Chad King of King & Fisher in Dallas offers some timely advice on how companies can protect their information systems in an environment in which it is becoming increasingly difficult to stay ahead of cyber intruders.

He begins by recounting the story of how anti-virus and security company Kaspersky Lab was alleged to have been cooperating with the Russian Federal Security Service (FSB), the name of the Russian counterintelligence agency and successor of the KGB, since 2009. The U.S. federal government mandated that all software made by Kaspersky Labs be removed from government computer systems. Retailers such as Best Buy are also taking steps to remove Kaspersky Labs products from their retail offerings.

“Although it’s unlikely we will ever have a definitive answer about whether Kaspersky Labs is gathering data for the Russian FSB, this incident highlights a growing concern that foreign governments might be collaborating with software and hardware companies to spy on other governments, corporate enterprises, and consumers. How can companies protect themselves in this environment?

His article offers five points to consider to deal with the threat.

Read the article.

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The National Association of Corporate Directors annually collaborates with its five strategic-content partners to provide guidance for boards of directors on a hot-button governance issue. This year’s topic is ESG, or environmental, social, and governance oversight — an issue that strongly impacts corporate sustainability.

The NACD has made the report available for downloading at no charge.

The report provides ESG guidance in order to help directors:

• ensure the board and executive team have the right skills for driving ESG performance;
• connect environmental and social issues to the company’s business mission;
• communicate the company’s environmental and social efforts to investors, and to stakeholders;
• understand the financial impact of climate risks and improve related disclosures; and
• link compensation to financial results and ESG factors.

Download the report.

Bloomberg Big Law Business will host its 3rd annual Summit in Manhattan.

The event will be Wednesday, May 24, 2017, at Bloomberg LP, 731 Lexington Ave., New York, NY 10022, from noon until 6 p.m. A networking lunch and cocktail reception will be included.

Attendance is by invitation only. Anyone interested in an invitation may submit a request.

The agenda is available online.

Some of the speakers will include:

• Peter Beshar, Executive Vice President and General Counsel, Marsh & McLennan Companies
• Matthew Cooper, Executive Vice President, Head of Legal, Capital One Financial
• Stephen Cutler, Vice Chairman, JPMorgan Chase
• Eric Grossman, Chief Legal Officer and Managing Director, Morgan Stanley
• Deborah Kaback, Chief Legal Officer, Oppenheimer Asset Management
• Aristedes Mahairas, FBI Special Agent in Charge, Special Operations/Cyber Division, New York Office
• Manisha Sheth, Executive Deputy Attorney General for Economic Justice Division, Office of the New York State Attorney General
• Patrick Speice, Assistant General Counsel, Regulatory and Compliance, United States Steel Corporation
• Mary Jo White, Senior Chair, Debevoise & Plimpton

Request an invitation here.

A group of 12 prominent corporate executives and financial leaders recently a discussion of common-sense principles companies and boards of directors can use to follow the best practices of corporate governance.

The leaders included Warren Buffett, CEO of Berkshire Hathaway, and Jamie Dimon, CEO of JPMorgan Chase & Co. Others were chief executives of General Electric, General Motors, Verizon, BlackRock, Vanguard, and more.

Topics include the independence and diversity of corporate boards, breaking away from the obsession with quarterly financial forecasts, accounting standards, and engagement between a company and its shareholders.

“Their stated goal was to offer a set of recommendations on which they found common ground, in the hope of promoting further conversation on corporate governance and ultimately stimulating economic growth,” as described by The New York Times. “Indeed, the principles appear premised on the crucial, if understated, connection between effective corporate governance and economic prosperity. In that regard, they reflect the frustration that governance-based debate among investors, corporate leaders and other stakeholders has failed to produce the kind of change needed to support economic strength.”

Download the principles.

Reuters is reporting that the U.S. Department of Justice has begun a rare internal examination of what went wrong in the prosecution of a controversial drug conspiracy case against delivery service Federal Express, according to the department’s top prosecutor in San Francisco.

“The review plays into a broader debate about how the government prosecutes suspected corporate wrongdoing and could influence its approach to such cases in the future,” write Dan Levine and David Ingram.

FedEx was indicted in 2014 on charges the company had knowingly helped Internet pharmacies ship illegal pills. Then, four days into a trial in San Francisco last month, the DOJ dropped all charges, a decision the judge praised, saying it was clear FedEx was “factually innocent.”

The new review will examine why prosecutors brought the case, what oversight supervisors provided and what role officials in Washington D.C. played.

Read the article.

Limited Liability Companies, or LLCs, are now the most popular legal entity for organizing businesses in the United States, according to a new report issued by Berkman Solutions.

“While it is tempting to conclude that S Corporations are substantially more popular than LLCs, this conclusion is based on the total number of legal entities. S Corporations have a more than 15 year head start on LLCs. Adjusting for that head start, the data reveals that LLCs are eclipsing S Corps,” according to Berkman’s analysis.

“Looking at the year-over-year net change in tax filings demonstrates that LLCs have a slight edge over S Corporations since 2004, except for 2006,” it continues. “The year-over-year net change captures the addition (or reduction) in tax returns from the prior year by legal entity type.”

Read the article.

Knowledge@Wharton and AKO Foundation have published the first of four reports designed to explore how firms can enhance their understanding and implementation of corporate governance.

The report, which features insights from Wharton faculty and other experts, considers five key topics: the relationship between corporate governance and the purpose of a firm; whether firms have a moral responsibility; the link between corporate governance and compliance programs; the impact of corporate culture; and the role of leadership and boards of directors.

Future reports in this series will examine themes such as moral philosophy, corruption and business for peace.

Download the report.

The National Association of Corporate Directors’ 2016 edition of Governance Challenges combines guidance from five strategic content partners of the NACD with broad M&A expertise. The report addresses the importance of early board engagement in strategy, the need for proactive dialogue with all key stakeholders, and the imperative to balance short-term and long-term goals throughout the M&A process.

A complimentary copy of the report is available for download.

Boards can use this new resource to:

• identify “drive and drag” factors that can advance or delay transaction results;
• monitor key aspects of the due-diligence process before approving the deal;
• understand the tax implications of a prospective transaction;
• consider exposure to risk from antitrust liability, cybersecurity challenges, and environmental liability; and
• select and retain talent and adjust compensation arrangements during the leadership change.

Download the report.

The key challenge for compensation committee members continues to be to approve compensation programs that directors believe are right for their companies, while maintaining an understanding of shareholder views and an ability to communicate the appropriateness of their compensation decisions sufficient to avoid criticism that could undermine directors’ abilities to act in their company’s best interest, according to a post on the Harvard Law School Forum on Corporate Governance and Financial Regulation.

In the post Compensation Season 2016, the authors identified key considerations for compensation committees in the upcoming compensation season.

Read the article.

The National Association of Corporate Directors (NACD) has published for download “How to Ensure Organizational Resiliency,” a featured article in the latest issue of NACD Directorship magazine.

The article explores what directors think boards can do to ensure a company’s survival — despite high rates of business failure.

NACD Directorship magazine, a leading source of boardroom intelligence and corporate governance information for board directors, is an exclusive benefit of NACD membership, but General Counsel News readers are invited to download a complimentary copy.

Download the article.

TMF Group has made available for free download the new Benchmark Complexity Index 2015 – a global study of corporate governance.

TMF Group’s report ranks jurisdictions according to their complexity from a corporate secretarial perspective, and is based on results from a survey conducted across TMF Group offices. In addition, it summarizes and comments upon regional differences, providing insight into the factors which influence complexity in corporate secretarial compliance around the world.

The company says the report covers:

• The relative complexity of maintaining compliance around the world.
• What’s driving the changes in different jurisdictions.
• The value of local knowledge and expertise in understanding the nuances of a market complexity.

Download the report.

The National Association of Corporate Directors (NACD) recently released the 2015-2016 NACD Public Company Governance Survey, which compiles benchmarking data on governance trends and practices from more than 1,000 public company governance corporate directors and governance professionals. A few of the key findings from this year’s survey include:

• Almost half of boards are unprepared to respond to activist investors.
• M&A is now a leading board priority.
• Executive compensation is changing in response to shareholder pressure.

Full results of the survey are available exclusively to NACD members, but you are invited to download a complimentary copy of the highlights from this year’s report as a sample of the valuable insights NACD provides to its members, the association says.

Download the highlights.

The pursuit of legitimate corporate strategic goals is increasingly running into the concerns of corporate officers who see themselves at greater personal legal risk if there are ever allegations of corporate misconduct, writes Michael W. Peregrine, a partner at the law firm McDermott Will & Emery in an article in The New York Times.

He writes that new enforcement policies from the Justice Department and Securities and Exchange Commission regarding individual culpability of corporate officials contributed to this tendency.

He outlines some that proposals that “should help reduce the anxiety of gatekeepers and other management team members concerning their personal liability exposure. In so doing, these steps may remove unnecessary barriers to the use of corporate strategies.”

Read the article.

Shearman & Sterling has published its 2015 Corporate Governance & Executive Compensation Survey of the 100 largest U.S. public companies.

This year’s Survey, 13th in the series, examines some of the most important governance and executive compensation practices facing boards today and identifies best practices and merging trends. Senior partner Creighton Condon writes that the analysis provides insights into how companies approach governance issues and will allow readers to benchmark their companies’ corporate governance practices against best practices.

An introduction to the survey is published on the website of the Harvard Law School Forum on Corporate Governance and Financial Regulation. And Shearman & Sterling has published the complete report on its website.