Topic: Corporate Governance

U.S. Regulatory Reform Heads to the Implementation Phase

July 23, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation; Whistleblower Rules

Dodd-Frank Wall Street Reform and Consumer Protection Act Signed by the President

On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, the most sweeping financial reform legislation in over a generation. The law was largely the product of public consternation and anxiety following the 2008 financial crisis and subsequent recession. The signing of the bill does not, however, mark the end of the process for this round of financial reform and regulation. Despite the President’s comments yesterday that the new law "provides certainty to everybody, from bankers to farmers to business owners to customers," the reality is that Dodd-Frank leaves to regulators the task of conducting pivotal studies, defining core terms, and drafting comprehensive rules, regulations and exceptions that will answer many central and currently open questions raised by the legislation. And so, short of reaching our destination, we have just embarked on the second leg of a long journey.

Securities and Exchange Commission Issues Concept Release Seeking Public Comment on U.S. Proxy System

July 22, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Proxy Access

The principal mechanism for U.S. shareholder participation in corporate governance is being comprehensively scrutinized by the Securities and Exchange Commission (the "SEC") for the first time in almost thirty years. On July 14, 2010, the SEC issued a concept release seeking public comment on numerous fundamental aspects of the U.S. proxy system (the "Concept Release"). Noting concerns from both issuers and investors, the SEC proposes to examine the integrity and efficiency of the proxy system as a whole. Although it is not presented as a rulemaking proposal, the Concept Release will likely lead to significant SEC rulemaking in the coming years. Given the wide range of parties with vested interests in the proxy system, members of the corporate community should strongly consider participating in the dialogue related to this important area by submitting comments to the SEC, either individually or through collective means.

Executive Compensation, Corporate Governance and Other Securities Disclosure Provisions in the Dodd-Frank U.S. Financial Regulatory Reform Act

July 21, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation; Securities Regulation

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act," available here), the most far-reaching financial regulatory reform legislation in decades. The Act affects not only the financial services industry but also all public companies. This Memorandum focuses on the Act’s executive compensation, corporate governance and other securities disclosure provisions applicable to public companies. This Memorandum also discusses the steps that public companies should consider taking now in light of the Act’s provisions. We have included as Exhibit A a chart listing the provisions described in this Memorandum and as Exhibit B the statutory text of these provisions. [1]

Executive Compensation and Corporate Governance Provisions in the Dodd-Frank U.S. Financial Regulatory Reform Bill

June 30, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation

On June 30, 2010, the U.S. House of Representatives approved the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Bill," available here), the most far-reaching financial regulatory reform legislation in decades. This alert presents a chart on the corporate governance and executive compensation provisions contained in the Dodd-Frank Bill. In addition to summarizing each provision, the chart: (1) states whether the legislation requires rulemaking by the Securities and Exchange Commission ("SEC") to implement the provision (note that in many cases the SEC may adopt or amend its rules in response to a provision even if not required by the legislation); (2) provides the effective date of the provision; and (3) describes the types of companies to which the provision would apply.

Delaware Chancery Court Addresses Standard for Evaluating Controlling Stockholder Tender Offers

June 4, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Securities Regulation

In a recent ruling with important implications for parties structuring minority freeze-out transactions, Vice Chancellor Travis Laster of the Delaware Court of Chancery embraced a unified standard for reviewing such transactions, regardless of whether they are effected by means of a negotiated merger or a unilateral tender offer. In In re CNX Gas Corp. Shareholders Litig., C.A. No. 5377-VCL (Del. Ch. May 25, 2010), V.C. Laster held that a proposed two-step freeze-out transaction — a unilateral tender offer followed by a short-form merger — is subject to the strict entire fairness standard, rather than the deferential business judgment rule, unless the tender offer is both (1) recommended by a special committee of independent directors with the authority to negotiate with the controlling stockholder, and (2) subject to a majority-of-the-minority tender condition. V.C. Laster concluded that, because the Special Committee of CNX Gas had not recommended that stockholders tender, the transaction should be reviewed for entire fairness.

Preparing for the Conference: A Comprehensive Review of the Senate Financial Reform Bill

May 27, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Securities Regulation

On May 20, 2010, after three weeks of floor debate, five cloture votes, and nearly a year of development, the "Restoring American Financial Stability Act of 2010" passed the Senate by a vote of 59-39. Three Republicans (Sens. Collins, Grassley and Snowe) voted with all but one present Democrat (Sen. Feingold) to pass the bill and move the center of the debate on to conference.

Corporate Governance and Executive Compensation Provisions in Senate Financial Regulatory Reform Bill

May 24, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation

On May 20, 2010, the U.S. Senate passed the Restoring American Financial Stability Act of 2010 (the “Senate Bill”), the most significant financial regulatory reform legislation in decades. This legislation impacts not only the financial services industry but also all public companies. This memorandum focuses on the corporate governance and executive compensation provisions that will apply to public companies if the Senate Bill is enacted, and points out how the Senate Bill differs from the financial regulatory reform bill passed by the House of Representatives in December 2009 (the “House Bill”; available here). This memorandum also addresses the steps that companies should consider taking now in order to be prepared to comply with these provisions and the implementing rules and regulations to be adopted by the Securities and Exchange Commission (“SEC”) and the exchanges.

Restoring American Financial Stability Act of 2010 – A Comprehensive Review of the U.S. Senate Banking Reform Bill

April 23, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation; Securities Regulation; Whistleblower Rules

On March 22, 2010, a bill seeking general reform of financial industry regulation in response to the recent financial crisis was adopted on a party-line vote by the Senate Banking Committee as the "Restoring American Financial Stability Act of 2010." It subsequently was reported to the Senate as Senate Bill 3217 (posted on the Committee’s website on April 15, 2010). The Senate Bill has been, and will continue in the near term to be, the subject of much public debate and partisan negotiation.

U.S. Sentencing Commission Amends Requirements for an Effective Compliance and Ethics Program

April 13, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance

The United States Sentencing Commission voted unanimously on April 7, 2010 to modify the Federal Sentencing Guidelines for organizations, including the provisions that set forth the attributes of an effective compliance and ethics program. After considering a number of proposed changes to these Guidelines, the Commission voted to:

Financial Regulatory Reform: Chairman Dodd Releases New Legislation to Reform Financial Services Industry Regulation and Enhance Consumer Protection

March 17, 2010 | Posted by Gibson, Dunn & Crutcher LLP Topic(s): Corporate Governance; Dodd Frank; Executive Compensation; Securities Regulation; Whistleblower Rules

Gibson Dunn is closely tracking government responses to the recent turmoil that has catalyzed a dramatic and rapid reshaping of our capital and credit markets. We are providing updates on key regulatory and legislative issues, as well as information on legal and oversight issues that we believe could prove useful as firms and other entities navigate these changing times.