New Site In the House
July 19, 2005 | Filed Under Legal Resources, General
Law.com quietly launched a new site yesterday, In-House Counsel.
It features a more streamlined layout, and an easier-to-navigate design. It incorporates content from Corporate Counsel magazine and other ALM publications, as well as sample forms and other targeted informational material.
In-House Counsel is worth watching and I’ve bookmarked it as one of my “Favorities.”
P.S. The current featured blog leaves a bit to be desired, however.
Easy for You to Say
July 18, 2005 | Filed Under Organization, In the News
Sometimes something you read invites a closer look.
It was widely reported last week that Hewlett-Packard is considering significant staff reductions. Reuters notes that new CEO Mark Hurd is considering a wide variety of options, including cutting as many as 25,000 jobs.
The WSJ quoted ($) a mutual fund manager on H-P last week:
Hugh Mullin, a portfolio manager at Putnam Investments, said any restructuring would be welcomed by investors. “There’s lots of potential for cost reduction,” he said, adding that a simpler, streamlined structure at the company would better enable it to grow. “I’d like to see it done and quantified,” he said.
“I’d like to see it done and quantified.”
Any GC who has worked through a workforce restructuring knows the complex legal, financial, HR and communication issues that come into play. There are many traps for the unwary (or hasty). (See a short issues list from Hughes Hubbard & Reed). It is important for H-P long-term to do it right. For the GC and senior management, these are fellow employees who are being talked about, not just headcount to be “quantified.”
I’m sure that doing things right is important for Putnam.
Close Shave
July 15, 2005 | Filed Under Managing, In the News
Is witness part of your GC job description?
Massachusetts Secretary of State William Galvin has subpoenaed McKinsey GC Jean Molino regarding the firm’s advisory work for Procter & Gamble in its acquisition of Gillette. This action stems from Mr. Galvin’s concerns that P&G underpaid for Gillette.
Press reports indicate that the subpoena ordered McKinsey to produce documents prepared for P&G relating to the merger and to identify who at other advisory firms in the deal were given those documents.
McKinsey has declined comment. No word on whether subpoenas will be directed at merger counsel, Cadwalader for P&G and Davis Polk for Gillette. Client P&G has an interest in McKinsey’s response as well, but it is likely under pressure to keep the merger process moving to obtain required approvals.
If I read his bio correctly, Mr. Galvin stands for re-election next year.
Bernie Ebbers in Three Acts
July 14, 2005 | Filed Under Compliance, Governance, In the News
Before resigning in 2002:
Arrest mug shot in 2003:
Leaving court after sentencing in 2005:
Given that a settlement of civil charges will take away virtually all of his assets, I have some empathy for Mr. Ebbers and real sympathy for his family due to the criminal sentencing. Aeschylus would write about this if he had a weblog.
Mr. Ebbers’ actions contributed to knee-jerk legislation that has a daily impact on the 99+% of companies that were already operating within the law. But that’s also an indictment of Congress–and they have immunity.
This 25 year prison term for corporate criminal liability seems disproportionate. I agree with Professor Ribstein that a loathing of capitalism is part of the story; I see Mr. Ebbers as a cause as well as a victim. Tom Kirkendall and Professor Podgor weigh in with excellent observations on the sentencing angle as well.
Catch and Release
July 13, 2005 | Filed Under Governance, In the News
I try to monitor developments in the areas of corporate governance and compliance. One automated search I set up recently hooked a press release that caught my eye.
A company settling class-action shareholder derivative litigation is scarcely news. Last week CMS Energy joined this group. It announced a $12 million settlement, apparently funded by insurance. The case arose from alleged “round-trip trading” that ensnared some companies in the energy industry a few years ago.
Part of the settlment also reflected the efforts of CMS to improve corporate governance and compliance, such as appointing a compliance officer, implementing and training on a code of conduct, improving procedures for reporting compliance concerns and splitting the roles of Chairman of the Board and CEO. Laudable actions all, most of which have been adopted by many companies.
Then this paragraph jumped right off the page:
Robert Weiser, an attorney for the shareholder who brought the suit, commended CMS Energy for strengthening its corporate governance. “CMS Energy has made a substantial commitment to its shareholders. The policies adopted by the Company make it a national leader in the area of corporate governance. CMS Energy shareholders should be proud of the steps the Company’s Board of Directors has taken,” he said.
A governance testimonial from plaintiffs’ securities litigation counsel?
Since the press release is part of the related 8-K filing made by CMS, this was by design, perhaps bargained for as part of the settlement. A Google search indicates that the Detroit Free Press took the bait, and included this in an article.
Such testimonials aside, strong governance practices can also be measured by a clean compliance record and a rising share price.
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