Developments in director duty paradigms, shareholder challenge processes, and director compensation practice keynote the 2018 edition  

 Thomas Dougherty has spent his career in boardrooms and courtrooms of America addressing the standards applicable to directors’ exercise of their fiduciary duties in the varied circumstances in which they act.

For over 20 years, he has shared his experience and insights as the author of The Directors’ Handbook, a “gem” that serves as a comprehensive primer and hands-on guide, and provides thoughtful commentary on the latest challenges faced by boardroom directors.

The 2018 Edition: Developments in the duty of directors, proxy advisor practices,  and director equity awards

Dougherty addresses a number of timely topics in this latest update. In the 2018 Foreword, he examines director duties under the very different corporate governance frameworks adopted by Delaware for companies incorporated there, as contrasted with those of Massachusetts, Texas, Ohio, and other states. Significant differences in the requirements for shareholder challenges to director decisions provide food for director thought about state of incorporation, too often taken for granted.

The Foreword also examines the role and impact of proxy advisory firms, activist agendas, pre-populated proxies and the narrowing of proxy participation, and alerts directors to new limits on director compensation awards.

The 2018 edition also provides substantial updates to reflect recent developments in corporate governance:

  • Discussion of the two, very distinct corporate governance models that differentiate director duties for corporations incorporated in Delaware and states that follow its paradigm versus that of Massachusetts, Texas, Ohio and other states;
  • Expansion of discussion on board minutes and directors’ notes;
  • A new section on the Public Company Accounting Oversight Board’s (PCAOB) new model for auditor reports intended to make auditor reports more useful to investors;
  • Significant updates regarding director compensation, including nonemployee director compensation, and developments since the SEC rules amendments and Dodd-Frank enactments;
  • New discussion on the Securities and Exchange Commission no-action process regarding proxy access proposals;
  • Commentary on the impact of the 2017 Tax Reform Act, withdrawal from the Trans-Pacific Partnership, NAFTA renegotiation and Brexit;
  • Expansion of discussion on board minutes and directors’ notes;
  • A look at the recent Delaware Supreme Court Dell decision regarding highest share value.

Since the book’s inception, Dougherty has captured the essence of sound corporate governance in his frontispiece: “Tell me about your directors’ vision and vigilance, and I will tell you the future of your company.” But this year, he decided it was time for a change: “Tell me about your directors’ vision, vigilance and diversity, and I will tell you the future of your company.”

Dougherty explains the change in the Foreword to the newly released 2018 Edition. While diversity and empowerment are making positive progress in the legal space, he notes, boardrooms are lagging behind. He emphasizes the merits of board diversity, and asks companies and their boards to take decisive action.

“I have witnessed the benefits of men and women directing companies whose vision and vigilance derives from their diverse experience, not merely their relevant expertise,” he writes. “Board nominating committees need to act on gender and ethnic diversity as search criteria, not merely include those words in a paragraph of the committee charter.”

“An invaluable guide”

Corporate governance experts have praised The Directors’ Handbook for its in-depth examination of boardroom issues. Lucian Bebchuk, director of Harvard Law School’s Program on Corporate Governance, calls it “an invaluable guide to directors and anyone interested in the critical role that directors play in our corporate governance.”

Dougherty offers directors insight on how to best handle hostile takeover attempts and proxy battles, and addresses the creation of an audit committee charter, crisis management, and director and officer insurance. Directors can find up-to-date information about majority (rather than plurality) voting for directors; staggered board repeals; best practices for handling restatement crises; the role and practice of the corporate secretary; and the political economy of corporations and corporate governance approaches around the world. The companion CD ROM contains key corporate governance regulations, case law and other relevant resources.

The Directors’ Handbook is available as a softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.

CSC® Publishing: The Directors’ Handbook