The Value of Reputation

Letter From The Editor

By Deborah Scally

It’s been said that if character is a tree, reputation is its shadow. Continuing that analogy, one’s reputation is strong and clearly defined when the sun is out but fades quickly once clouds appear.

For practicing legal professionals, there can be no cloudy days; a well-built reputation must be nurtured and maintained, which is never an easy thing whether you are an individual, a law firm, or a publicly traded company. Each year, we salute the top corporate law firms that reflect the highest levels of credibility and integrity on our list of America’s Best Corporate Law Firms. Voted on by hundreds of directors and general counsel nationwide, these firms have earned their gold stars by hard work and proven results, and again this year, Corporate Board Member applauds their efforts to serve as a backbone of trust and legal acumen among US companies.

GCS: Adding Value to the Boardroom

The Agenda

Compared with a decade ago, today’s general counsel are much more likely to be considered key members of the executive management team, and in fact, companies are increasingly including them in their succession plans. To gain more perspective on this trend, NYSE Governance Services, Corporate Board Member and BarkerGilmore collaborated to survey the opinions of directors, board chairs, and CEOs of US-based publicly traded companies.

Corporate Board Member recently interviewed John Gilmore and Robert Barker, both managing partners at BarkerGilmore, to talk about the findings of this year’s survey and offer their viewpoints on the evolving role of the general counsel in public companies today.

America's Best Corporate Law Firms
The 2015 Corporate Board Member /FTI Consulting Survey

Cover Story

Kudos to the firms that made our 2015 America’s Best Corporate Law Firms’ list—top-shelf firms voted on by a nationwide survey of corporate directors and general counsel.

The listings on the following pages represent firms whose unmatched integrity and reputation qualify their place at the table this year. Their track records speak for themselves in the arenas of corporate litigation, transactions, corporate governance, as well as many other practice areas that make them invaluable legal resources to public companies.

Corporate Board Member and FTI Consulting offer thanks to the hundreds of directors and general counsel who participated in the selections this year. Your vote of confidence brings honor and distinction to this annual program.

Law in the Boardroom 2015


By Kimberley S. Crowe

There’s no denying the behemoth that technology has become in corporate America—and while it fuels progress, it also creates vulnerability. Accordingly, directors and GCs strongly agree that the single biggest issue companies face today is getting their arms around IT and cyber risks. But as daunting as that may be, boards, executives, and their legal teams also have plenty of other critical issues to consider—some of which, like operational risks, compliance issues, and crisis preparedness, are simply the result of managing the business, while others, such as maintaining a competitive strategy, engaging with shareholders, and harnessing social media are an outgrowth of high performance—and wanting that performance to continue.

With those concerns in mind, we designed our annual Law in the Boardroom study, a co-venture with longtime partner FTI Consulting, to draw out details on the key risk issues and legal trends facing public companies today. Earlier this year, our universe of directors and general counsel answered our call for input, allowing us to gather data and opinions and compare and contrast each group’s perspectives on the top issues companies are wrestling with today.

Spinoff Strategies: When and Why to Break Apart the Company

Corporate Strategy

By John R. Engen

Shareholder activism is hot and so are corporate spinoffs. When one leads to the other—an increasingly frequent occurrence these days—things can get interesting.

In 2014, 63 companies spun off businesses—more than double the 31 such transactions the previous year and the highest level since 1998, according to Deloitte Consulting. Total value of those transactions: about $150 billion. New records could be set in 2015.

Pressure from activist investors to “unlock shareholder value” via a breakup is perhaps the biggest driver behind this spike. About one-quarter of recent spinoffs have been overtly engineered by activists, including ones at Internet auction house eBay, media giant Gannett, bearings and steelmaker Timken Co., and auto parts supplier Federal-Mogul. As many as half of those that appear to be initiated by boards may actually be the result of behind-the-scenes negotiations with an activist hedge fund, observers say.

GC's Who've Raised the Bar


By Charlie Deitsch, Charles Keenan and Kimberley S. Crowe

Plus: GC Watch 2015

Each spring, Corporate Board Member celebrates General Counsel who have risen to the top of their legal profession.

Suneel Gupta: The New Face of Innovation


By Deborah Scally

Embracing change means more than just coming up with new ideas. It requires a mindset shift that relies less on process and more on agility.

Suneel Gupta has been in the center of some of the fastest-growing and innovative companies of recent history and believes strongly in the need for a shift in perspective that allows companies to react to and embrace the feedback of end users as a means toward success. We sat down with Gupta recently to talk more about these ideas and how they relate to strategic discussions in the boardroom.

Corruption Compliance on a Global Scale

Special Report

By Charles Keenan

There is a powerful tide of anticorruption enforcement worldwide, and US board members need to understand how to navigate and negotiate these waters to sidestep litigation and reputational risk.

It might sound odd to say that enforcement of corporate anticorruption statutes has gone global, especially when the practice itself is already international in nature. But the domain of anticorruption enforcement—once mainly the province of US agencies going after companies under the Foreign Corrupt Practices Act (FCPA)—has now been embraced by many other countries, giving impetus for ensuring strong compliance programs.

Board Governance Series

Thought Leadership

By Laura J. Finn

As our recently released What Directors Think survey report confirms year after year, strategic planning and compensation are two top issues in the boardroom, yet directors struggle to spend enough time on the former and the benchmarks for the latter are constantly changing, leaving comp committees scrambling to keep up.

In our first Board Governance Series article, Jeffry Powell from Diligent offers three tips boards can follow to prioritize strategic planning in their board meetings. Next, Gerard Leider from Meridian Compensation Partners suggests five key focus areas for comp committees that want to think about compensation like an activist.

The Boardroom of the Future

Before We Adjourn

By Laura J. Finn

How did I feel to hear that in five or 10 years I’ll likely watch gamers playing sports via video game rather than attend a live event? And what about the possibility of a robot buddy who escorts me wherever I go, like a cross between a pet and a family member? Surprisingly, I didn’t feel bleak or discouraged, just curious about how evolving technologies will impact business, government, education—and more broadly, humanity.

On a cold March day in midtown Manhattan, I sat in Edie Weiner’s Future Trends Summit and listened to her and two other futurists lay out what’s coming next for planet Earth. The group of attendees sat around the room, listening to one trend at a time then discussing the implications, questions, advantages, and possibilities of each one. Every time I had a thought about a trend, I would soon realize: “Wait, it’s bigger than that.”

Compensation Committees and Share Buybacks

Weighing In: Executive Compensation

By Jeff McCutcheon and Rich McGinley

Share repurchase arrangements (buybacks) are expected to top $600 billion in 2015, up from an estimated $550 billion in 2014. In fact, at the current rate of growth, share buybacks will soon represent a return of capital twice the size of aggregate dividend payments. Critics (including Blackrock CEO Lawrence Fink) argue that this large return of capital is evidence of short-sighted management eating the seed corn rather than investing within the business.

In contrast, companies (and many activists) view their arrangements as rational, tax-effective decisions in reaction to a lack of attractive internal investment alternatives. Regardless of the reasoning, given the magnitude of buybacks, we believe it is worthwhile for compensation committees to review closely the relationship between buybacks and incentives and carefully consider the role of unintended consequences within the executive performance management process.

Communication is Key to Strengthening Audit Relationships

Weighing In: Audit Committee

By Cindy Fornelli

America’s robust systems of corporate governance and financial reporting serve as models for the rest of the world, which greatly benefits US companies, investors, and markets. A vital part of this success is the embrace of continuous improvement—US leaders in corporate governance and financial reporting do not rest on their laurels; they constantly look for ways to make these systems stronger.

Recently, capital markets stakeholders have focused on a critical aspect of financial reporting: the intersecting roles of the external auditor, the internal auditor, and audit committee. As discussed in a recent report, stronger communication and cooperation among these key players in the financial statement auditing process can help avoid potential tensions and improve risk management.