour board meeting, when Mr. Deason demanded the directors resign immediately. He threatened to nominate a new slate of independent directors for election at the next shareholder meeting, in May, if they refused He also said he would issue a news release accusing them of neglecting their duties if they didn't comply by yesterday, these people said.
The directors responded in their own sharply worded letter: Late yesterday, the independent directors filed a lawsuit against Mr. Deason and other ACS executives in Delaware Chancery Court asking for a declaratory judgment that they haven't breached their fiduciary duties. The resignations came during a closed-door session in which the bloc sought to replace Chief Executive Alan Armstrong , who they felt was ill-suited to lead an independent Williams as it sets out a new course, the people said.
Chairman Frank MacInnis was among those who resigned, as were a pair of activist hedge-fund investors, Keith Meister and Eric Mandelblatt , who joined the member board following a public campaign in , the people said. All three had championed the merger with Energy Transfer, which Mr. Armstrong had opposed and continued to oppose even after it was agreed. The discussion turned to whether Mr. Armstrong was the best person to remain at the helm. The directors not including Mr. Armstrong were split evenly, with six supporting Mr.
Armstrong and six opposed. MacInnis, who had been Williams ' s chairman since , was opposed to Mr. Armstrong remaining as CEO, but resigned largely for personal reasons…. All three had been supportive of the merger. Did the newly departed leave with some benefits?
Does one hand wash the other? Do CEOs and Directors say to one another, in substance, "I won't tell on you to Shareholders , if you don't tell on me"? A conflict of interests arises when Directors set their own compensation, e.
It is just another conflict of interest for which there is no real accountability. Corporate governance watchdogs fret that CEOs use lucrative pay packages to co-opt board members.
Still, that's not bad for a part-time job that requires attending a handful of meetings a year. And because boards seem reluctant to rein in compensation, some critics conclude that the system is irreparably broken. Sinegal of Costco Wholesale pay package seems a throwback to another era, especially when compared with the lavish compensation of Henry R. Sinegal's compensation is skinny, then corpulent is the word that comes to mind when considering the pay bestowed on Mr. Silverman, the chairman and chief executive of Cendant, the travel, real estate and direct marketing concern.
The fear, of course, is that corporate executives, who have oodles to gain from mergers, have too much say about the terms, structure and consummation of the transactions.
When management is at the controls, as often seems to be the case, directors are asked mostly to rubber-stamp the deals. Melican , president of Proxy Governance. Melican, an executive vice president at International Paper from to , was involved in many of that company's mergers. And because there are going to be shareholder lawsuits, you can pretty much assume you'll be in depositions for many years.
Melican said, when executives of the acquired company are promised high-ranking jobs at the combined entity, postmerger. Melican says, boards have to get in early.
But hey, that's what being a fiduciary means. Anyone Tell the Board? Where there is a will, there is a way! CalPERS is "concerned by the timing of a decision in May by PacificCare 's board to boost payout that executives would get if the company was sold. Typically a board would know whether high-level merger talks had been occurring for months Upon what need for change was it based?
What are the odds that the BOD's decision was based upon a "fairness" or consultant's opinion, which issued by someone who was well-paid by Management? Steven Milloy … claimed that Goldman's policies are … designed to advance Mr. He objected to Goldman's gift of , acres in Chile to the Wildlife Conservation Society , calling it a conflict of interest because Mr. Paulson is chairman of the Nature Conservancy, which works with the society, and has a daughter, Merritt, who sits on the society's board of advisors.
Paulson batted away the charges with a simple defense: The board did it, not me. He was not even part of the discussions of the Chilean land deal. Paulson's involvement with the conservancy or his advocacy of environmental causes. No one who makes it into the board room of a place like Goldman is unfamiliar with the time-honored strategy of gaining influence by showing interest in the CEO's interests, be they golf or global warming.
Why wouldn't directors rubber-stamp Mr. There are no studies to prove this, of course. But the society pages hold a clue: It's the CEO who is toasted at benefits and photographed for posterity. How often is the source of the funds -- the pockets of shareholders -- even mentioned?
The Free Enterprise Action Fund , a tiny mutual fund with a conservative political bent, says the gift hasn't benefited Chile or Goldman shareholders. The fund petitioned the Wall Street firm on Friday to have its board review the gift as part of a broader study of Goldman projects supporting environmental causes, and seeks a shareholder vote on the proposal.
Treasury Secretary, defended the donation at Goldman's annual meeting on March 31, saying it was something 'Goldman Sachs wanted to do. Paulson's son, Henry Merritt Paulson. At the meeting, Mr. Paulson said he knew of the deal but recused himself from the decision, leaving it to the board. Paulson's underlying assumption is that whatever Goldman wants is proper. Now the country's most important court for corporate law has raised questions about some deals.
I n recent back-to-back opinions, the Delaware Court of Chancery criticized two publicly listed companies that have agreed to sell themselves to private investors. The rulings expressed concern that Topps Co. The author of both opinions, year-old Vice Chancellor Leo E. Strine faulted the company's board for letting Chief Executive Robert E. Rossiter negotiate the deal with Mr. Icahn on his own. The Delaware court's increased scrutiny of possible conflicts comes amid rising complaints, and more lawsuits, criticizing buyout deals for allegedly enriching corporate executives at the expense of the shareholders.
In the current buyout craze, many buyout firms retain the management by offering rich pay packages and a stake in the newly private entity. These deals are being challenged in the courts by shareholders who allege that they are getting a meager payout for the company. They say boards are accepting deals based on factors other than the best-available price.
In addition, shareholders are accusing boards of running into the friendly arms of private-equity buyers to escape activist hedge funds, who are trying to oust them through proxy battles.
In the case of Topps, the New York producer of trading cards, collectibles and candy, shareholders have accused the board of breaching its duties to get the highest price for the company Strine warned in his Topps opinion. Not only do CEOs get theirs, but , when they do wrong, Shareholders foot the bill.
Once again, shareholders are shouldering the costs of unethical behavior they had nothing to do with. Hill and Richard W. Painter, professors at the University of Minnesota Law School. In 'Better Bankers, Better Banks,' they argue for making financial executives personally liable for a portion of any fines and fraud-based judgments a bank enters into, including legal settlements.
Hill said in an interview. If that's the case, bad CEOs are able to hang on to their jobs long after they should be driven out. In a new study titled Pay for Failure: Few of the plans, for example, required that the company's performance be measured against its industry peers. It's a matter of mutual back-scratching, as another recent study confirmed. The authors are John K. They found that companies paying CEOs excessive amounts also pay directors excessive amounts.
Companies that pay too much also tend to perform worse than their peers. Kozlowski was exceptionally extravagant with company money, Mr. Campriello showed jurors an expense report Mr. John Fort submitted for his attendance at a single three-day board meeting. Campriello asked 'This is the way we traveled,' Mr. Permitting extravagant expenses is the morale equivalent of bribery. Raines received salary, bonus and other compensation last year However, Fannie Mae is not a person.
The Broadcom Corporation … shareholders are being asked to vote on a company proposal to increase by 12 million the number of shares authorized for grants under its stock incentive plan. In addition, a 'yes' vote will expand the types of stock awards that the company can offer executives and employees, as well as grant the compensation committee the right to reprice underwater options at any time.
This objectionable repricing practice removes the risk for executives and employees that outside shareholders incur when their stock falls. Had the proposed plan been in place last year, it would have cost shareholders an amount equal to about 75 percent of the company's revenue, the firm said.
Berman had until 29 February been affiliated with a law firm that served as outside counsel to the Company and had since 1 March been engaged by the Company to render legal, regulatory and other professional services.
Berman was a director of Tyco until December 5, From March 1, through July 31, , Mr. Berman was engaged to render legal and other services. During this period, Tyco compensated Mr. Berman with health benefits, secretarial assistance, a cell phone and electronic security services for his homes. Weingarten said the two clashed over several issues, including the amount of Tyco business sent to Kramer Levin for which Berman received referral fees. Dennis Kozlowski , Tyco's former chief executive, and were not approved by the board or disclosed in filings with the United States Securities and Exchange Commission.
He also has drawn fire from critics for having business ties to Disney in the past while sitting on the board. Those payments ended two years ago amid an outcry from corporate governance experts. Independence of new chairman, who had sided with Eisner, is called into question. Mitchell, 70, … who has little business experience, said … yesterday that he had no desire to play the corporate strategist, as many chairmen do.
Instead, he sees his main job as negotiating among factions of unhappy investors, other board members and Michael D. Eisner, the chief executive who lost the chairman's title in the wake of a resounding no-confidence vote at the company's shareholder meeting on Wednesday.
Mitchell's appointment is not sitting well with many of the investors … nor with corporate governance experts. They complained that not only does Mr.
Mitchell have negligible corporate experience, but they say he is too closely allied to Mr. Eisner and his appointment does little to address investor discontent with Mr. Eisner's management of the company. Mitchell takes umbrage at the notion he is beholden to Mr. He said he had only had three social dinners with Mr. Eisner actually approached Mr. Mitchell in to gauge his interest in joining Disney as president.
Mitchell said because the decision was made only on Wednesday, the duties of the job had not been completely defined. But he said the setup and his lack of business experience should not impede his ability to oversee Mr. The most beholden Directors may live in states of denial. And that has prompted some governance experts and investment fund officials to question his sincerity toward reform and sensitivity to appearances. Their concern is that directors may have competing loyalties between the shareholders they are supposed to serve and the executives who put them on the payroll.
Sidhu has … become a national force in community banking by repeatedly triumphing over rebellious directors and shareholders. Sidhu has excluded directors from important deal deliberations or waits until the last minute to brief them.
Some investors say his public statements about acquisition plans are misleading. Sidhu has a board of supportive directors who have scant banking experience, are compensated unusually well and, in some cases, enjoy access to Sovereign loans and business opportunities. While that's more than directors at similar banks get, Sovereign justifies the pay by noting that its directors meet 14 times a year, five more times than its peer average.
Sovereign has had business dealings with and made increasing loans to its directors in recent years. Sovereign added that the Troilo leases all have been at market rates. Troilo didn't return calls. Troilo so he could buy a Lawrenceville, N. To help secure the loan, Mr. Troilo used another Sovereign-mortgaged property, in Pennsylvania , that he also rented to the bank. The Monday filing said Mr. Troilo's bid was better because it included 'no financing, inspection or due diligence' conditions.
Was Sovereign concerned that its building could not withstand "inspection or due diligence"? Upon what objective criteria was that decision made and by whom? But, after all, it is just another instance of Shareholder assets being considered as chump change! The bank offers no relevant disclosure about the loans, including terms, interest rates or performance.
Relational Investors discovered the full extent of them only by cross-referencing Sovereign's Securities and Exchange Commission filings with records at the Office of Thrift Supervision.
Sovereign says the SEC filings excluded credit extensions that haven't been drawn down. Since , however, Sovereign's filings have included no specific figures, just vague reassurances. Wall Street is skeptical that a three-year turnaround plan will work, and Fitch has cut its bond rating to triple C, which is low even for junk bonds. So far this year it is down another 27 percent. But there is little pain at the top. But there is no mention of internal equity -- of the justice of paying a lot to bosses when workers and investors are suffering.
Perhaps board members think they deserve an increase because their past stock grants keep losing value. They face tricky choices in deciding how much to challenge year-old Mr. Mozilo, who co-founded the company 38 years ago.
Countrywide's nonemployee directors collect fees, shares that they must hold for at least a year, and perks that include health insurance and spousal travel, according to the latest proxy statement. The pay range is above median total compensation for directors of the largest U. Countrywide said directors review their compensation annually with the help of an independent pay consultant Countrywide rewards board members so well that 'at some point, you cross the line between paying for services provided and a very lucrative thing where board members aren't going to challenge management,' says Mark Reilly, a partner at 3C, Compensation Consulting Consortium.
Corporate Library has long argued that Countrywide's board has done a poor job of designing Mr. Mozilo's pay package, guaranteeing him too much compensation regardless of performance. The consultants urged directors to slim his hefty contract, partly by revamping his annual bonus formula Directors kept the formula and decided to replace the consultancy Snyder , 75, is Countrywide's lead director. Institutional shareholders who have tried to engage the Countrywide board on issues like Mr.
Mozilo's pay say that Mr. Snyder, who has been a board member since , prevents such dialogues from occurring. One complaint was that he does not share letters from stockholders with other members of the board.
Charles Prince , for instance, who stepped down under fire as Citigroup Inc. The rules are in place to allow boards to retain an appropriate mix of retired and active executives and push out members who no longer have the time for outside directorships because of more demanding new jobs. Still, many governance watchers and veteran directors say boards rarely accept a resignation after a member loses a CEO spot—no matter the reason.
Another former chief who kept a directorship is Richard Syron , ousted as head of Freddie Mac in when the U. He recently received a warning that he may face civil action from the Securities and Exchange Commission as part of its investigation into whether Freddie Mac properly disclosed its exposure to subprime loans.
Syron held a board seat, rejected his offer to resign. Syron didn't have to defend his actions to fellow board members. To be sure, boards occasionally drop a member after leaving a CEO post under fire.
Advanced Micro Devices Inc. AMD declined to comment. I just could not resist the temptation. The devil made me do it. The other dude done it. It was my poor upbringing. Then, there is reciprocal back scratching.
It would be so embarrassing at the country club to encounter a removed former fellow Director. Additional conflicts of interest are caused by the existence of a Director clique. No one wants a wild card. It's not surprising that their objective is to get along. Statistical analyses can go just so far in detecting links between Directors. For directors, it is simply bad form to nitpick over a couple of million dollars with another member of the club, particularly one who helps set director fees or serves on the compensation committee of other corporations.
Even legendary investor Warren E. Buffett was not immune to the collegiality. He recently wrote to the Shareholders of Berkshire Hathaway Inc. A certain social atmosphere presides in boardrooms where it becomes impolitic to challenge the chief executive, he wrote.
Buffett is reputed to be the best of the best! Thus, Shareholders have no reason to expect better representation from any other Director.
Buffet, the best of the best, found it necessary to ask a subordinate multiple times about a sizable transaction and walked away without getting the "details. Was he suspicious when he had to ask a second time? What about the third time? Did the subordinate still retain his job? Is there a letter of reprimand in the file? What does the subordinate say he communicated to Buffet? Why was the questioning of Buffet not done under oath?
Well, since he was questioned by regulators, if the truth not be told, there is always the obstruction of justice route. Hopefully, Buffet does better where he serves in the capacity of a corporate Director. After his talk with Mr. Ferguson wrote an e-mail to Joseph Brandon, then General Re executive vice president, describing the conversation with Mr.
Buffet, saying that he asked Mr. Buffet whether the deal was proper. Ferguson reported that Mr. Buffet said the deal was proper, but not by a large margin. Buffet told regulators that didn't happen. Buffet told regulators that he asked Mr. Brandon several times whether General Re's accounting on the deal was okay, but didn't learn details. Did Ferguson want to know? If not, why not? Was a copy of the email transmitted to Buffet when it was written? Did Buffet read it and not respond?
When did Buffet first question Brandon? What triggered the question? If Brandon was not answering Buffet, perhaps Buffet could have asked his external auditors? On the other hand, if one is suspicious, why alert the external auditors to look carefully at what might be a minefield?
Perhaps the issue of a Director's fiduciary duty to Shareholders was lost in an ethical haze? He stated, in part, "I've sat on enough boards and audit committees to understand the kind of culture of seduction that characterizes many boards.
It's a game that many CEOs played and played well by seducing their boards with perks and private attention and contributions to favorite philanthropies, and meetings that were short on substance and long on fluff.
The boards became willing accomplices. And it's part of the American personality to go along and become more fraternal rather than more vigilant. Levitt did all that board sitting before From to , as Chairman of the SEC, what did he do or attempt to do to cure the specific problem? Also, it appears that Mr.
Levitt is claiming that it would be un-American to require Directors to be vigilant on behalf of Shareholders. Directors who served at failed companies may rate a red badge of courage and additional opportunities to employ their varied talents. In some cases, however, companies have stopped passing on this information in proxy materials distributed to shareholders…. But what about the directors of companies like Enron, WorldCom, Adelphia Communications, Global Crossing, Waste Management, Tyco International and others who oversaw the implosion of hundreds of billions in market capitalization?
In many cases, they got better jobs. But many companies don't make it easy for shareholders to find out where their directors have been. Sprint Nextel 's biography for William E. Conway , for instance, mentions nothing about his stint at Enron.
Thornton of Goldman Sachs Group Ford's, someone with whom he shares several friends and even more interests. Thornton was appointed to the Ford board at the recommendation of the company's chief executive and chairman The lawsuit … said the chief executive and chairman, William Clay Ford Jr.
The suit said Mr. Ford's acceptance of the shares was a 'usurpation of an opportunity that belonged to the company' After shareholders complained in late , the company formed a committee that concluded that Mr.
Ford had not acted improperly. Ford's purchase in May of , shares of Goldman Sachs, the largest allocation to an individual, drew attention after a lawyer for Ford shareholders wrote to the company's board, demanding an investigation.
The shareholders demanded that Mr. Ford return any profits and pay damages to the company for the lost investment opportunity. Ford bought the shares, Goldman's co-chief operating officer, John Thornton, sat on Ford's board.
Ford had no significant say in the awarding of investment banking business. They also said … that Mr. Ford had a long personal banking relationship with the firm.
Ford probably claimed a tax deduction for his charitable donation. And, how does one determine that "no wrongdoing had occurred"? Ford did not violate the non-existent policy. Therefore, "no wrongdoing had occurred. In some cases, 10 percent or more of all donations went to these organizations. Companies, directors and non-profits routinely stress the importance of philanthropy and say the donations don't affect board members' independence.
Critics, however, say big donations can create a clubby atmosphere that may make directors less likely to aggressively challenge management. Although foundations detail their donations in annual tax filings with the Internal Revenue Service, companies are not required to disclose most non-profit affiliations of their directors, making it problematic for investors to know the full extent of such connections.
Farmer , the 87 year old chairman of the company Farmers, who are members of the board, along with other directors The coming-together will be at a town in Georgia where the main attraction is a 'gentleman's club' exclusive enough to garner members by invitation only. Augusta National Golf Club, which openly and proudly discriminates against women, will produce its Masters Golf Tournament with considerable help from the masters of corporate America.
It also makes a mockery of board independence, now required to protect stockholders and the public from cronyism in financial dealings. The cronyism that perpetuates gender bias against employees is every bit as harmful, and ought to be stopped just as forcefully. At nearly all other companies, a simple majority will do.
Purcell will color their judgment in any way. Indeed, Morgan Stanley bankers, not to mention the dissident executives, have accused the board of coddling him. It is packed with former chief executives, many from the Chicago area, where Mr. Some have golfed together; others have worked for one another. First, there is the Kraft connection. Miles, the chairman of the nominating committee and … recruited two former executives who worked for him at Kraft in the mid's: Then there is the McKinsey connection.
Four directors were partners at McKinsey, the management consulting firm, as was Mr. And finally, there is the fact that a number of directors, notably Mr. Miles, serve together on boards at other companies. Miles, for example, serves on six boards, including that of the AMR Corporation, where he serves alongside Mr.
Brennan also serves on six boards, and Charles F. Brennan during his battle with shareholders. Miles and Kraft on its merger with Philip Morris, and he is now advising the independent directors at Morgan Stanley on a range of matters, including their strategy for dealing with their antagonists. One point made by the retired executives is that until recently, no director - including Mr. Purcell - had ever operated a line of business for a securities firm.
That set Morgan Stanley apart from nearly every other Wall Street firm. Partners have fiduciary duties to one another. So much for the concept that BODs have undivided loyalty to represent the interests of Shareholders! Who is watching the supposed watchdogs of Management? Do conflicts of interest disappear if they are disclosed to Shareholders who have no effective means to remedy the situation?
Purcell, their first call for help when to the superlawyer Martin Lipton. Lipton quickly donned a number of other legal hats - advising the board, Mr.
Purcell and the company itself on tactics, legalities and, most controversially, severance pay to departing executives. Purcell stepped down, a compensation specialist at Wachtell, Adam D. Chinn, in tandem with the board's compensation committee, draft the controversial severance packages that awarded Mr.
Chinn's reputation for cobbling together generous severance awards for departing chief executives is such that the contracts are known as Chinn-ups. As a result of these payouts, the board has been sued by shareholders and received irate letters from institutional investors who have decried the packages as a violation of the very governance practices Mr.
Lipton was hired to improve. Purcell's leadership, many Morgan Stanley executives were never quite clear about Mr. Several said they frequently asked each other: Was he advising the board? The answer, people close to the board said, is that Mr. Lipton was, first and foremost, an adviser to the board. When it became clear that Mr. Purcell would depart, he hired his own lawyer to negotiate.
While the very best governance practices would argue for the hiring of separate counsel on the compensation packages, time and confidentiality considerations led the board to stick with Wachtell. Lipton for being an apologist for corporate management, that assertion misses the point - that Mr.
Lipton's fiduciary responsibility is to best represent and advocate in support of his client's interests. If Lipton represented only the BOD and, thus, the Shareholders, his fiduciary duty was to get the executive to leave for the lowest amount. It is fair to assume that he, at the least, did not discourage the BOD from appointing Chinn while knowing that he Chinn does Chinn-ups. Lipton and Chinn are members of the same law firm. Lipton probably benefits from each fee Chinn earns for the firm.
The BOD tries to justify its act of hiring Chinn by claiming "time and confidentiality" considerations. Does Lipton's rolodex contain the name of at least one competent non-Wachtell attorney who has a reputation for being parsimonious when dealing with executive payoffs? Couldn't Lipton have asked Chinn for a referral?
Did the BOD not know that attorneys, even non-Wachtell attorneys, have a duty to maintain confidentiality? Purcell decided he should step down…. The tale serves as a caution for boards in an era when their role in corporate governance is drawing more scrutiny.
The damage from delay when directors fail to spread their antennae widely is especially great at a Wall Street securities firm like Morgan Stanley, where the most valuable assets can walk out the door and never return.
At a mid-March board meeting, Laura D'Andrea Tyson , a former Clinton administration economic official who is dean of the London Business School , said directors should take the criticism of Mr. Purcell's record more seriously.
Tyson, calling her comment inappropriate … The board took steps to interview more employees. Knight, the director who had clashed with Ms. Purcell and didn't see any reason to discuss the matter since the board had already decided on it…. The attempt to cut off debate bothered some other directors, people familiar with the meeting say. Knight and Zumwinkel left, the discussion turned more freewheeling. Knight's conduct is reminiscent of that of a school yard bully who made it to the big time.
Institutional Shareholders do much "discussing an effort to out the directions," but, when push came to shove, they faded. Knight and Zumwinkel, who should be their first targets, need not lose any sleep. Bostock , had a family connection to a hedge fund that does business with the firm. They generally worry that the indirect connections can impair the directors' abilities to serve as independent advocates for shareholder interests.
Is this what is meant by "the ties that bind"? If this is what Morgan Stanley does when it is under a corporate governance microscope, imagine what might occur when the spot light turns elsewhere business as usual.
Yet during that time, the company's stock has slid 12 percent while shares of its archrival, Lowe's , have climbed percent. Why would a company award a chief executive that much money at a time when the company's shareholders are arguably faring far less well? Two of those members have ties to Mr. Nardelli's former employer, General Electric.
Nardelli's lawyer in negotiating his own salary. And three either sat on other boards with Home Depot's influential lead director, Kenneth G. Langone , or were former executives at companies with significant business relationships with Mr. In addition, five of the six members of the compensation committee are active or former chief executives, including one whose compensation dwarfs Mr. Governance experts say people who are or have been in the top job have a harder time saying no to the salary demands of fellow chief executives.
Moreover, chief executives indirectly benefit from one another's pay increases because compensation packages are often based on surveys detailing what their peers are earning. To its critics, the panel exemplifies the close personal and professional ties among board members and executives at many companies — ties that can make it harder for a board to restrain executive pay.
They say this can occur even though all of a board's compensation committee members technically meet the legal definition of independent, as is the case at Home Depot.
Langone's circle of friends and associates… [T]he Home Depot board decided … Mr. Nardelli, who had no retail experience, should become CEO. Nardelli might not hit one of the few performance goals the board had set to cause payment of a long-term incentive plan, the board lowered the goalposts…. More than a dozen U. Several factors are spurring such appointments, recruiters and management consultants say.
Boards are quicker to fire poorly performing CEOs, often before potential internal successors are ready for the job. Many of these companies have deep-seated problems, making it harder to recruit outsiders. And increasingly, there's a deep pool of outside executives in the boardroom.
They contend that a chief chosen from the board signals cronyism and weak succession planning. A director's comfort with a colleague obscures 'a clear view of the individual's suitability to be a successful CEO,' says Richard Breeden, an activist investor and former chairman of the Securities and Exchange Commission. Franks , the former chief of the Public Broadcasting System and the publisher of a Spanish newspaper would seem to have nothing in common — except for one thing.
They all sit on the board of Bank of America. But as they and 13 of their colleagues meet Wednesday to discuss how to steer the bank through its troubled merger with Merrill Lynch, they are likely to be united by something else: Their shareholder scrutiny has also turned an unusual spotlight on the oversight role played by the board members, many of whom were picked by Mr. Lewis from several companies that the bank, based in Charlotte , N.
Bank of America's board is an eclectic group, and it will grow larger this week when it adds three members from the board of Merrill. The bank's two most powerful directors, O. Spangler , are close to Mr. Lewis's predecessor, Hugh L. Lewis, only two people on the board — the former chief of FleetBoston and a former senior executive of MBNA — have roots in banking. While Wall Street is rife with tales of bank and brokerage directors who deferred to executives seeking faster growth through ever-riskier business, Bank of America's shareholder advocates have grown increasingly concerned about the board's ability to understand financial risks and rein in managers.
While critics charge that Bank of America's board has been little more than a rubber stamp in the empire-building campaign of Mr. Lewis, others describe it as independent and willing to push back against the chief executive.
Its members are expected to vote Wednesday on the addition of three directors from Merrill Lynch Their approval would raise the number of board members to 20, and would tighten the web that already binds many of the board's current representatives. Yet some board members are connected in other ways that reveal strong cross-pollinations with other company boards. Nothing could get the attention of Directors more than the prospect of being held personally accountable for their lack of diligence in performing their duties to Shareholders.
Board members also acknowledge they are struggling to rein in bloated executive compensation, but are counting on investors to lead the cause to knock it down. Those conclusions aren't a decade old, but are part of a recent survey from the consulting firm PricewaterhouseCoopers and the Corporate Board Member magazine , which culled responses of more than 1, directors at U.
Directors still don't have as much control over corporate dealings that many believe is needed to curb supersized compensation. While more boards are independent of management, there are still plenty of cases of directors using flawed judgment or kowtowing to demanding executives who are pushing their own agendas.
Part of the problem, it seems, is that boards are still controlled by CEOs, with 50 percent of directors surveyed saying that board leadership flows from the company's top executive who is also board chairman.
Those individuals, therefore, set the agenda as well as the flow of information at board meetings and among members. In the area of compensation, two-thirds of responding directors believe that U. Separately, a third believe that stockholders are the group most likely to get pay pared down. But it is hard to reduce pay when the directors themselves don't know how much they've even agreed to pay executives. Less than half of those surveyed said their boards use tally sheets to add up total compensation, and about one in five directors said that they didn't know what the CEO would collect if he or she is terminated, retires or should there be a change in control.
Among the bigger shockers in these filings are the tallies showing how much money executives will cart away if they are terminated or agree to a merger. Buried in these figures is one of the most contentious items in all of payland: Michael Kesner , principal at Deloitte Consulting in Chicago said, 'Boards are now just getting a sense of how big that number is.
If directors are surprised by gross-ups, you can imagine how stockholders will react. And given how ubiquitous gross-ups are -- surveys say 75 percent of chief executives have such arrangements with their companies -- the shocks could be far and wide. Training the spotlight on gross-ups may help stamp them out. As long as they were kept under wraps, directors didn't have to justify them to angry shareholders.
Six days later, its chief executive, E. Underlying the situation at Merrill is the nagging question of what a Wall Street board is expected to know about complex financial markets where asset values can shift drastically and where many directors are not in the business of managing trillion-dollar balance sheets — or perhaps have little experience in doing so. Directors should know what independent risk controls are in place, who is overseeing that function After every market crisis Case law, lawyers say, has affirmed that directors have to be informed and make sure that obvious red flags are not ignored.
There were certainly some red flags waving in front of directors. One issue should have been the revolving door of talent in the upper echelons of the firm And, like everyone else, directors knew about the bank's very public shift into riskier business areas, which until this summer were delivering handsome profits. Merrill had become the top issuer of collateralized debt obligations in the marketplace, and its profitability soared; fixed-income revenue in the second quarter was up percent.
According to some analysts, the billion-dollar size of those profits — and the soaring return on equity — should have caused directors to ask whether the risks being taken to generate higher profits warranted better controls.
Analysts say that directors should have asked about the exposures and, more important, what might happen to those exposures under various financial scenarios, including a collapse of the mortgage market.
In July, when credit markets worsened and Merrill faced escalating losses Merrill's potential losses did not reflect the heavy levels that they ultimately reached in October. Management realized that there was a structural problem, and Merrill announced on Sept. Regardless of what ratings agencies had to say about the securities Merrill and others were juggling, many investors, especially hedge funds, had been pointing out the flaws in the structured finance market.
Did ML Directors feel that packaging such loans enhanced investment quality? The most plausible explanation is that the question of whether a company has a good or poor leader remains disturbingly nebulous for boards. A 'star CEO' seems to be, regrettably, more a social construction of the media and company PR efforts than a knowable reality — except, perhaps, with the benefit of hindsight.
Then last week, shareholders lost the only shot they had at firing incompetent directors when the Securities and Exchange Commission voted to prevent investors from nominating their own board candidates. Certainly the losses generated over the last few months by major financial firms indicate that something is very wrong with the boards of these companies. These directors either knew of the risks their managers were taking and blessed them, did not know of them at all, or were advised of them and were unable to rein in the executives in charge.
Moore the treasurer of North Carolina noted that these boards happily paid enormous sums to executives when mortgage desks were coining money. Those managers act like owners. What acts constituted the exercise of "diligence"? What did the BOD do to act "aggressively"?
What was "the information"? When it all of the foregoing occur? What "information" did the BOD not know? Why did the BOD not know the "information"? Kilts knows a thing or two about dealing with corporate boards. Kilts gave a keynote speech at a corporate-governance conference last April, he decided to share some of what he has learned over the years.