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December 7, 2012

INDUSTRY NEWS

DIRECTORS AND OFFICERS-Martin Lipton Lists Key Issues for Directors in 2013

By Matthew Garza, J.D.

Martin Lipton of Wachtell, Lipton, Rosen & Katz recently provided a list of nine corporate governance issues that he believes will be key to boards of directors in 2013. Mr. Lipton noted that in the years he has been providing the year-end list, the demands of regulation, and of activist shareholders, have increased on boards, as have the demands of the public with respect to health, safety, and other social issues. Among other key issues, he advised boards to focus on the following in 2013:

  • Working with management to encourage appropriate risk taking and long-term success in dramatically changing domestic and global economic conditions, despite pressure for short-term performance;
  • Minimizing vulnerability to attacks by activist hedge funds;
  • Resisting corporate governance activists who will continue efforts to do away with takeover protections, separate the positions of chairman and CEO, and lower the percentage of outstanding shares necessary for shareholders to call a shareholder meeting;
  • Fostering long-term relationships with shareholders and increasing understanding of shareholder perspectives;
  • Proactive crisis planning;
  • Retaining and recruiting experienced directors, and fairly compensating them for increased time demands;
  • Working with management to respond to increased regulation and changes in the general perception of business that followed the financial crisis.
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