21st Annual Directors’ College
Sunday, June 21, 2015
Location: Stanford Law School, Palo Alto, CA
DIRECTORSâ€™ COLLEGE is the nationâ€™s premier executive education program for directors and senior executives of publicly traded firms. The program addresses a broad range of problems that confront modern boards, including the boardâ€™s role in setting business strategy, CEO succession, techniques for controlling legal liability, challenges posed by activist investors, boardroom dynamics, and contemporary challenges including the state of the macroeconomy and emerging cybersecurity threats.
Now in its twenty-first year, Directorsâ€™ College brings together leading CEOs, directors, regulators, jurists, and scholars for a rigorous and balanced examination of corporate governance, strategy, and compliance.
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Anticipated Plenary and Intensive Sessions for 2015:
CEO Succession: Hiring and Firing
Many experienced directors and governance experts believe that the boardâ€™s most important responsibilities relate to the CEO: Under which circumstances should a
CEO be replaced and, when a CEO departs, how can a successor be identified and retained? Recent turmoil at several large corporations (some driven by activist investors) underscores this point. This panel explores the range of difficult issues that surround the CEO succession challenge. How can a board decide that it is time for the CEO to go? Is there evidence that boards tend to wait too long before pulling the trigger? How should boards structure CEO succession strategies even before reaching the ultimate decision, and how should they go about searches for CEO replacements? Are there sound reasons to prefer internal candidates over outside hires? How should a board deal with a CEO who is not diligently grooming one or more successors?
Risk and Audit Committee(s)
The Audit Committee may (but need not) oversee both the audit function and matters of corporate risk (and attendant controls); this session addresses both functions. Together, audit and risk represent complementary areas of board activity that have been specifically addressed by Congress in the Sarbanes-Oxley Act and subsequently given attention
in connection with the 2008 financial crisis. This session will address how the Audit Committee should think about risks and controls, and what â€œoversightâ€ means in that context. The session will also address the relationships among the auditors, the Audit Committee, and managementâ€”what they typically are, and what they should be.
Shareholder activism is manifesting itself on multiple fronts. Proxy battles, takeover campaigns, say-on-pay initiatives, majority vote proposals, and â€œjust vote noâ€ campaigns targeting specific directors are the most obvious techniques whereby shareholders attempt to influence boardroom decisions. Much of the activity, however, goes on behind the scenes as shareholders rely on a variety of mechanisms to persuade corporations
to adopt their points of view. This session explores the current shareholder activism agenda, discusses effective boardroom responses, and reviews the status of legislation and regulations related to shareholder activism. The emphasis is on pragmatic strategies that directors can use to deflect conflict and communicate effectively with an increasingly restive stockholder base.
Understanding the Current Economy
The federal government continues to wrestle with budget deficits, tax policy, and growing entitlements. State governments confront substantial deficits, often combined with balanced budget mandates. The Eurozone threatens to collapse. Chinaâ€™s ability to continue its export-led strategy is hostage to slowing global demand. This panel reviews the state of the global economy from a perspective useful to directors of publicly traded corporations and relevant to the challenge of setting corporate strategy in a highly uncertain environment in which slow growth is the dominant paradigm.
This session, intended for directors seeking a deeper understanding of challenging compensation issues, focuses on current topics in executive compensation. The panel will review recent compensation trends, say-on-pay voting results and litigation, the evolution of withhold-vote campaigns targeting members of compensation committees, and recent evidence relating to best practices for compensation committees. The panel will also explore changes that some boards have adopted to constrain CEO compensation, novel compensation strategies, the challenge of structuring exit packages, and the latest developments in drafting CD&A. Particular attention will be paid to the positions taken by leading proxy advisory firms, the implications of new SEC compensation disclosure rules mandated by Dodd-Frank, and the need to structure appropriate clawback policies applicable to senior executives.
Crisis Anticipation and Management
Most corporations will encounter a corporate crisis at some point. Many corporate crises can be anticipated, and even those that canâ€™t be predicted can effectively
be prepared for. Boards have an opportunity to ensure that their corporations are optimally positioned to respond when the crisis arises. This session will explore the roles that boards should and should not play in the event of a corporate crisis, review the state of the art in crisis-control techniques and preparation, and evaluate a range of case studies of successful and failed examples of crisis control.
Cybersecurity and the Board
The global economy depends on the internet. But websites are easily hacked, valuable corporate information is frequently stolen, and large parts of our internet- based economy can be brought to its knees. The reality is, however, that most directors donâ€™t know much about cybersecurity, and most boards donâ€™t have a
single director who would qualify as a cybersecurity expert. Nonetheless, boards are ultimately responsible for assuring that corporations are ready to respond to a broad range of cybersecurity threats. This panel takes a very practical, board-level approach to the challenge of developing a risk-management program for cybersecurity
threats. The panel will review recent cyber-breaches, analyze the different forms of cybersecurity risk, describe rational steps for addressing these risks, and consider when and how companies might cooperate with the federal government in addressing these concerns.
M&A: Strategic and Financial Perspectives
Independent directors play a central role in M&A transactions, and must typically wrestle with a range of challenges. How engaged must a board be when considering M&A activity, either as target or acquirer? How can boards assess whether a proposed deal makes sense? How can boards help assure that a deal wonâ€™t be successfully challenged, and that directors wonâ€™t be exposed to liability? What is the state of the art when it comes to defensive techniques? How robust is the poison pill as a defense against an unwanted suitor, and how aggressive can parties be when structuring break-up fees, no-shop provisions, and other deal-structuring provisions? How can target-firm directors gain comfort that they are getting a fair price, and how can acquiring-firm directors assure that they arenâ€™t overpaying? And, once an acquisition is completed, how can the target be effectively integrated? This panel of senior deal- makers, investment bankers, and legal experts will address these and other cutting- edge issues in merger and acquisition strategy.