Podcasts

Silicon Valley Directors’ Exchange™

Tone at the Bottom: Governance Lessons from the Wells Fargo Bank Crisis


What happens when you have a well – meaning and talented board and a CEO who was regarded within the industry as one of the best managers with a stellar reputation? Was it inevitable that the CEO would be forced to step down by an outraged Congress and populist sentiment? Within the governance umbrella, the panel will focus on issues ranging from public disclosure requirements, whistleblower policies and mechanics, compensation policies (including the board’s use of claw-back provisions), company policies regulating employee conduct, and the negative publicity suffered by the bank.

Coping with Uncertainties of a Networked World


As businesses become more and more driven by digital information, they depend on their ability to move data around the world. The shifting European privacy landscape, more sophisticated and varied cybersecurity threats like the recent attacks that shut down major Internet sites, and data localization rules cropping up around the world present significant  challenges to moving data across borders.

The Future of the FCPA: Danger Ahead for Issuers

The Foreign Corrupt Practices Act (FCPA) is a hot – button issue for enforcement agencies in the United States, and for companies around the world that may be subject to the FCPA’s long extraterritorial reach. Nonetheless, many executives remain unsure of the law’s scope and requirements, and of the best practices for FCPA compliance. There are also important considerations regarding the benefits of self-reporting potential FCPA violations to U.S. authorities and cooperating with those
authorities in their investigation of FCPA – related misconduct.

THE EVOLUTION OF PAY FOR PERFORMANCE Shareholder Vigilance or Apathy?

Several years into a period of formal, quantitative pay for performance (PfP) tests, as defined by ISS and Glass Lewis, are we better off? That is, are we seeing better alignment of realized/realizable executive compensation with firm performance? And, are firms with better PfP also performing better?

Cyber-Security for Dummies®: The Technical Stuff


This second program in our series on cyber-security focuses on the technical aspects.

Handouts:

Brian Finch – SVDX Slides
FireEye Overview – SVDX Panel April 2016
Lucas Moody – SVDX Presentation
ThreatMetrix SVBX Presentation April 2016

After the Toasting: Expert Tips for Directors of China-based Businesses


Issues facing boards whose companies have entered the China market by setting up a new business, establishing a local partnership or through an acquisition there.

Shareholder Activism: The Good, the Bad or Just Ugly?


“Shareholder activism” is in the news almost every day. But how does it really play out here in Silicon Valley? Is activism beneficial to (some) shareholders in the short-term but harmful to the company (especially Silicon Valley companies) in the long-term?

An Effective Board: Pipe Dream or Reality?

The role of the board has become more complex and demanding. With the rise of activist investors, the increasing risks related to cyber-security, privacy and social media and the challenges of operating businesses in a fast-changing and global environment, it is imperative that Boards of Directors operate in an effective and efficient manner.

Replacing Board Members: The Elephant in the Room

With the rise of activist investors, the advent of proxy access, and continuous changes on the competitive landscape; focus and attention on board composition and succession planning has never been greater. Boards are under increasing pressure to assemble the right mix of leadership experience and skills not only to help their companies succeed today, but also to face inevitable curves ahead.

But how do businesses and boards strike the right balance? How can a board objectively assess what’s working and what’s not?

Runaway Management Teams – Views from the Bench and Boardroom

Board membership is difficult enough these days, even when the relationship between board and management functions well. But when faced with runaway or careless management teams, the situation can quickly devolve, increasing business and legal risks for the company and its board members. What key principles should guide directors and their advisors when a management team ignores the board’s advice or refuses to keep the board fully informed on important business developments and strategic issues? What practical steps should board members consider when facing management teams who will not heed strategic advice? That elevate their own interests above those of the company? Or that engage in questionable and self-serving practices? Should a board member take control of the situation? Call a litigator? Fire the CEO? Resign?

Lost in Translation: Directors & Cyber-risks

Directors aren’t CTOs: What is the “right” level of inquiry and diligence when it comes to cyber-threats? Where will boards be held responsible for cyber-failures, and what can they do to protect their shareholders and themselves from frivolous suits? What did the Target board fail to do that the Wyndham board did so well? The panel includes active public company board members, a corporate governance expert steeped in the ethos of Silicon Valley and a renowned cyber-liability insurance expert. The program will be both practical and interactive.

NEAR DEATH (CORPORATE) EXPERIENCES

In October 2011, investors and analysts began questioning certain crop payments made by Diamond Foods to its growers. The Audit Committee of Diamond Foods’ board of directors commenced an internal investigation of the company’s accounting practices. The timing could not have been worse: Diamond was weeks away from closing an acquisition of Pringles from Procter & Gamble valued at $2.35 billion. The Audit Committee investigation began a period of intense crisis and turbulence for Diamond that few could have predicted at the time.

In the face of such adversity, it’s remarkable that Diamond managed to navigate a path to survival and recovery.

 

Living with the Activists

Activist shareholders are pushing their agenda in corporate America. Today’s public company can be a target of an activist hedge fund regardless of size, performance or relative success.

Boards now need to be activists, too. How can board agendas address likely shareholder concerns? How should public companies engage most effectively with their stockholders? What can you expect for 2015 in activist campaigns and shareholder engagement? And what does activism mean for board strategy, leadership and culture?

 

Is This Seat Taken? A VC’s Role on Boards

The role of VCs on private boards and their boardroom role in the IPO process are the stuff of Silicon Valley legend. The real story of VCs in boardrooms — when they first take a seat at the table to when they eventually leave the room — needs to be told. We’ll help set the record straight with this engaging look into boardroom dynamics.

Innovation, Disruption, and the Board

Stanford Directors’ College Podcast about Innovation, Disruption, and the Board. Hosted by Joseph A. Grundfest, Co-Director of Stanford Directors’ College and interviewing Conor Kehoe, Director, McKinsey & Company.

Heads or Tails?
The Art and Science of Executive Compensation

All directors are keenly aware of their responsibility in setting executive and CEO compensation. Increased external pressure on — and opinions about — CEO pay and more crowded meeting agendas limit the available time for meaningful discussion and make this role more challenging than ever. The stakes in getting executive compensation right are high, with real opportunities to engage leadership and drive business results, but also with real risks of poor outcomes.

Background Info:
CorpGov.net

Talk Is Cheap:
The Board’s Role in an Ethical Culture

Board resolve can be critical to the development of an effective ethical culture — defined as the values that inform the behavior toward the organization’s stakeholders. Features of an ethical culture will be examined, along with its value to the bottom line, company brand and reputation. Examples of effective board involvement will also be explored, that still hold management responsible for operational execution and performance.

Background Info:
Slides from April 17, 2014 Program
Making an Ethical Decision app

Moving Day: Taking out the Founder

A passionate, visionary founder has the start-up organized and funded and captured first customers, but does not have the experience (or skill set) to scale the company to a liquidity event. The need to move the founder from CEO to an executive technical position or “just” a member of the board and an investor is more the rule than the exception in Silicon Valley. Unfortunately, this transition is often badly handled, turning the founder from a major asset to a bruised critic at best, and a passive aggressive saboteur of the CEO at worst. This program will focus on the planning and execution that can make this transition a positive one for all stakeholders.Background Reading: Intro to March 20 Meeting

Where to Pick a Fight:

The Brave New World of Forum Selection Clauses and Shareholder Litigation

Shareholder derivative lawsuits have long been a challenge for directors of publicly traded companies, particularly when such lawsuits are filed in multiple states. The relatively recent advent of the concept of exclusive jurisdiction in Delaware, however, would seem to reduce the potential for such litigation chaos. However, for a minority of companies, the exclusive jurisdiction provisions may do harm rather than good.

Background Data:
ICSF Charts

STOCK BUYBACKS

Smart or Foolish?

Should boards reexamine stock buybacks? Companies routinely adopt and typically justify programs to repurchase their shares. While perfectly legal and well within the protection of the business judgment rule, should boards look more closely at what these programs entail, how they are justified and what unintended consequences may ensue?

Early Exits

The Good, the Bad and the Ugly of Secondary Placements

As a board member of a private company, how do you make the best decision when a stockholder or investment group requests to transact shares prior to a full IPO or liquidity event? In some cases, it may be a founder or early investor looking to capture some of the value created to date in a situation where the company may still be a good distance from a liquidity event. Or it may be a private equity group offering to purchase existing shares just prior to an IPO to reduce risks of an aborted IPO.

Got Technology Chops?

If you don’t speak Geek, you’re not a competent director.

Have you heard of “Big Data,” but aren’t sure what it really means (or how much it has to do with your industry)? Do you keep seeing articles about cyber-security, but couldn’t describe the difference between SQL-injection and a brute-force (hacking) attack, if your life depended on it?

Background Reading Material:
Directors and Technology: How Much “Sophistication” Is Enough?

Let’s Make a Deal!

Thinking about an exit for your company? Listen and learn from this investment banker with experience in buying and selling companies. He shares his lessons learned and personal experiences on board dynamics, positioning companies for maximum return and how to play the negotiations game to win.

Background Reading Material:
Needham Market Overview 4.15.13

Two Classes of Common Stock: Qui Bono?

In light of the IPOs and subsequent performances of Facebook, Groupon, Zynga, etc., there has been renewed discussion in The Valley of whether two classes of common stock, that places control of the Board in the hands of the Founders and not the investors, benefits the investors or just entrenches Management. The argument in favor of two classes of common is that it allows the Founders to run the company without interference from activist shareholders who are “short-termers.” The argument against is that a Founder who is a poor CEO cannot be removed by the Board — and hiring the firing the CEO is the raison d’etre of a corporate Board. Our panel of seasoned experts hold divergent views on this topic.

CHINA: FRAUD, INVESTIGATIONS AND THE RULE OF LAW

The panel covered a wide range of issues for corporate directors with operations in China. While the FCPA may be the most feared (and certainly the most talked about), it is by no means the only issue that directors must keep in mind. The panel explored how boards should reconcile cultural differences such as “lavish” entertaining, while still upholding ethical and moral business standards and maintaining shareholder value. Given their on-the-ground experiences, the panel shared “real world” useful examples and suggested best practices for directors.

M & A: Pitfalls for Directors

M&A activity is on the rise, and recent decisions by the Delaware Chancery Court make the stakes for directors higher than ever. The businesspersons and lawyers on this panel will offer their insights about the life-cycle of a current M&A transaction from initial market check to consummation and then follow-up litigation, pointing out the all-too-frequent pitfalls for directors.

Shareholder Activism Goes Mainstream

Shareholder activism has evolved from a peripheral activity by a few well-known personalities to a normalized range of activities by investors large and small. The largest institutional investors in the world are more engaged than ever with the companies in their portfolios, and hedge fund activism is on the rise given the economic success of many activist investors. Corporate directors are in the midst of this change and need insight on how to navigate these waters and how to ensure they have done what is required to position their companies for success in this evolving environment.

The DNA of a Successful Board

What are the best practices of a highly-effective board?
What are the warning signs that a board is becoming dysfunctional?
What can you do to change direction when you believe you need to?
What role can you play in improving the efficiency and effectiveness of your board?

Board Evaluations

Rigorous Process or Kabuki Theatre?

Interview with: Dave House, Chairman of the Board of Brocade Communications SystemsHosted by: Mark Lonergan, Founder and Managing Partner of Lonergan PartnersIn recent years, virtually all boards acknowledge that an annual board evaluation is required by “best practices.” How that evaluation should be done, by the board members themselves or by outside “experts” still remains an open matter. And whether these evaluations, either internal or external, are in most cases useful in improving board performance or in “weeding out” nonproductive directors.