Maintaining independence and avoiding conflicts of interest at the board level is a significant challenge, says Daniel Cooperman, Of Counsel with the Bingham McCutchen law firm. Cooperman served as senior vice president, general counsel and secretary of Apple Inc. and senior vice president, general counsel, and secretary of Oracle Corp. He is the immediate past President of the Association of General Counsels, served on the board of several software trade associations, is a director of emerging technology companies, and teaches at Stanford Law School.
In this four-part video conversation with Kirk Hanson, executive director at the Markkula Center for Applied Ethics, Cooperman details the duties and responsibilities of corporate board members to establish and protect their independence, and the importance of avoiding actual and perceived conflicts of interest. The two explore both the legal and ethical requirements of public board members in a complex and inter-related world.
Vice Chancellor of the Delaware Court of Chancery Sam Glasscock III spoke to the Center's Business and Organizational Ethics Partnership (BOEP) yesterday about the history and meaning of a chancery court and the kind of issues the court is currently hearing.
Other speakers at the BOEP's quarterly meeting included Joe Grundfest, former SEC commissioner and professor at Stanford Law School on "The Nexus of the Law and Ethics," and Bob Vanourek, former CEO of Sensormatic, on "Building Excellent, Ethical, and Enduring Organizations."
Hank Shea, a former Department of Justice Attorney who brings white collar felons to universities across the country, gave a presentation with David Logan, a former CEO and public official whom Shea prosecuted for bank fraud.
The BOEP meets quarterly to address emerging issues in business ethics. Contact Jim Balassone for more information.
Corporate directors can take action to prevent or abate major ethical meltdowns at their companies by being alert to red flags that show an organization is in trouble. In a joint program this month with the National Association of Corporate Directors, Silicon Valley, the Ethics Center offered a panel discussion on eight signs that a company may be headed for ethical meltdown.
Panelists included Katie Martin, partner at Wilson Sonsini Goodrich & Rosati, Vince Vannelli, founder of KPG Ventures, Skip Battle, chairman of Fair Isaac and Co., and Jim Balassone, executive-in-residence at the Ethics Center. Their presentation was informed by the work of Marianne Jennings.
Like humans, companies need both a heart and a soul, says Richard Levy, chairman of Varian Medical Systems. The heart keeps the human and the company alive and functioning, but that, in itself, isn't enough. The soul, which gives meaning to human life, focuses the attention of a company—its management and its board-- beyond simply making money to doing something to promote the common good.
In three video conversations with James Balassone, executive-in-residence at the Markkula Center for Applied Ethics, Levy details the duties and responsibilities of corporate boards: first and foremost, to look after the interests of shareholders, oversee financial performance and compliance, weigh in on strategy when necessary, understand risks, and evaluate, compensate and hire and fire the CEO and other senior managers. He also discusses how to promote healthy relationships between boards and senior management and clearly defines what should take place in an effective board meeting.
Directors of publicly traded companies can be held legally accountable for three types of activities:
- Mistakes, for which they may face civil penalties
- Outright wrongdoing, for which they may face criminal penalties
- Willful blindness—ignoring red flags signaling fraud—for which they may face civil or criminal penalties
Center Executive Director Kirk O. Hanson talks with former federal prosecutor Hank Shea about how boards of directors can stay out of trouble. Shea is a senior distinguished fellow at University of St. Thomas School of Law and visiting professor at University of Arizona School of Law.
About one million corporations have their legal headquarters in the state of Delaware, including more than half of the Fortune 500. In "Why Corporations Choose Delaware," corporate lawyer Lewis S. Black writes, "I think the answer is not one thing but a number of things. It includes the Delaware General Corporation Law which is one of the most advanced and flexible corporation statutes in the nation. It includes the Delaware courts and, in particular, Delaware's highly respected corporations court, the Court of Chancery."
The Markkula Center for Applied Ethics, in cooperation with the SCU School of Law and several local law firms, has brought several members of the Delaware courts to campus as Distinguished Visiting Scholars to explore the intersection between corporate law and ethics. This series of videos captures highlights from those visits.
Steele, who spoke at a recent meeting of the Center's Business and Organizational Ethics Partnership, traced the origin of the concept of fiduciary duty to common law, stretching back to Roman times. The Delaware court, which is a primary source of corporate law in America, recognizes three components of fiduciary duty, he said: the duty of loyalty, the duty of independence, and the duty of care.
What are the characteristics of an effective member of a corporate board? What should be the relationship between the board and the CEO? How can a corporate director get sufficient information to make good decisions?
In this three-part video series, Bob Finocchio, head of the board of trustees at Santa Clara University, and Lon Allan, Chairman Emeritus, Silicon Valley NACDSV, discuss how the behavior of individual directors can promote effective governance. Both men serve or have served on multiple corporate boards.
These videos are a joint project of the Ethics Center and the National Association of Corporate Directors, Silicon Valley.
If you're used to texting, e-mailing, or otherwise multi-tasking while attending important meetings, F. Daniel Siciliano and Katharine Martin have news for you: Failure to pay attention to the task at hand is not only an ethical problem, but, if you're a corporate director, it may also become a legal one.
Saracino and Martin spoke on the risks of multi-tasking at a recent meeting of the Center's Business and Organizational Ethics Partnership.