ACCOUNTING AND AUDIT MATTERS: FUNDAMENTALS

This session deals with current issues in accounting and auditing and seeks to improve directors’ understanding of accounting principles (and related auditing standards) that are of particular current importance.  What, for example, should the general-experience board member know about International Financial Reporting Standards (IFRS) and anticipated convergence between IFRS and United States’ GAAP?  The session’s goal is to provide the “ordinary” board member—typically not a member of the audit committee, or possibly a newly-appointed member—with the general awareness of these issues that can assist in a better fundamental understanding and, therefore, better service to the Company.

Panelists:

ROMAN WEIL, V. Duane Rath Professor of Accounting Emeritus at the Chicago Booth School of Business; Program Fellow, Stanford Law School; Visiting Professor, Princeton Economics Department

In a departure from past practice, nearly every board member must now be sensitive to issues of compensation, have a certain level of knowledge and expertise not previously expected, and must be able to practically evaluate and contribute reasonable judgment about certain compensation decisions.  This session will help new compensation committee members or other board members not typically involved in compensation committee matters develop a basic level of understanding about compensation obligations, best practices, and basic tools for navigating the increasingly complex arena of executive compensation.  Topics covered will include how to evaluate the basic components of compensation, interacting with compensation consultants, key legal issues that impact compensation, and other similar topics of a foundational nature.

Panelists:

F. DANIEL SICILIANO, Co-director, Directors’ College 2011; Associate Dean for Executive Education and Special Programs, Stanford Law School; Faculty Director, Arthur and Toni Rembe Rock Center for Corporate Governance, Stanford University
JOE YAFFE, Partner, Skadden, Arps, Slate, Meagher & Flom

Shareholder activism has taken a sharper edge in recent years. Shareholders have evolved several new techniques for attempting to influence boardroom decisions, including initiatives related to majority voting, executive compensation, and shareholder proposals. This session reviews the most recent trends in shareholder activism and focuses on pragmatic measures that can help corporate boards respond to these developments.

Monday 11:00 am Session

Panelists:

PETER CLAPMAN, Chairman, Governance for Owners USA
MAUREEN ERRITY, Director, Deloitte LLP – Center for Corporate Governance
RICK FEZELL, Markets Managing Partner, Ernst & Young LLP

Moderator:

FRANK CURRIE, Partner, Davis Polk & Wardell LLP

Tuesday 10:30 am Session

Panelists:

MASON MORFIT, Partner, ValueAct
DUKE BRISTOW, Associate Professor of Clinical Finance and Business Economics, USC Marshall School of Business; Director, Landec Corporation
CHRISTOPHER YOUNG, Managing Director, Head of Contested Situations, Credit Suisse

Moderator:

LIONEL ALLAN, Chairman, National Association of Corporate Directors, Silicon Valley

The Foreign Corrupt Practices Act continues to create serious problems for companies engaged in international activities.  What should directors understand about the Act, its requirements, and potential penalties for its violation?  How can a board member determine whether his or her company is susceptible to charges of violation?  This panel will bring its members’ experience to bear in providing a better understanding of the FCPA provisions, and will respond to questions that participants may have.

Tuesday 10:30 am Session

Panelists:

JIM MEEHAN, Partner, PricewaterhouseCoopers
JASON RICHARDS, Principal, Forensic & Dispute Services, Deloitte Financial Advisory Services LLP

Moderator:

STANLEY SPORKIN, Head, BP America Ombudsman Program; Former U.S. District Judge, District of Columbia; Former Director of Enforcement, United States Securities and Exchange Commission

Tuesday 1:45 PM Session

Panelists:

JIM MEEHAN, Partner, PricewaterhouseCoopers
SUSAN MUCK, Partner, Fenwick & West LLP

Moderator:

STANLEY SPORKIN, Head, BP America Ombudsman Program; Former U.S. District Judge, District of Columbia; Former Director of Enforcement, United States Securities and Exchange Commission

Directors and Officers insurance coverage is an issue of huge importance for corporate boards and management.  Our panel of industry experts will lead a discussion highlighting the most important terms and conditions of a D&O insurance policy.  When and under what conditions, for instance, do insurance companies tend to contest payment on their policies?  How does indemnification work to protect directors and officers during and after a suit, and what is the importance of advancement of legal fees to covered parties?  Are there any new trends, such as a renewed focus on ERM (Enterprise Risk Management) that might impact future board liability and issues of coverage?

Panelists:

KEVIN LA CROIX, Partner, Oakbridge Insurance Services
MIKE SMITH, Partner, Oakbridge Insurance Services

Moderator:

PRIYA CHERIAN HUSKINS, Partner and Senior Vice President, Woodruff Sawyer & Company

The session will explore the special position that the chairman of a compensation committee has in a post Dodd-Frank environment.  It will also examine the specific knowledge that a chairman should have or obtain in order to be prepared for the issues now facing compensation committees in making compensation decisions.  Finally, and most important, the session will discuss in detail the interactive role that a chairman should play with other members of the compensation committee and the board, management and both legal and compensation consultant advisers to the company and the committee.

The session will encourage discussion with the panelists.

PANELISTS:

F. DANIEL SICILIANO, Co-director, Directors’ College 2011; Associate Dean for Executive Education and Special Programs, Stanford Law School; Faculty Director, Arthur and Toni Rembe Rock Center for Corporate Governance, Stanford University
SCOTT SPECTOR, Partner, Fenwick & West LLP

OK–under pressure from ISS, we appointed a lead director.  What does she do?  What is the role of the lead director?  Is it “a poor man’s non-executive Chairman,” or is it something different?  Is there a model, or is it different things for different companies and boards?  And for whom–and under what circumstances–is it important?  Or is it just window dressing?  The panel will examine these and related questions about the actual functioning of the lead director role in the modern corporation.

Panelists:

BONNIE HILL, President, B. Hill Enterprises
MASON MORFIT Partner, ValueAct
WES VON SCHACK, Lead Director, Bank of New York Mellon

Moderator:

DANIEL KELLY, Partner, Davis Polk & Wardwell

Intellectual property, whether in the form of patents, copyrights, trademarks or trade secrets, represents an increasing percentage of corporate America’s capital market value. IP litigation can be exceptionally expensive. Building the right patent portfolio can present crucial strategic challenges. Responding to “patent trolls” raises a host of related issues. Internet copyright and trademark issues can be central to a business strategy. An increasing number of these IP challenges rise to the board level because they implicate the future viability of the firm. This session brings together some of the nation’s leading experts on intellectual property strategy to discuss the board’s role in managing IP issues, review the impact of certain “game changing” cases in the past year, and provide recommendations to the board for superior methods to manage these issues.

Moderator:

CLEM ROBERTS Partner, Durie Tangri LLP

Panelists:

DOUGLAS LUFTMAN, Vice President & Chief Patent Counsel, CBS Interactive
RICHARD HSU, Partner, King & Spalding LLP

The current financial crisis has focused attention on models commonly used by major financial firms. Criticism of these models has been powerful and pervasive. Boards should be aware, however, that the most common forms of analysis used by corporate managements suffer from many of the same defects that plague Wall Street financial analysis. This session describes the flaws inherent in commonly applied “expected value” calculations, and provides an introduction to alternative decision-making techniques, generally known as real-options analysis, in a form appropriate for board-level application. The session also describes how boards can work with management to evolve a more “option-sensitive” approach to strategic decision-making.

Panelists:

SAM SAVAGE, Consulting Professor of Management Science and Engineering, Stanford University
JEFF STRNAD, Charles A. Beardsley Professor of Law, Stanford Law School

This breakout session will focus on the fundamentals behind recent legal trends, liability concerns, and investigations that impact public corporations.  We will discuss director liability and best practices as concerns board member responsibility and conduct.  Panelists will discuss suits against corporate targets and issues of interest in light of new or reinvigorated SEC enforcement strategies.  We will discuss the selection of litigation targets, the legal strategies used to exploit or defend director and corporate actions, and measures that directors can and should take in order to be prepared in today’s litigation environment.

Panelists:

JORDAN ETH, Partner, Morrison & Foerster
NICKI LOCKER, Partner, Wilson Sonsini Goodrich & Rosati LLP
ANDREW MERRILL, Partner, Finsbury Group

Moderator:

SARA BRODY, Partner, Sidley Austin LLP

The Supreme Court’s recent decision in Citizens United opens the door to far more active political participation by corporations. But should corporations become more actively involved in the political process, and if so, how should they become involved? What role should the board play in monitoring corporate political activity? How can the board help assure that the corporation complies with all relevant disclosure and contribution limitation provisions? Estimates suggest that the upcoming presidential cycle will involve expenditures in excess of $1 billion by each major party, and state and congressional campaigns will only add to the total. Pressures for corporations to consider political involvement will thus inevitably increase, and this session is designed to provide pragmatic advice for dealing with these pressures from within the boardroom.

Panelists:

MICHAEL MCCONNELL, Richard and Frances Mallery Professor of Law, Stanford Law School
REY RAMSEY, President and CEO, TechNet
KEN WILCOX, CEO, SVB Financial Group

Special investigations—typically required when there is a suggestion of a serious legal violation or conflicts-of-interest within the company—have become a fact of life for most companies.  If you serve as a director and haven’t seen a special investigation take place, you will.  Particularly in the last year or so, the need for such investigations has often arisen out of allegations or suspicions involving insider trading, and this session will look at the special investigation process through the lens of the insider trading allegation.  It will cover questions such as at what stage an investigation should be initiated, who should conduct it, and how the report of the investigation should be handled.  At the same time, it will cover the new ground that the SEC and the Department of Justice are breaking in their insider trading cases, the relationship between Regulation FD and inside information, the “mosaic theory” and other aspects of insider trading itself.

Monday 11:00 AM Session

Panelists:

JOHN DONOVAN, Partner, Ropes & Gray LLP
GARY MATSUZAK, Partner and Global Chair, Information Technology, Communications and Media, KPMG LLP
ANDREW VOLLMER, Partner, WilmerHale

Moderator:

SHIRLI WEISS, Partner, DLA Piper

Tuesday 1:45 PM Session

Panelists:

RANDALL BODNER, Partner, Ropes & Gray LLP
MEREDITH LANDY, Partner, O’Melveny & Meyers LLP
ANDREW VOLLMER, Partner, WilmerHale

Moderator:

SHIRLI WEISS, Partner, DLA Piper