Shareholder Proxy Access
October 30, 2006
On Sept. 5, 2006, the United States Court of Appeals for the Second Circuit stated: 'In deeming proxy access bylaw proposals non-excludable under Rule 14a-8(i)(8), we take no side in the policy debate regarding shareholder access to the corporate ballot.' <i>American Federation of State, County & Municipal Employees v. American International Group, Inc., 2006 WL 2557941 (2d Cir. Sept. 5, 2006) ('AFSCME')</i>. Despite the Second Circuit's neutral intent, <i>AFSCME</i> has generated a surge of renewed interest in the legal and policy implications of shareholder proxy access, and specifically shareholders' expanding power to influence director elections.
New Chief At the CEO's Roundtable
October 30, 2006
Recent reports of criminal investigations, indictments and resignations of high-ranking company personnel coming out of the Hewlett-Packard boardroom remind us that, even after the scandals of the 1990s and the host of new laws, regulations and internal corporate practices that followed, bad things can happen at good companies. Among other things, the saga at HP reinforces the need for an independent compliance and ethics function at all publicly traded corporations. What follows is a proposal to create such a function by improving on the considerable advances in this area made by U.S. companies over the past several years. The foundation for this proposal is this: Ethical and compliance issues are best addressed by corporate officers who are organizationally, physically and financially independent from those of their colleagues who might be subject of their investigatory and reporting work.
Real-Time Collaboration Solutions Yield Major Efficiencies
October 30, 2006
Real-time collaboration (RTC) has advanced to a point where its advantages bring benefits to almost every aspect of organizational communications. For law firms, RTC makes possible new ways of working that are simple to adopt, easy to afford, require little or no CapEx and, in most cases, utilize existing computer and peripheral equipment. RTC can bring together employees, clients, trainers and others in ways that save time and overcome distance, thereby delivering measurable competitive advantage.
Kumho for Clinicians in the Courtroom
October 30, 2006
Two Supreme Court rulings, <i>Daubert v. Merrill Dow Pharmaceuticals Inc.</i> and <i>Kumho Tire v. Carmichael</i>, have had a profound effect on the treatment of expert testimony in the courts. In 1993, the Supreme Court, in Daubert, articulated guidelines for admissibility of scientific expertise as testimony. Later, in 1999, in <i>Kumho</i>, the Court focused on the admissibility of clinical expertise as testimony. More recently there has been increasing recognition of the inconsistency of trial courts in their construction and articulation of evidentiary standards to medical testimony. One proposed remedy is that 'Physicians should respond by correcting courts' misinterpretations of medical practice and assisting in the development of legal standards that encourage thoughtful and informed consideration of medical testimony by judges and juries.'
Security Breaches: What You Need to Know About European Legislation
October 19, 2006
Last month's installment discussed corporate security practices, the legislative background in Europe, and mandatory reporting provisions. Part Two addresses additional reporting obligations, prior registration, the possibility of civil actions, and manually held data.
The Human Side of Data Security: The Critical Role of Employee Controls
October 19, 2006
As headlines continue to report data security breaches at an alarming rate, discussion often focuses on the need for enhanced technical controls, such as two-factor authentication and encryption, to protect sensitive, personally identifiable information. The role of the company employee, both as the cause of, and the first line of defense against, security breaches is often lost in the analysis. Yet developing law is increasingly requiring administrative or procedural controls, particularly those directed at employees, as a component of a legally compliant security program.
Consumer Data Privacy in the Merger/Acquisition Context: What's an Acquiring Mind to Do?
October 19, 2006
Current wisdom favors non-disclosure of the private data related to consumers held by companies that obtain such data in the course of doing business. This sentiment is in full blossom in a wide variety of contexts, not the least of which are the provision of medical services and of financial services. In these heavily regulated industries, protection of consumer data is the subject of complex regulatory schemes aimed at ensuring data privacy and security while, nonetheless, allowing business to be conducted in its ordinary course.
Lessons Learned: Issues Exposed in the Aftermath of the Hewlett-Packard Debacle
October 19, 2006
On Sept. 5, 2006, <i>Newsweek</i> published a story about Hewlett-Packard's Chairman Patricia Dunn's use of a private investigation firm to locate the source of leaks of confidential corporate information. As the story unfolded, the public learned the following: After confidential information appeared in news publications in 2005, certain officers and certain members of the board of directors of Hewlett-Packard ('HP') authorized the launch of two investigations, the first in 2005, and the next in 2006, to locate the source of the information leaks. The basis for the investigations was that the information leaked to the press was known only to board members. Certain officers and directors collectively comprised the 'HP investigation team' in the secret investigation of the leaks to the media. In devising its plan, the HP investigation team sought the assistance of a top investigator, Ron DeLia, head of Security OutSourcing Solutions, Inc. ('SOS'), with whom Hewlett-Packard previously had worked on unrelated matters. DeLia allegedly encouraged the HP investigation team to use pretexting or 'social engineering' to obtain private cell phone and phone records of certain targeted individuals, among other things.
