Financial Reporting Issues for Corporate Board Members
This session focuses on the roles and responsibilities of directors in the context of corporate governance and compliance in light of the Sarbanes-Oxley Act of 2002, new required disclosures about executive compensation, and increased regulatory oversight and enforcement. Boards increasingly are taking a proactive stance to spot risks before they become incidents that will be the focus of enforcement or litigation. Boards also are actively managing a company's social contract to reflect a broader set of stakeholders, changing expectations, and new risk and business opportunities from social and political forces.
Board Oversight and Spotting the Warning Signs for Management Failure
Boards of directors provide oversight of corporate strategy and of the business leaders responsible for that strategy. Boards need to know what to look out for, and especially what warning signs to pay attention to, if they are to effectively spot brewing failures. This session will help directors spot the strategic, cultural, organizational, and leadership actions and signals that call for probing and discussion as part of their oversight work. Directors alert to what might go wrong at companies on whose boards they sit reduce the risk of unhappy surprises.
CEO Succession: Selection and Evaluation
Surveys of corporate boards indicate that only about one-third of all boards have developed a detailed CEO succession process, yet directors uniformly acknowledge that managing CEO succession is a fundamental duty. In this session, we analyze just what a CEO succession process should look like, what the role of the board is relative to the CEO, what research tells us about the most important attributes of new CEOs, the board's role in ensuring that their companies are developing a robust talent pool, and the types of questions boards need to ask to effectively manage this process.
Executive Compensation and Incentives
This session focuses on the motivation behind, and the process of, aligning incentives via compensation. Participants examine the incentive properties of executive pay, the changes in compensation over the past two decades, and current trends in the features of compensation packages.
Current Topics in CEO Compensation
Boards must choose compensation plans for the corporation's executives. Directors will learn how the incentives produced by these choices impact the economic performance of the firm. This session will review the typical executive compensation plans and discuss the factors that the compensation committee should consider before approving remuneration arrangements. It will examine innovations in the design of compensation contracts, role of compensation consultants, and how shareholder activists and other stakeholders assess executive compensation and equity ownership.
Audit Committee -- Qualifications, Responsibilities, and Content
What should audit committee members know? This session will explore the levels of independence, financial literacy, and financial expertise required for service on the committee. Mechanisms for achieving those levels, as well as their certification, will also be discussed. What duties fall to members of the audit committee? What accounting issues do they need to understand? This session will consider revenue recognition, off-balance sheet financing, and other critical issues.
This session will explore the various aspects of corporate finance that board members should know. It will cover three primary areas: (1) evaluating financial statements and financing decisions, including questions a board member should ask in trying to understand the company's true economic position; (2) understanding the capital markets, including issues regarding how the markets evaluate a company and how a board should—and should not—respond; and (3) evaluating M&A transactions, including questions that a board member should ask of any transaction.
The Board's Legal Duties and Liability Risks
This session will cover the legal duties of the board of directors. Directors' duties have long included the fiduciary duties of care and loyalty, the origin of which is state common law. In 2002, Congress enacted the Sarbanes-Oxley Act, which imposes new obligations on boards, and the stock exchanges adopted corporate governance rules, which create yet additional responsibilities. In this session, we will discuss what these legal rules mean for board structures and processes, and what they mean for the risk of director liability. In both areas, the goal will be to embed these inquiries in real-world situations boards face in confronting difficult problems.