Board of Directors

News & Analysis as of

Delaware Court Dismisses Action Against Seller's Directors and Financial Advisor, And Finds That Large Stockholder's "Side Deals"...

On October 24, 2014, the Delaware Court of Chancery issued a decision, In Re: Crimson Exploration Inc. Stockholder Litigation, addressing when: (i) a stockholder with less than majority voting power may be deemed a...more

California Attorney General Clarifies Oversight Board Member Compensation Rules

Opinion Comes in Wake of Dissolution of Redevelopment Agencies - Local entities making appointments to oversight boards are prohibited from compensating the appointee, or reimbursing expenses incurred as a result of...more

Board Oversight of Political Contributions Is Gradually Becoming a Corporate Governance Standard

On September 24, 2014, the Center for Political Accountability and the Zicklin Center for Business Ethics Research published their fourth annual index of corporate political disclosure and accountability (2014 Index), which...more

Consequences of a Data Breach: Lessons from Wyndham Worldwide

On October 20, 2014, Wyndham Worldwide Corporation won dismissal of a shareholder derivative suit seeking damages arising out of three data breaches that occurred between 2008 and 2010. Dennis Palkon, et al. v. Stephen P....more

Delaware Court Confirms Applicability of Business Judgment Rule to Investment Decisions of Insolvent Corporations

In its October 1, 2014 decision in Quadrant Structured Prods. Co. v. Vertin, et al., C.A. No. 6990, the Delaware Court of Chancery applied the protections afforded under the business judgment rule to investment strategies...more

Sixth Circuit Adopts New Corporate Scienter Test in Securities Cases

The Sixth U.S. Circuit Court of Appeals recently issued a significant decision clarifying the pleading standards in securities litigation, clarifying what must be alleged to impute a corporation with knowledge of alleged...more

Court Dismisses Shareholder Derivative Action Targeting Directors and Officers for Data Breaches

Earlier this week a federal district court in New Jersey dismissed with prejudice a shareholder derivative suit, Palkon v. Holmes, No. 14-CV-01234 (SRC) (D.N.J.), that tried to blame the directors and officers at hospitality...more

ISS Publishes 2015 Draft Policy Changes; Comments Due by October 29, 2014

On October 15, 2014, Institutional Shareholder Services Inc. (“ISS”) published its key draft policy changes for the 2015 proxy season. There are only two proposed updates for the United States. The first introduces a new...more

ISS Releases 2015 Draft Voting Policy Changes for Comment

On October 15, Institutional Shareholder Services (ISS), a leading proxy advisory firm, released for comment draft voting policy changes for 2015. The two significant proposals that would impact US companies are as follows...more

ISS Releases 2015 Draft Voting Policies for Independent Chair and Equity Incentive Plan Proposals

Institutional Shareholder Services (ISS) recently released for public comment its 2015 draft voting policies. The draft policies relate to two topics affecting the U.S. market: independent board chair shareholder proposals...more

Final Disclosure Rules Regarding Women on Boards and in Senior Management

TSX-listed companies will almost certainly need to include disclosure in their information circulars or annual information forms on the representation of women on their boards and in senior management for the 2015 proxy...more

In re Cornerstone Therapeutics Inc. S'holder Litig., Consol. C.A. No. 8922-VCG (Del. Ch. Sept. 10, 2014) (Glasscock, V.C.)

In this opinion on a motion to dismiss, the Court of Chancery held that, in a controller transaction governed by entire fairness review, a plaintiff need not specifically plead non-exculpated breaches of duty as to...more

New Disclosure Rules Regarding Women on Boards to be Effective for 2015 Proxy Season

New disclosure rules regarding the representation of women on the boards and in senior management of public companies, and director term limits, will come into effect December 31, 2014. Disclosure will be required for...more

Rural/Metro II: Additional Lessons for Financial Advisors, Directors and Counsel in M&A Transactions And Related Litigation

On October 10, 2014, the Delaware Court of Chancery issued a decision awarding nearly $76 million in damages against a seller’s financial advisor. In an earlier March 7, 2014 opinion in the case, In re Rural/Metro Corp....more

Cut! Eighth Circuit Excludes Non-Board Member from CGL Coverage for “Directors”

Directors and Officers liability policies are typically precise in defining the job descriptions of the individuals to whom they offer coverage. Recently, in United Fire & Cas. Ins. Co. v. Thompson, No. 13-2352 (8th Cir....more

Why Does Determining A Quorum Have To Be So Complicated?

California’s quorum requirement for meetings of directors appears on its face to be straightforward – a majority of the authorized number of directors constitutes a quorum of the board for the transaction of business. Cal....more

Re-evaluating the Board Evaluation

Board evaluations have long been standard practice among public companies. With shareholder interest in corporate governance practices at an all-time high, the focus on board evaluations is expected to increase. ...more

Bill Aims At Clarifying Status Of Ex Officio Directors

Yesterday’s post considered the various paths to becoming a director under the California General Corporation Law. The California Nonprofit Corporation Law defines “directors” in a similar fashion but makes it clear that the...more

Just How Many Ways Are There To Become A Director?

Lao Tzu is said to have written that there a many paths to enlightment, but how many paths are there to becoming a director? To answer the question, let’s look at the definition of “directors” in the California General...more

What public companies and their Officers, Directors and Significant Shareholders should do about the SEC’s crackdown on the...

Earlier this month, the Securities and Exchange Commission announced enforcement charges against 28 officers, directors and significant shareholders, including hedge funds and large financial institutions, for failing to...more

Recent Remarks By Officials Reinforce DOJ’s Focus On Criminal Fraud Investigations And Prosecutions Of Culpable Individuals

In a trio of speeches given at separate events on September 17, 2014, Department of Justice (“DOJ”) officials announced new initiatives and points of emphasis in the Government’s ongoing efforts to hold corporations and...more

Delaware Court Approves Out-Of-State Forum Selection Bylaw Adopted At Time Of Merger

In City of Providence v. First Citizens BancShares Inc. et al., C.A. No. 9795-CB (Del. Ch. Sept. 8, 2014), the Delaware Court of Chancery (Bouchard, C.) held that a minority shareholder's claims against a Delaware...more

What Questions CEOs and Board Members Should Be Asking Themselves About Tax Inversions [Video]

Partner and Chair of BakerHostetler's Tax Group, Paul Schmidt, discusses tax inversions. What CEOs and Board of Directors should be asking themselves?...more

Tips for Managing and Disclosing Conflicts of Interest

Conflicts of interest arise in any relationship where a duty of care or trust exists between two or more parties. For financial services companies the identification and management of conflicts of interest must be a core...more

1, 2 or 3 Years? How Should Boards Decide The Frequency Of Say-On-Pay Votes?

Although the initial ruckus over how to determine the outcome of executive compensation say-on-frequency votes has subsided, I still maintain that the Securities and Exchange Commission botched the rule (§240.14a-21(b)). ...more

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