Forum for Corporate Directors

Vol. 3, No. 3

March, 2008

The Latest FCD News:

Once Again, the DoY Banquet is a Rip-Roaring Success!

The sky was bright all night over the Ritz-Carlton Laguna Niguel on February 27, thanks to the glow of yet another fabulous Director of the Year awards banquet put on by FCD. The sellout crowd thoroughly enjoyed the networking at the cocktail reception and the opportunity to meet and see the warm, human side of five amazing directors who were honored that evening. Plus they saw the rare presentation of an FCD Chairman’s Award to a world class dean from UC Irvine.

This was the 13th annual DoY event and they just keep getting better every year. FCD members were well served by this year’s DoY committee, co-chaired by Rick Rayson from Deloitte & Touche LLP and Terry Goldfarb-Lee from Resources Global Professionals. This outstanding event is yet again the result of a lot of very hard work from the event committee, which includes Debbi Anders, StemtechHealthsciences; Julie Beckley, Union Bank of California; Glen Carlson, from McGriff, Seibels & Williams; Michelle Conry of the FCD staff; John Della Grotta, from Paul, Hastings, Janofsky & Walker; Karen Gifford, Gifford Management & Leadership Coaching; Susan Guenther, Challenger & Gray; Ann Jones, from Jones, Dolan & Company; Michael McCann, IMT Technology; Richard Munro, Invenz, Inc.; John Murphy, Tech Coast Angels; Catherine Rose, FCD executive director; and Roseann Wright, Ernst & Young LLP. Credit is also due the Sponsorship Committee, who did an extraordinary job of fund-raising for this event (and all FCD programs through the year): Karen Gifford; Terry Goldfarb-Lee; Peter Craig, of Valicore Technologies; Hal Hurwitz, of McDermott & Bill Executive Search; and Cathy Solomon of alliantgroup, LLP.

Kudos to everyone involved in making this annual event the enjoyable success that it was!

Prof. Jay Lorsch of Harvard School of Business Returns to FCD in March!

Professor Jay Lorsch, Chair of the Harvard Business School Global Corporate Governance Initiative, was such a hit last year that FCD has invited him to join us again this spring – and he’s accepted. He’ll be our speaker for a March 26 breakfast meeting at the Hyatt Regency in Irvine. He’ll be talking on “Building the Relationship Between the Board and Top Management,” and we know that as usual he’ll be providing provocative thoughts in answer to member questions following his talk.

The breakfast starts with check-in and networking with your fellow FCD members and guests from 7:00 to 7:30 a.m. on Wednesday, March 26, with breakfast and Professor Lorsch’s presentation from 7:30 to 9:00 a.m. The event will be held at the Hyatt Regency Irvine (17900 Jamboree Road). The cost is $25 for FCD members and $45 for non-members. Our colleagues from the Corporate Directors Forum in San Diego may attend for the member pricing, as part of our reciprocal arrangements with CDF. Click here for more information or to register for this event.

FCD & UCI Begin Marketing Outreach for Joint Director Education Program

FCD and The Paul Merage School of Business at UC Irvine have launched marketing programs for their new joint director education course to be offered at UCI starting in April. This new program  provides an in-depth education path for business people who are new to service on boards of directors and wish to hone their skills, as well as for people who aspire to serve on corporate boards and need a solid educational foundation to prepare for that career enhancement. If you’re an FCD member who aspires to service on corporate boards, this is a great program to help get you started. And if you’re an FCD member who’s an experienced director, this is a program you can feel comfortable recommending to potential colleagues to help get them started.

This new course of study, which has been developed jointly by FCD and the Executive Education Department of The Merage School, provides the fundamental body of knowledge to prepare people to be effective directors. It provides a starting point to help individuals assess and develop their own training roadmap, to further their skills and to stay current on the ever-changing legal requirements of directorship.

The intensive program covers all aspects of what it takes to be a corporate director  including a broad array of training in basic board functions, including: board leadership; involvement in company strategy; financial responsibilities; ethics; compensation responsibilities; and regulatory issues and requirements. It’s truly a unique program because instructors are drawn from the world-class faculty of The Merage School and other southern California universities, as well as from leading  southern California business executives, through the auspices of FCD.

The new course will be taught in two 2-day sessions for a total of 28 hours of education. Classes will be held from 8:30 a.m. to 4:30 p.m. at The Merage School on the UC Irvine campus, on Thursdays and Fridays, April 24-25 and May 22-23, 2008. Students will also attend a May 22 dinner featuring a presentation by a nationally recognized speaker on emerging governance issues and trends for the coming year.

Cost for the intensive director education program is $2,900 per student. Interested parties may obtain more information or register for the program by contacting the Executive Education Department at The Paul Merage School of Business at UC Irvine by telephone, at (949) 824-4943; via email to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ; or on The Merage School’s web site.

FCD Friends and Associates—Upcoming Events:

March 18 CDF Program Focuses on Board-Shareholder Communications

The Corporate Directors Forum in San Diego has a timely evening meeting coming up on Tuesday, March 18. The title is “Dangerous Talk? When/How Should Directors Communicate with Shareholders.” In the past, most interaction between boards and shareholders could be problematic and, in fact, were proscribed. Not anymore. Now, investors and activists are pushing open the door to the boardroom, creating a new dynamic for directors.

Since points of view on this subject are varied, CDF has invited panelists from three distinct perspectives to look at these issues. They include Duane Nelles, a director at Qualcomm and chair of their audit committee as well as a member of their finance committee; Michael McConnell, an activist shareholder and managing director of Shamrock Capital Advisors; and Scott Wolfe, partner-in-charge of the San Diego North County office of Latham & Watkins.

This vital program will be held at the Hyatt Regency La Jolla on Tuesday, March 18. The evening begins with a cocktail and hors d’oeuvres reception from 5:30 to 6:30 p.m., and the program runs from 6:30 to 8:00 p.m. The cost is $55 per person for CDF members and $75 per person for non-members. FCD members may attend for the member pricing, per our reciprocal agreement with CDF.  Click here for more information or to register for this event.

Broadcom CEO Scott McGregor Featured in UCI Distinguished Speaker Series 

Scott McGregor, president & CEO of  Broadcom Corp. (a corporate member of FCD) will be the featured speaker on Tuesday, April 8, at the Distinguished Speaker Series held by The Paul Merage School of Business at UC Irvine.

The Merage School’s Distinguished Speaker Series brings to the Irvine campus key business leaders who address current business issues, leadership, ethics and other relevant topics. The goal of this excellent series is to expose students to speakers who can enhance student learning by sharing their real world experiences and insights.

The program runs from 6:30 to 7:30 p.m. at the new UCI Student Center, located at the corner of West Peltason Drive and Pereira Drive on the UCI campus. A wine and hors d’oeuvres reception follows Scott’s  talk. Click here for more information and to register for this event.

HBSAOC to Hold 24th Annual Entrepreneurs Conference in May

Our friends at the Harvard Business School Association of Orange County will be holding their annual Entrepreneurs Conference on Monday, May 19, at the Anaheim Marriott. If you’re a director or executive of a young, rapidly-growing company, you won’t want to miss this great event. The day includes a full slate of 28 panel sessions, featuring more than 60 knowledgeable speakers who’ll cover issues critical to launching and growing a business, such as funding, valuation, marketing and management development. The conference is paired with the annual Tech Coast Angels Fast Pitch Competition, in which entrepreneurs get to make 60-second funding pitches to a panel of TCA members and other experts.

Special pricing is available for attending both the Entrepreneurs Conference and the TCA Fast Pitch event, and early bird discounts are available for registering before May 9. Click here for more information on both events and to register for either or both of them.

Governance In The News

Bank Board Excludes Bonuses from Comp Targets

According to a March 5 article in The Wall Street Journal, the board of directors of one of the leading U.S. banks “has set compensation targets for top executives that will exclude some costs tied to mortgage losses and foreclosures when cash bonuses are calculated this year. The move…essentially shields the pay of (the) chairman and chief executive …and more than 100 other executives from the continuing mortgage fallout.”

The article noted that the bank’s HR committee cited “the challenging business environment and the need to evaluate performance across a wide range of factors. The committee said it will ‘exercise its discretion’ to determine the exact amount of the cash bonuses for executives covered by the plan and ‘subjectively evaluate company performance in credit risk management and other strategic actions.’”

Compensation experts described the structure of the bonus program as unusual. The article quoted one institutional investor as saying that “it might not be politically correct, because the captain’s supposed to go down with the ship. But in the real world, that’s not how it works.’”

IRS Wants to tax Golden Parachutes

Financial Week reported on Feb. 25 that “a tax ruling last week by the Internal Revenue Service could bring an end to the controversial practice of granting golden parachutes to top executives who are pushed out amid corporate failures.

“Under a tax rules known as Section 162(m), compensation of more than $1 million each to the CEO and three next top-paid executives, excluding the CFO, is not deductible unless it is performance-based, or tied to a target such as earnings growth. While it’s not stated in the rule, the IRS for more than a decade has permitted arrangements to be considered performance-based even if they had a provision that allows for the payment or vesting of an award—regardless of achieving a financial goal—upon the firing of an executive without cause or as the result of an investigation.

“But in a reversal from previous interpretations, the IRS has now decided that any compensation award—such as an annual bonus, restricted stock or most other long-term incentive plans, excluding stock options—that is part of an arrangement with such a golden good-bye provision fails to qualify as performance-based, and is therefore subject to the $1 million deduction limitation for non-performance-based pay.”

The newspaper reported that some “old (comp) plans are grandfathered, so the new rule applies only to plans beginning after Jan. 1, 2009.”