Board Matters Quarterly Critical insights for boards and audit committees

Transcription

1 EY Center for Board Matters Board Matters Quarterly Critical insights for boards and audit committees April 2015

2 2 Board Matters Quarterly April 2015

3 April 2015 Board Matters Quarterly In this issue 04 Women on US Boards: what are we seeing? Despite increasing recognition for the value women bring to corporate boards, US companies continue a slow march toward gender diversity. 07 Insights from our audit committee networks Board composition was a common theme discussed during our audit committee network meetings earlier this year. We provide an overview of what members had to say about the importance of diversity and the challenges of creating the right mix proxy season insights We had conversations with 50 institutional investors, investor associations and advisors. We also heard from investors, directors and other stakeholders who attended our proxy season dialogue dinners. Using these insights and our proprietary corporate governance database, we provide a four-part preview of this year s proxy season. 09 Spotlight on board composition Some investors believe companies are not making a compelling case in the proxy statement for why their directors are the best candidates for the job. 13 Optimizing proxy communications Many institutional investors rely on a company s proxy statement to evaluate corporate governance and make proxy voting decisions and they would like to see more. 11 Shareholder activism: an engagement opportunity When companies engage with long-term institutional investors and respond to their concerns, those same investors can be better positioned to support a company in an activist situation. And with shareholders. 15 Shareholder proposal landscape for 2015 Shareholder proposal submissions remain high, but many investors prefer to reach an agreement without the proposal going to vote. We take a look at how that s playing out this year and highlight shareholder proposals to watch. Board Matters Quarterly April

4 Women on US boards: what are we seeing? Women on US boards: what are we seeing? Despite the value of bringing more women onto corporate boards being increasingly recognized, US companies continue a slow march toward gender diversity. While expansion of board diversity in the near term or to compete with public sector approaches being taken in other markets. This report looks at gender diversity in US boardrooms at the time of their 2014 companies. It is based on the EY Center for Board Matters proprietary corporate governance database. It is also part of the Center s ongoing board diversity series and follows Diversity drives diversity: From the boardroom to the C-suite (2013) and Getting on board: Women join boards at higher rates, though progress comes slowly (2012). For EY s global perspective, see Women on boards: global approaches to advancing diversity (2014) and Women. Fast forward This year, we highlight three observations about gender diversity on US corporate boards: 1. Increasing board size to add female directors is common 2. Female directors bring different experience to the board 3. Gender diversity is rising, but slowly 1 Increasing Observation: board size to add female directors is common Women as a percentage of new board members across held directorships since 2013.* held by women last year did so by increasing board size. Women as a percentage of new board members at S&P 1500 companies 14% 16% 18% 21% 18% 23% It also explains why the larger the board size, the more likely it is for the board to include female directors. those with 12 directors. * Based on a subset of companies that held annual meetings in 2013 and % of female directors by board size 7 10% 8 14% 9 16% 10 17% 11 17% 12 19% % 4 Board Matters Quarterly April 2015

5 2 Observation: Female directors bring different experience to the board multiple company boards than their male counterparts. They are also less likely to be current CEOs. Differences between female and male directors at S&P 1500 companies in 2014 Female 42% 30% Male 12% 21% 16% Female directors 84% Male directors Under the age of 60 49% 11% 33% 31% Serve on more than one public board 49% 40% Currently seated as both CEO and director 5% 18% Board Matters Quarterly April

6 Women on US boards: what are we seeing? 3 Gender Observation: diversity is rising, but slowly Despite efforts to advance board diversity by institutional investors and other groups, progress toward gender parity on US boards is minimal. Indeed, the proportion of women on boards has board seats are held by women less than the proportion of seats held by directors named John, Robert, James and William. are held by women. Percentage of board seats held by women since 2006 S&P % S&P Composite 1500 S&P 500 Fortune % 15% 16% % 19% Boards of larger companies are least one woman on their boards, only 81% companies have at least one woman on their boards In general, more women are being appointed to board and executive leadership positions though change continues to be gradual. S&P 1500 board and executive positions held by women in 2014 Positions held by men 84% 86% Director 14% % 2014 CFO 90% 91% 9% 10% 93% 96% Independent lead director 4% 7% CEO 94% 96% 4% 4% 99% 96% Independent chair 1% 4% Positions held by women % of boards with only one female director 10% 37% 27% Audit committee Chair Financial expert Member 15% Compensation Committee 16% Chair 12% 17% Member 16% Nominating Committee Chair 16% Member 17% % of boards with two or more female directors 44% 69% 88% S&P Composite 1500 S&P 500 Fortune Board Matters Quarterly April 2015

7 Insights from our audit committee networks The challenges of balanced board composition The makeup of the board emerged as a common theme as regular series of candid discussions. Directors are increasingly focused on the challenge of creating and sustaining the right mix of skills and experience in the boardroom in the face of rapidly One external challenge arrives courtesy of the proxy process, which may introduce candidates proposed by outside parties season, members considered how to establish proxy access (for shareholders to nominate director candidates directly) in a way that balances shareholder rights with current alternatives, which already include candidate suggestions from large shareholders. Some companies have voluntarily adopted bylaws that permit than three years to nominate candidates who would make up no concern that proxy access will complicate the board s aim to Other challenges for board and audit committee composition focused on tenure. Members agreed that director continuity is important for every company and were therefore skeptical about average tenure of a CEO is now only two to three years, then directors play an important role in maintaining continuity for the company. Desire for continuity was likewise behind many come off of the board, others remain. Members also discussed the importance of a diversity of expertise and background on the board. One member said, audit committee. It gives a different perspective on the problems the company faces. Members also pointed to the board s assessment process as a vehicle for examining and encouraging diversity of thought, a necessary element of dynamic and effective governance. it also carries implications for board composition. Directors director. One audit committee chair worried that any digital or IT such targeted issues. Yet some directors preferred that cyber about recruiting a programmer. We want someone with both IT and strategic level experience like a CEO from a tech company. With demands for board oversight increasing as the environment continues to present challenges for companies, having the best mix of skills and perspectives on the board will continue to be audit committee chairs across the winter meetings, including oversight of corporate and compliance culture, data analytics and an update on tax issues, will be available in the May issue on effective corporate governance and commitment to bringing together and engaging with boards and audit committee members. Members include more than 80 audit committee chairs, who together sit on the boards of more than 120 public companies. Tapestry Networks and EY are independently owned and controlled organizations. This article was prepared by and used with permission from Tapestry Networks. Tapestry Networks. Board Matters Quarterly April

8 2015 proxy season insights 8 Board Matters Quarterly April 2015

9 institutional investors, investor associations and advisors about their corporate governance views and priorities. We also gained insights from investors, directors and other stakeholders through our proxy season dialogue dinners. 1 In addition to our outreach, our preview draws on our tracking of governance trends and emerging developments through our proprietary corporate governance database. 2 This year, Spotlight on board composition, Shareholder activism: an engagement opportunity, Optimizing proxy communications and Shareholder proposal landscape for Spotlight on board composition renewal are once again in the spotlight for a number of reasons. have the skill sets and expertise needed to provide strategic counsel and oversee key risks facing the company, including environmental and social risks. The continued lack of turnover on many boards and slow progress on increasing diversity, including by gender, race and ethnicity, are bringing director tenure and board succession planning under scrutiny. make it easier for shareholders to nominate their own candidates to the board. 3 These factors make it increasingly important for boards to explain their composition in a compelling way. Meeting this expectation is made all the more challenging by the fact that investors are assessing board composition using different factors. Room for improvement in making the case for board composition Despite investor acknowledgement that some leading companies we spoke with believe companies are generally not making a compelling enough case in the proxy statement for why their Do most companies do a good job of explaining why they have the right directors in the boardroom? Views vary on mechanisms to trigger board renewal When we asked investors what mechanisms boards can use to rigorous board evaluations as the optimal solution and director retirement ages as the least effective. However, views around the different mechanisms and how they should be used vary as does how investors approach the topic of tenure altogether. More than three-fourths of the investors we spoke with believe companies are not doing a good job of explaining why they have the right directors in the boardroom. Companies can improve disclosures by making to oversee key areas of risk for the company and Providing clarity around how board candidates are board diversity goals may also strengthen Rigorous board evaluations, including assessing the performance of individual board members, as well as the performance and composition of the board and its committees, are generally considered valuable mechanisms for stimulating thoughtful board turnover, but views about other approaches (e.g., term limits) differ widely. Board Matters Quarterly April

10 Which of the following mechanisms is the most effective way to stimulate board refreshment? Most Effectiveness Least Rigorous board evaluations stimulates meaningful board refreshment but may challenge the board s collegiality. Director term limits Blunt instruments, such as term limits, directors. However, term limits or term limit guidelines provide a potential need for fresh perspectives. Classifying long-tenured directors as not independent Some investors believe that, after a certain point, a director s ties to the the director s independence. Others argue that the point is to ensure independence from management, and management could have undergone dynamic changes throughout a director s tenure. Director retirement age In general, investors do not believe retirement ages prompt thoughtful and regular board refreshment. Some investors evaluate tenure and director succession planning performance and decisions. The commentary below represents investor opinions on each mechanism. One of the top takeaways from our dialogue dinners was the importance of robust board evaluations, including evaluations of individual board members, to meaningful board refreshment and board effectiveness. Some directors noted the value in board assessments and in changing evaluation methods as appropriate to reinvigorate the process. Some also noted that board evaluation effectiveness relies on the strength of the independent board leader leading the evaluation. When it comes to how boards manage director tenure internally, setting expectations up front that directors board service will be for a limited amount of time not necessarily until they reach retirement age is important. We ve heard from some directors that having periodic conversations with individual board members about their future on the board is valuable and can help Given investors increasing focus on board composition, companies may want to review and enhance proxy statement disclosures to diversity and succession planning is transparent. Beyond disclosure, ongoing dialogue with institutional investors that involves independent board leaders may allow for a rich discussion around enhanced communications around director succession planning, companies may head off investor uncertainty and temptations to Three ways companies can enhance board composition disclosures 1. strategy and risk Be explicit about why the director brings Companies should not assume that the connection between a director s expertise and the company s strategic and risk oversight evaluating boards holistically. 2. Provide more disclosure around the director recruitment process and how candidates are sourced and vetted Disclosing more information around the nomination process the vetting process entailed, etc. can mitigate concerns about the recruitment process being insular and informal. 3. Discuss efforts to enhance gender, racial and ethnic diversity in the gender, racial and ethnic makeup of the board. Disclosing a formal process to support board diversity, including providing clarity around what is considered an appropriate level of diversity, can highlight efforts to recruit diverse directors. tool but is not the only way to convey a thoughtful approach. board s succession planning and refreshment process and any recent composition changes can also be effective. Beyond disclosure, engagement can provide investors a valuable dimension with shareholders can provide further insight into board dynamics, individual director strengths and composition decisions. 10 Board Matters Quarterly April 2015

11 Shareholder activism: an engagement opportunity The recent surge in shareholder activism 4 continues to keep companies are taking proactive measures to prepare for term institutional investors. Based on what we re hearing from in that they foster constructive relationships and alignment with key shareholders. When companies engage with long-term institutional investors and demonstrate responsiveness to their concerns, those same investors are better positioned to support the company in an activist situation and may prove to be the company s strongest allies. Do long-term institutional investors believe the rise in activist investing is helping their long-term portfolio value? 11% Yes Some investors we spoke with indicated that activism has had a positive impact on their portfolio value, while others pointed to a more general sense that activism has pushed companies to sharpen their game and challenge for shareholders. Of course, whether an investor is indexed or actively managed may shape his or her perspective of activism. Unlike passive investors, actively managed investors can choose to exit an investment at will. 72% It depends Most of the investors we spoke with over the long term depends on the particular circumstances involved. Some investors suggested that activists are incorporating governance changes as an afterthought to appeal to long-term institutional investors not out of a genuine commitment to enhance corporate governance. there is value to activism, while in other instances there is not. These investors generally stressed that in activist situations, they closely evaluate the activist s track record at other companies, the track record of the company (including accountability to shareholders), whether the activist s strategy and goals align with their own and/or whether they consider the particular agenda the activist is advancing to be the right solution. Many investors say that they talk to both sides in an activist situation the activist and the company to get a full picture before developing their views. 17% No Some investors we spoke with suggested that, notwithstanding some these investors also raised concerns that the surge in activism has created termism and creating distraction) and could have damaging impacts on stakeholders and the broader economy. Board Matters Quarterly April

12 Shareholder engagement may help companies when dealing with activists including a better understanding of investor perspectives and making. Based on what we heard from investors in our investor outreach, as well as from some directors and other stakeholders during our proxy season dialogue dinners, more companies are importance when it comes to activism. term shareholder views are aligned, those shareholders can be a tremendous ally for the company in an activist situation, including actively reaching out to other shareholders to argue in support of management s position. Such alignment may be reached through effective engagement. Do long-term institutional investors believe the rise in activist investing is supporting their governance initiatives? 18% Yes have put pressure on companies to be more receptive to investor concerns around corporate governance topics and have driven more are merely using governance changes to secure investor support, they nonetheless appreciate that the result is, in their view, better governance practices and governance being elevated as a concern. 67% It depends When evaluating an activist campaign, many investors consider the company s record of responsiveness to their concerns and will be less inclined to actively support a of investors stressed that from the moment the company gets a call from an activist, the company should be consulting with its Engaging with activists allows the company to consider their credibility and appeal, as well as the merit of their ideas. In developing strategies to deal with activism, companies may shareholders to build relationships, demonstrate responsiveness and gain insight into shareholders evolving governance views. and portfolio managers who are making investment decisions are often not the same individuals evaluating a company s governance and making proxy voting decisions. Including CFOs in engagement conversations about governance and board performance may add useful perspectives that tie into overall company performance and strategy. Most investors said that they evaluate activists and activist situations they are generally suspicious of the motives of activist investors. 15% No making governance changes in response to an activist, at that point, it is too late the company s credibility on governance has already been lost. Some investors also criticized boards for spending money and effort to shore up defenses instead of asking themselves if they re doing enough term shareholders. 12 Board Matters Quarterly April 2015

13 Optimizing proxy communications trends are sharpening company messaging to investors, while other disclosure practices leave investors seeking valuable to investors, EY asked them where they would like to see disclosure enhancements and the kinds of disclosure practices they prefer. Board composition and refreshment, including director diversity and recruitment processes, and executive compensation are the top areas where investors want to see disclosure enhancements. Some directors and corporate secretaries we spoke with are recognizing opportunities to enhance their discussion of board composition in the proxy statement. Extensive boilerplate, legalese and repetition throughout proxy statements, as well as dense, complex Compensation Discussion and Analysis sections, continue to obfuscate company messaging to investors. Graphics, tables, charts and hyperlinks allow companies to share comprehensive information in a more concise and comprehensible way. Letters from independent chairmen, lead directors or the full board allow for direct communication around particular governance challenges and developments and can demonstrate leading governance practices and the strength of independent board leadership. * Investors offered a number of different responses; answers that did not Are there topics where long-term institutional investors would like to see enhanced disclosure in the proxy statement? (percentage of investor respondents)* 51% Board composition, director diversity and skillsets, refreshment See Spotlight on board composition 41% Executive compensation Many investors stressed that compensation disclosures (and compensation programs themselves) should be simple and straightforward for the sake of investors evaluating the plans, directors implementing the plans and executives being compensated under the plans. There was a general consensus that pay disclosures have become dense and uncommunicative. The use of tables and charts, when applicable, was generally preferred. Some investors also expressed interest in seeing more realized/realizable pay disclosures and additional clarity around how the goals of the compensation program align with company strategy, including sustainability goals. 22% Board evaluations Many investors acknowledged the litigation risks around disclosing substantive details but expressed an interest in increased transparency based? Is it facilitated by an independent third party or internally facilitated? What is the role of the independent chair or lead director? How often does it occur?). To the extent that boards can comfortably disclose any visible changes taking place as a result of the evaluation or areas for improvement that are being addressed, those disclosures may 22% Board oversight of risk (including environmental and social risks) Some investors indicated that they want direct communication from the board on what the board sees as the top risks facing the company and how the board controls the risk discussion. Board Matters Quarterly April

14 Making engagement disclosures valuable for investors Many investors said they don t pay close attention to from the year prior). Some of these investors indicated they are generally skeptical of the disclosures and believe engagement into account in their recommendations. Some enhancements that could make engagement disclosures more relevant to the broader investor company s response to the feedback and any changes made as a result, including the rationale behind why the board has determined those changes are in the company s best interest conversations is relayed to the board especially whether any directors were involved including how many shareholders participated and Engagement disclosures that do not align with investors views of how engagement went could negatively impact the at the end of engagement discussions may help ensure that views are aligned when engagement concludes. The proxy statement is generally the main communication document from a company that institutional investors rely on when evaluating corporate governance and making proxy voting decisions. By enhancing proxy statement disclosures, companies can make proxy statements an extension of their shareholder engagement efforts and better position investors to support the board and management. They also provide a foundation for more Three ways companies can optimize overall proxy communications: 1. Explain the rationale behind board and management decisions and discuss unusual governance circumstances or challenges, including addressing controversies in relevant committee reports Use graphics, charts, tables and hyperlinks both within the proxy and linking to other reports (e.g., sustainability reports) to streamline disclosure and make information easier to digest director, a particular committee chair or the board as a whole can be a vehicle for explaining the board s reasoning on governance decisions and developments. 14 Board Matters Quarterly April 2015

15 Shareholder proposal landscape for 2015 Institutional investors are increasingly communicating their expectations around governance through direct engagement shareholder proposals to trigger dialogue and help ensure a topic is raised at the board level. Investors that submit proposals generally view them as an invitation to a discussion, preferring to reach agreement with the targeted company without the proposal going to a vote. If agreement cannot be reached, they generally believe that votes on shareholder proposals provide management with valuable insights into investor views. Overall, shareholder proposal submissions remain high. Engagement continues to result in a withdrawn as companies and proponents reach agreement prior to the proposals going to a vote. Environmental and social topics continue to represent the largest number of shareholder some investors heightened attention to sustainability practices and climate risk, as well as corporate political and lobbying spending. This year, investors increased by four-fold the number of shareholder proposals seeking proxy access, which would enable shareholders meeting certain requirements to add board candidates to management s proxy materials. The campaign for proxy access has ignited the 2015 proxy season, commanding the attention of investors and companies alike. The broad investor support for these proposals and early adoption of proxy access by some leading companies suggest that momentum for this reform is here to stay. The overall shareholder proposal landscape so far last year. The proposal withdrawal rate is on track to match last been made in connection with companies and investors reaching agreement. Such agreement may include implementation of the proposal in part or full, providing additional disclosure or a shareholder proposals, consistent with Shareholder proposal submissions, , full year 2014 as of March 14, 2014 Omitted Withdrawn in proxy Board Matters Quarterly April

16 Most common shareholder proposals to date in 2015 (based on proposal submissions) Disclosure and oversight of lobbying spending 3. Disclosure and oversight of political spending 4. Report on sustainability 6. Set and report on GHG emissions reduction targets 7. Increase diversity on the board 8. Review and report on global labor practices/human rights to include sexual orientation and gender identity Environmental and social topics continue to lead submitted shareholder proposal this year, however, when considered by category, environmental and social topics represent the largest proposal category by the overall number of proposals submitted. To date, shareholder proposals on are also most likely to be withdrawn because of companies environmental and social topics have been withdrawn so far categories. Some commonly withdrawn environmental and social shareholder proposal topics address corporate diversity and emissions reduction, sustainability reporting and disclosure and oversight of political and lobbying spending shareholder proponent categories to date (based on proposal submissions where proponent is disclosed)* 2015 shareholder proposal categories to date (based on proposal submissions) 8% 8% 13% 22% 26% 23% Individuals Socially responsible investors Other (special interest groups, asset managers, etc.) 27% 9% 10% 2% Compensation Environmental/social 52% Routine proposals, including with proponents from a different category. Top four environmental/social sub-categories Climate change/sustainability EEO/corporate diversity 16 Board Matters Quarterly April 2015

17 Shareholder proposals to watch Based on insights from institutional investors, shareholder Adopt proxy access While in recent years shareholders have been sparing in their submissions of proxy access 100 companies this year are facing shareholder proposals seeking implementation of proxy access procedures more than four times the total submitted for vacated proxy access rule. proposals using these terms that went to a vote in 2014 adopted proxy access bylaws in recent years, including at least seven companies so far this season Increase diversity on the board proposals asking for a report on the board s plans to increase diverse representation, as well as an assessment of the effectiveness of these efforts, or adoption of a policy that the board will seek to enhance board diversity beyond current levels to ensure that a wide range of female and minority candidates are included in the pool of candidates nominated. 6 What we re hearing from directors, executives and investors on proxy access Some directors and executives: proposals is worth the risk of potentially straining relationships access and whether adopting proxy access could build goodwill and trust with those same investors Ultimately determined that proxy access was the right thing to do regardless of the impact on relationships with investors Some investors: Believe proxy access is a fundamental shareholder right and a valuable director accountability mechanism to be used sparingly. In fact, many believe this sort of access will promote a level of director accountability that will generally negate the need to use it. company basis shareholder proposals identify gender and ethnicity as a consideration when identifying director nominees. 7 However, that is not 8 Board Matters Quarterly April

18 Proposals related to climate risk shareholder proposals address climate change and related risks and opportunities. These proposals aim to reduce reliance on fossil fuels, accelerate investment in renewable energy and reduce overall carbon emissions. Some emerging proposals are asking companies to address carbon asset risk dividend policies or through their executive compensation urgency around climate change by many investors. SEC suspends no-action relief under Exchange Act Rule 14a-8(i)(9) management proposal. ISS says it will generally recommend a vote against one or more directors if a company omits from its ballot a properly submitted shareholder proposal when it has not secured a voluntary withdrawal of the proposal by the proponent, a it may exclude the proposal. Conclusion Despite increased engagement among large companies and their key institutional shareholders, shareholder proposals remain a primary engagement trigger for many smaller investors who may not be a part of companies typical outreach efforts. Such proposals should be viewed as an invitation to engage and present companies with the opportunity to learn more about the perspectives and Endnotes 1 Chicago and New York, bringing together institutional investors, board members, corporate secretaries and advisors to discuss including board composition and strategies for renewal. 2 Unless otherwise noted, all data is from EY s corporate governance database, which covers more than 3,000 companies listed in the a broad spectrum of institutional investors, investor associations investors, labor funds, public funds, socially responsible investors, respondents are anonymous, and results are presented in aggregate. 3 to adopt proxy access procedures that would permit shareholders meeting certain conditions to add their candidates to management s proxy materials and even more are likely being engaged by their management proposal potentially gives momentum to this investor 2015 proxy season insights: shareholder proposal landscape. 4 company stock for at least three years to nominate directors (up to a limit 6 Institutional Investors Working with Thirty Percent Coalition Continue to Push for Increased Gender Diversity in the Boardroom 7 Let s talk: governance Companies respond to calls for more meaningful governance disclosure, EY Center for Board Matters, May For more information on gender diversity in the boardroom, see Women on US boards: what are we seeing? 18 Board Matters Quarterly April 2015

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20 More insights EY Center for Board Matters Taking charge How boards can activate, t adapt and anticipate to get ahead of cybersecurity risk Contacts Taking charge: how boards can activate, adapt and anticipate to get ahead of cybersecurity risks will likely be a cyber attack. Whether the situation has a severe impact on a company often depends on the board s preparedness. Smart boards know that the best offense is a strong defense, and an organization s value and reputation can hinge on how well it responds to an unforeseen event. Our new report explores the board s role in cybersecurity governance and its oversight of the establishment of a cyber framework. We also share leading practices to help boards anticipate and get ahead of cybersecurity risks. Enhancing audit committee transparency: Themes in audit committee disclosures in Australia, Canada, Singapore, the UK and the US Many audit committees are providing enhanced disclosures about their work, whether in response to investor interest, of View, we reviewed and compared audit committee Ruby Sharma ruby.sharma@ey.com Mark Manoff mark.manoff@ey.com Center for Board Matters on the go Download the Flipboard app on your mobile device and search for EY Center for Board Matters to access current articles on board and governance topics. EY About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may does not provide services to clients. For more information about our organization, please visit ey.com. in the US. About the EY Center for Board Matters Effective corporate governance is an important element in building a better working world. The EY Center for Board Matters is committed to bringing together and engaging with boards, audit committee members and investors to exchange ideas and insights. Using our professional competencies, relationships and proprietary corporate governance database, we are able to identify trends and emerging governance issues. This allows us to deliver and practical tools and analysis to boards, audit committees, institutional investors and others interested in governance topics. ED None This newsletter may include copyrighted materials of third parties. No part of this newsletter may be reproduced, distributed, displayed or published without and the copyright holders of any included materials. Sara Brandfon at sara.brandfon@ey.com. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional ey.com About this publication Board Matters Quarterly is published four times a year and includes articles previously published online and distributed electronically to our subscribers. To access or sign up to receive similar content relevant to board members, please visit ey.com/boardmatters.