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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (167280)	7/2/2002 3:35:21 AM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 186894

Amy, The most talked about proposal is the one put forward by the NYSE. It requires that a majority of directors be independent and that the ones on the compensation and audit committees all be independent. It would not prevent Andy Grove from serving on the board, but it would prevent Craig Barrett from packing the board with people he knew would not challenge him and it would not allow his colleagues or business associates to be the ones who determine his compensation. I think these are pretty much a "done deal" as far as NYSE companies are concerned and it is likely that other companies that want to appear responsible are going to follow somewhat similar procedures whether required to or not. Personally I think it should not be necessary. Shareholders have the legal right to elect the directors they want and they should have the sense to elect good directors rather than the CEOs buddies. The reality today is that most institutions have no interest in doing this, thus we see proposals like this to "fix" the problem. The full text of the recommendations are at nyse.com A few excerpts: 1. Require listed companies to have a majority of independent directors. Effective boards of directors exercise independent judgment in carrying out their responsibilities. We believe requiring a majority of independent directors will increase the quality of board oversight and lessen the possibility of damaging conflicts of interest. We recognize that companies that do not already have majority independent boards will need time to recruit qualified independent directors. We believe that two years should be ample. Accordingly, we recommend that all currently listed companies be required to achieve majority-independence within 24 months of this rule’s enactment. Companies newly listing must comply within 24 months. Additionally, given the importance of majority-independent boards, a company must publicly disclose when it becomes compliant with this requirement. 2. Tighten the NYSE definition of “independent director.” * No director qualifies as “independent” unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Companies must disclose these determinations. * In addition: – No director who is a former employee of the listed company can be “independent” until five years after the employment has ended. – No director who is, or in the past five years has been, affiliated with or employed by a (present or former) auditor of the company (or of an affiliate) can be “independent” until five years after the end of either the affiliation or the auditing relationship. – No director can be “independent” if he or she is, or in the past five years has been, part of an interlocking directorate in which an executive officer of the listed company serves on the compensation committee of another company that employs the director. – Directors with immediate family members in the foregoing categories must likewise be subject to the five-year “coolingoff” provisions for purposes of determining “independence.” ... 3. Empower non-management directors to serve as a more effective check on management. * The non-management directors of each company must meet at regularly scheduled executive sessions without management. * The independent directors must designate, and publicly disclose the name of, the director who will preside at the executive sessions. ... 4. Require listed companies to have a nominating/corporate governance committee composed entirely of independent directors. ... 5. Require listed companies to have a compensation committee composed entirely of independent directors. ... 6. Add to the “independence” requirement the following new requirements for audit committee membership at listed companies: * Director’s fees are the only compensation an audit committee member may receive from the company. * A director who meets the definition of “independence” mandated for all audit committee members, but who also holds 20% or more of the company’s stock (or who is a general partner, controlling shareholder or officer of any such holder) cannot chair, or be a voting member of, the audit committee. * The audit committee chair must have accounting or related financial management expertise. The NYSE has more stuff about this at nyse.com