How to read
How to brief
Time of day
Grammar, syntax, puntuation, spelling
Strategy during exams
Not chapters 1 to 5
20 minutes of reading time
It will say 15
4169046676 professor leblanc
Test is out of 70 marks
12 choose 7
Comprising 85% of your final grade
There is now a 4691 and 4692
91 is law, and 92 is nfo and governmental
Compensation and ERP.
Sabatical-university will pay the professor to do nothing for a year.
Choose no more than 7
There are four pages in total
Please id on the front page what you are answering
Bring a dictionary
20 minutes to make an outline
The boards role in strategy chapter 6 And value creation for share holders.
Strategy and its importance
Plan to compensation Directors than understand the. Company
Putting strategy on the agenda
Shareholder spring want value maximization
Less compliance, and more strategy
Indent bBcokards and risk governance
Internal audit, erp, control, assurance, insurance, who is accountable and to whom, oversight functions,
Audit, internal control, risk reporting, risk appetite, risk function, realtime risk reporting, linking risk to strategic investment
Boards and non financial risk and performance
Upside and downside
Opportunity and risk
Strategy and risk
One and two. Combined, but non financial
How should non financial issues be handeld both the risk side and compensation side.
Talking about risk and compensation
Customer satisfaction Leading indicators
Employee engagement Leading indicators
Information technology risk
Social media risk
Governance of executive compensation
Draft a memo, i am on the board of a nfp, draft a memo on best practices on executive compensation
hr, succession planning, compensation Use ratios, internal pay equity
You are on the audit comite, and you are overseeing assets in a corrupt country
Component auditor in china is responsible for the external auditor
Audit comitee sits down with component auditor and see if they are competent
Audit comitee retains translator
Documents from china coming to bay and king
Remote control plane that can be seen in toronto
Udit comite with international experience in that jurisdiction Emerging Markets Ontario Securities Commission
Osc.gov.on.ca Research this
The regulators now cooperate with each other, even in different countries.
So now if you are canadian parent with sub in foreign company, canada responsible and if visa versa the canadian
board is responsible
Governance of internal audit
Basel internal audit basel
Proxy access Shareholders being able to nominate up to 25% of the board if you own 3% of the company for three years.
Company pays for expenses
This was under dodd frank. Shareholder"s", independent shareholders can now get together.
Say on pay
Annual general meeting
Restriction on market for corporate control
Part of proxy access is that the company will pay.
Agrium says that
Say on pay
Shareholders every year every yers or three years have an advisory on
Compensation on top 5 directores
98% of say on pay has pass.
You vote, or you withold
You can vote for a director, or withhold
As long as a director gets one withhold vote, they are on the board.
There is no negative vote
As long as you get ONE yes vote, and 99 withhold, that director gets on the board. Majority voting says, you must get 51% YES.
This is now advocated by shareholders
If you get onto the board, you should have more
Direct communication with board and shareholders
This has to increase in canada
Once yearly, or 6 months
Not management but drecctors
Restrictions on market of corporate control
1/3 gets one years, 2/3 one years, 3/3 one years
These are all steps management takes to prevent voting
When you have entrenchment, you can protection of a weak pbard
Hightened voting threshold
75% of shareholders must vote on significant things
Boards sometimes say shareholders cannot communicate with each other
Management says you cant do that, you have to come to the annual meeting.
Why do these things occur, and are they a good thing?
For example, RONA Want to keep americans out because RONA has canadian jobs
Or VIA Rail Crown corp
There could be a policy that are non commercial to keep goods where they are not profitable
Rail, hospitals, etc.
When they say privatize, there is concern
There are reasons why market forces should not be left to the market.
This is why there is restrictions on markets.
If it were completely free, it would cost more
Tax payers want health and education
Teacher and firemen pension
You take all thheir money, and when they retire, you give it back to them.
Activist, smart, clever, active
Boards are more worried about them
They target underperforming companies Institutional investors
Passive in nature
Activist take large positions in less companies
Institutaion take small positions in more companies
Whether they devote shareholders resoruces
Are they too passive
Should passifist should be more less passive
Lets talk about why hes underperforming
If you believe there is a problem, why is do you believe that, why should we support you to get more directors
Why do you want to have those ppl on board
What is it about the background.
Skills knowledge experience of directors
if you believe there is a problem, get ready to make the case.
Therefore, why is ceo bad, and how do directors help
Always stick to the facts
Walk the reader to it.
Present the facts, and not your opinino,, and the reader will make their own opininon
An aligation of RCMP
Ceo is pressuring cfo to sign financials
What procedures should have been on this company
What are best practices for whistle blowwing
Communicated to employee
Educated Code of conduct Annonymity Proper tone at the top
SEC can now go to the company if whistle blower goes to
No retaliation SEC. SEC will give reward to the whistle blower.
Annonymous Onitored Outside Proper inveestigation
Rewarding whistle blower
The outside lawyer is responsible to the audit committee..
No one in management or director should pickup the fone, it should be the outside lawyers.
The person who pays the lawyer calls his lawyer, and that lawyer calls audit comittee
whisltle line 1800 line.
This is because a lawyer working for you, is working for you, no the audit comitee,
who are responsible to the audit comittee Consistency
Outside accountable to audit comite
Worst thing you can do to anyone is retaliate.
If you crunch the person with bad news, you set a precedent.
This is toxic
They will not come forward.
Now there is fraud
Everyone is afraid to talk
Ppl know fraud is happening and they are afraid
So go to regulator, and they will do the audit
Once you go the regulator, it becomes crazy costly.
A culture of integrity
Based on what you say, and what you do.