Issues in brief

BoardroomDirect®
Update on current board issues: July 2012

Issues in brief

Cloyd named new Center for Board Governance Leader

Mary Ann Cloyd, a partner in PwC’s Center for Board Governance, has been appointed leader of the center, succeeding John Barry who retired from the firm on June 30. In her new role, Cloyd will lead a group of experienced PwC partners and governance specialists who provide perspectives and insights on corporate governance issues and leading practices. 

“Mary Ann’s outstanding technical skills and experience advising clients on governance issues will serve PwC’s commitment to helping boards achieve quality of governance at a time of unprecedented regulatory change and shareholder scrutiny,” said Bob Moritz, chairman and senior partner of PwC US. “Under John’s leadership,” he added, “the Center for Board Governance has become a leading source of information on emerging governance trends and, under Mary Ann’s leadership, the team will continue to counsel boards navigating the complex challenges they face.”

As leader of PwC’s Center for Board Governance, Ms. Cloyd leads a team of PwC partners -- Catherine Bromilow and Don Keller -- along with three directors, making it one of the largest governance centers globally.

“PwC’s Center for Board Governance has unmatched breadth and depth of expertise in governance that we apply for the benefit of companies and their shareholders, the capital markets and as part of PwC’s commitment to quality,” said Cloyd. “We regularly meet with and advise boards and audit committees that find themselves increasingly in the spotlight.”

Cloyd oversees the production of the Center for Board Governance’s Annual Corporate Director Survey, will spearhead its numerous publications, including BoardroomDirect, To the point, The quarter close - Directors edition, and Continuing the conversation, as well as education programs related to board governance.

SEC to decide on conflict minerals rules soon

The SEC set August 22 as the date to vote on the conflict minerals disclosure rules.

Regarding conflict minerals, the recent SEC meeting notice reads:

"Item 1: The Commission will consider whether to adopt rules regarding disclosure and reporting obligations with respect to the use of conflict minerals to implement the requirements of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act." 

The notice mentions the SEC will also consider rules regarding similar disclosures for resource extraction companies, such as oil companies, under Section 1504 of Dodd-Frank.

Many in Congress thought the SEC would act on the rules. But SEC Chair Mary Schapiro told the House Appropriations Subcommittee on Financial Services and General Government in March the timing would more likely be “the middle of the year” due to the complexity of the rules and the need to give companies the "latitude and flexibility" to comply. She also noted there would be a phase-in period to allow for supply chain due diligence mechanisms to be developed. Since the Dodd-Frank Act was signed into law in 2010, the SEC received more than 200,000 comment letters on the conflict minerals and resource extraction disclosure rules.

For more background on the proposed conflict minerals disclosure rules, please read PwC's To the point - Summer 2011.

Citing proxy obstacles, online shareholder voting platform closing

As the SEC focuses on rulemaking around Dodd-Frank and the Jumpstart Our Business Startups (JOBS) acts, there is another major project that remains on its agenda -- "proxy plumbing."

The commission issued its concept release more than two years ago to conduct a broad review of the proxy system in light of industry and investor interest that the SEC update its rules to promote greater efficiency and transparency in the system and enhance the accuracy and integrity of the shareholder vote. 

This month the proxy plumbing project came to the forefront again as the private 3-year-old alternative voting platform, Moxy Vote, announced it is closing its doors July 31. The platform geared towards individual investors cited its inability to overcome two primary proxy system obstacles.

In an open letter to shareholders on its blog and Twitter account, Moxy Vote Co-founder Mark F. Schlegel discussed those obstacles:

  1. "Individual shareholders have no legal grounds to compel their brokers to deliver ballots electronically to internet voting platforms. And, unfortunately, many brokerage firms have stated clearly to us that they will send them only when required to do so by regulators."
  2. "Proxy distribution/collection agents are charging significant fees to internet voting platforms for vote collection – a fee that should be paid by public companies and one that proves substantially more burdensome to individual voters than institutional voters."

In the letter, Schlegel urged individual investors to engage regulators and policy makers to "ensure individual investors are given the same opportunities as institutional investors."