Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Che Odom
Jan. 13 — Attorneys consulting companies on proxy statements suggest that boards address cybersecurity in a detailed way this season to demonstrate to shareholders that directors will be vigilant against hackers.
“It is best to go into your proxy solicitation with a fully loaded proxy statement,” Rhonda L. Brauer, senior managing director of corporate governance at Georgeson Inc., said during a Jan. 13 webcast sponsored by Georgeson and Latham & Watkins LLP.
Companies should address cyber risks and consider going “beyond what is legally required” to address concerns, she said.
The webcast, “2015 Proxy Season: What You Should Know as You Draft Your Proxy Statement and Prepare for Your Annual Meeting,” was held a day after U.S. Central Command was forced to take its Twitter account offline after hackers commandeered it to post threatening messages to U.S. service members .
Although the Securities and Exchange Commission has not issued any new disclosure requirement concerning cyber risks, President Obama and members of Congress are discussing the need for further legislation in this area, Steven Stokdyk, a partner in Latham's Los Angeles office, said during the webcast. Companies must stay on top of the political debate in Washington, as well as whatever concern shareholders express about the issue, he said.
“It is all over the news today, with Sony” and the Twitter hack, he said. “We are carefully focused on adding additional thoughts” in communications with shareholders.
Although companies should avoid generic disclosure, they can provide information that allows investors to appreciate the nature of the risks without compromising a company, said Stokdyk, global co-chair of Latham's public company representation practice.
Businesses in especially vulnerable industries should consider offering more detailed disclosure to stockholders, he said.
When it comes to cybersecurity, investors are likely to look closely at director qualifications for those who may be able to question management and outside experts on relevant matters, he said.
At a minimum, boards should be familiar with how their companies match up with the risk management framework created by the National Institute of Standards and Technology, he said, which may begin to appear in shareholder proposals, as well as more recommendations from Institutional Shareholder Services Inc.
Georgeson is a provider of strategic shareholder consulting services to corporations and shareholder groups.
To contact the reporter on this story: Che Odom in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan Tuck at email@example.com
An archive of the webcast is available at http://www.lw.com/events/2015-Proxy-Season-Drafting-Proxy-Statement-and-Preparing-for-Your-Annual-Meeting.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)