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Ninety minutes is the length of a soccer game, a very short Broadway show, and, at this year’s Association of Corporate Counsel annual meeting in Denver, it’s the time allotted to each educational session. For some topics—such as Tuesday’s “SEC Update,” focusing on the regulatory environment facing corporations and corporate counsel—an hour and a half can feel like barely enough time to cover the topic at hand. Yet the four panelists giving the rundown on rule-making at the Securities and Exchange Commission and Dodd-Frank financial reform progress did manage to beat the buzzer—even if it meant, at the end, Microsoft senior attorney Peter Kraus promising to hit the highlights of the SEC’s new cyber-security guidance in 30 seconds. (Kudos: he delivered, though check out CorpCounsel’s lengthier take on that here.) Joining Kraus to discuss corporate governance issues at the Colorado Convention Center were Sophie Hager Hume, assistant general counsel at Starbucks Coffee Company; Robert Lindsey, counsel at Dell; and Walter G. Van Dorn, Jr., a partner at firm SNR Denton. Their presentations illustrated the range of ongoing calls for corporate accountability coming from investors in public companies. Executive compensation is still a “very significant” matter for investors, said Hume. “This is going to continue to be a big issue, and we’re going to have to face it,” she said. All the more so, she added, because there is also “significant disagreement” between institutional investors and issuers of shares on how to treat so-called “say-on-pay” rules, according to data collected by Institutional Shareholders Services Inc. (ISS). Hume called attention to the ISS 2011 Policy Survey Results Report on corporate governance issues—”a critical component” of ISS’s policy agenda, according to the organization’s website. She also noted that the current comment-period deadline for ISS’s 2012 proxy voting policies is October 31. “I highly recommend that you look at that,” she said. Throughout her portion of the panel discussion, Hume urged the in-house audience to initiate conversations with institutional investors. And, she said, “look at your opposition vote percentages. . . as a gauge” of what’s important to shareholders. Kraus, who is responsible for assessing shareholder proposals at Microsoft, evinced some of the major trends he has seen on governance and corporate social responsibility across sectors. The “macro-themes” in governance issues, he said, are: continued importance of performance, oversight, and accountability to shareholders—especially in manufacturing, energy, retail, and financial services. Given Steve Jobs’ decision to step down as Apple’s chief executive before his death, succession planning has also been the “subject of intense interest by shareholders,” Kraus said. But in terms of shareholder proposals on corporate social responsibility, Kraus said: “The real story in 2011 and, I think, continuing into 2012, is political activities, political contributions.” During the past proxy season, 49 proposals on political activities at various corporations garnered an average level of support of 24 percent, he said. “I think those numbers are going to increase as we enter the [2012 election] season,” Kraus added. With regard to Dodd-Frank’s somewhat controversial “whistleblower” rules, Van Dorn said to bear in mind that the SEC has also adopted “very broad” anti-retaliation measures to protect employees who come forward to report fraud from adverse actions by their companies. The rules established a new compensation scheme for whisteblowers whose information leads to a successful enforcement action by the SEC, and to a sanction that is at least $1 million. Not all Dodd-Frank rulemaking activities will necessarily come to fruition, Kraus and Lindsey each said. Kraus believes the SEC is facing a “much higher” bar for approval during the comment process for rules the agency has proposed. Lindsey pointed to a controversial provision in Dodd-Frank (Section 953) that would require a CEO’s compensation to be calculated as a ratio in comparison with the median wage of all company employees. The provision is full of logistical problems, Lindsey said, among them how such a calculation could be conducted at companies with employees in foreign countries. While some members of Congress are moving to repeal the provision, “it’s going to be problematic,” Lindsey said. “Everyone should be aware of it.” After the panel concluded and the beat-the-clock time was up, Kraus told CorpCounsel.com that Microsoft has evolved an “engagement-oriented approach” to shareholder proposals over the past five years, as opposed to a more traditional “confrontational approach.” If the company can’t give shareholders exactly what they want, they try to figure out an alternative. “We’ve reached good resolutions with shareholders,” he said. That usually means that shareholders have decided to withdraw a proposal so it does not appear on the company’s proxy statement, Kraus said, “but we’ve also taken some additional steps that advance Microsoft’s business goals and advance the shareholders’ goals in a way that would be mutually beneficial.” See also: “In-house Counsel as Targets for Government Prosecutions,” CorpCounsel, October 2011.

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