Forum for Corporate Directors

Vol. 3, No. 4

April, 2008

THE LATEST FCD NEWS:

Hurry! FCD’s April 24th Roundtable Is Sure To Be Sold Out! Sign up Now!

If you haven’t already registered to attend the April 24th FCD Roundtable, you’d better hurry. This event is limited to 60 attendees and it’s already more than half full. The program is titled “Caught in The Crossfire – How Directors Can Deal with Aggressive Regulators and Activist Shareholders.” It features a panel of experts who will provide advice for corporate board members on how to handle increased scrutiny by the SEC, the Department of Justice and activist institutional shareholders in the post-Enron world. Attendees will get insights on ways to respond when investors or the government come knocking on the door – and what directors can do to hopefully prevent them from coming at all. Following the panel discussions there will be a case question analysis for in-depth discussion of key topic elements with attendee peers and the panelists.

The panel includes Mike Wilner, Assistant U.S. Attorney for Los Angeles (and a former SEC Staff Attorney); Zachary Carter, co-chair of the White Collar Crime Practice for Dorsey & Whitney LLP and a director at Marsh & McLennan Companies; and Andrew Stewart, Senior Vice President at FRM Hedge Funds in New York City. Moderator for this important discussion will be Mike Piazza, a Dorsey trial partner and former Regional Trial Counsel for the SEC’s Los Angeles office.

This event is a complimentary FCD members-only presentation. Members may click here to register for this program.

Enrollment Growing Well for FCD-UCI Joint Director Education Program

Registration is growing nicely for the upcoming joint director education course developed by FCD and The Paul Merage School of Business at UC Irvine, which is scheduled to begin April 24-25 and continue May 22-23 on the UCI campus. 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.

There are still a few open seats available, so if you know of anyone who would be interested in this exceptional educational program, please pass along the information before this course is sold out.

This is a great program for anyone who aspires to prepare for service on corporate boards. Developed jointly by FCD and the Executive Education Department of The Merage School, this course 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 be invited to attend FCD’s May 21 dinner event (see below).

Cost for the intensive director education program is $2,900 per student, which is a bargain for an intensive class series like this. 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’s May 21 Dinner Features Board Building for Early Stage Companies

Dave Berkus, a past FCD Director of the Year honoree and Southern California angel investor, will be the featured speaker at FCD’s May 21 dinner event. He will present his vision of the ideal board for companies at the early stage angel and venture post-funding level. Berkus has been working with entrepreneurs and early stage investors for 15 years. He has served more than 40 early stage companies since 1993 and is presently chairman of six and member of four early stage boards. Author of two books and many articles on board-building, Berkus asks the tough questions about the fragile and complex relationship between young boards and founders, the expectations of each, and the responsibilities of the board in early stage business-building. His focus on the early post-funding stage presents a view of board-building from a different vantage point than is usually presented to FCD members.

This dynamic and thought-provoking presentation will be the highlight of the FCD dinner on May 21, 2008. IMPORTANT NOTE: This event will be held at a new venue for FCD, the Hilton Costa Mesa, located at 3050 Bristol Street in Costa Mesa, just south of the 405 freeway. This program will be a key event for both FCD members and students enrolled in the FCD-UCI Director Education program that runs in April and May. The program begins with a reception at 5:30 p.m., followed by dinner and the program at 6:30 p.m. Stay tuned to the FCD web site for more information and to register.

FCD Sponsor Spotlight: Stradling Yocca Carlson & Rauth

With this issue, the Forum for Corporate Directors begins a new series of profiles that will spotlight the many outstanding sponsors who provide such great support for FCD and our extensive array of educational and networking events in Orange County. We couldn’t achieve the high level of success we enjoy without them. In this first of what will be monthly profiles we feature one of our oldest and best friends: the Orange County born and bred law firm of Stradling Yocca Carlson & Rauth.

There have been many firms that have supported the Forum for Corporate Directors since the organization was founded in the early 1990s, but none has supported the organization for as long and in so many ways as Stradling Yocca Carlson & Rauth – one of Orange County’s oldest and best-known law firms. SYCR is a founding sponsor of FCD and has been extraordinarily generous in its financial support over the years, but the firm’s support has extended far beyond just sponsorship dollars. SYCR encourages its professionals to support FCD with their time and talents to promote good governance and board excellence. Several have served with distinction as FCD board members and others have supported the group with untiring work on FCD committees, programs and educational activities.

We extend our heartfelt thanks to everyone at Stradling Yocca Carlson & Rauth!

FCD FRIENDS & ASSOCIATES—UPCOMING EVENTS

CDF to Discuss Board’s Role in Risk Oversight on Thursday, May 1

Considering how the subprime mortgage meltdown has spread through the investment banking industry and now threatens the mainstream economy, the Corporate Directors Forum in San Diego has a very timely breakfast meeting scheduled for Thursday, May 1. Entitled “What Is The Board’s Role in Risk Oversight?”  This session will examine board oversight from multiple angles to shed light on what bank directors might have done better to perhaps minimize what’s occurring now. Has the amount of risk actually increased, or is it just having its time in the hot spotlight?

• What exactly is risk?
• What are 'best practices' in 2008?
• Are boards adequately monitoring risk?
• Is risk assessment the responsibility of management with the board's oversight or should the board take on a larger role?
• Ultimately, where does the buck stop?
• How can boards mitigate risk and avoid the repercussions of containment failures?

Featured speakers include Jere Buffington, Vice President of Risk Management for SAIC; Richard Mejia, Partner, Ernst & Young; Preston Romm, Vice President & CFO of Iomega Corporation; and Trindl Reeves, Principal of Barney & Barney, who will moderate the panel discussion.

This is a members-only event for CDF members, but FCD members are welcome to attend through the joint agreement between our two organizations. Any FCD members who would like to attend should contact Michelle Conry at the FCD office, by phone at (949) 375-3323 or via email at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it to arrange participation. Click here for additional information.

HBSAOC to Hold Management Networking Breakfast on April 16

The Harvard Business School Association of Orange County will host a management networking breakfast featuring acclaimed marketer Bruce Allen on Wednesday, April 16. Allen’s topic will be “Driving Success in a Down Economy – Marketing Strategies for Business Professionals.” He’ll provide strategies and tactics that will get you noticed and keep you ahead of the competition, including things people can do right now to make a difference and planning for what’s next in an ever-changing business environment.

This breakfast meeting is open to all Orange County business people and runs from 7:00 to 9:00 a.m. at the Radisson Hotel (on MacArthur Boulevard) in Newport Beach. Cost is $25 per person with advance registration or $30 at the door. Click here to register for this event.

Register Now for HBSAOC’s 24th Annual Entrepreneur’s Conference

The Harvard Business School Association of Orange County is already gearing up for its 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.

Attendance at this event is expected to surpass last year’s record of 650 attendees, so the association urges people to sign up early before the event is closed. 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 or to register.

GOVERNANCE IN THE NEWS

“Bear’s Board Was Busy Elsewhere”

In a March 31 article bearing that headline, Financial Week reported that as regulators and attorneys sift through the risk management failures at Bear Stearns, “they’ll likely zero in on Bear’s board of directors – three of whom serve on the boards of at least four other public companies. More attention-grabbing still: two of those three extremely busy directors man Bear’s risk committee.” The writer noted that in proxy data compiled by Financial Week and The Corporate Library, “Bear Stearns is one of only two publicly traded U.S. companies to have as many as three of its directors sitting on at least five public company boards” and asks “Were they too stretched to devote the necessary time and attention to Bear as the biggest underwriter of U.S. mortgage bonds was collapsing over the past year?”

The journal quoted Charles Elson, a 2007 FCD guest speaker and professor of corporate governance at the University of Delaware, “the more board work you’re doing, the less focus you can put on any individual company or task. I would expect everyone will be taking a closer look at Bear’s board, given the lawsuits that will be floating around and the massive losses.”

The three Bear directors had plenty of other obligations as well: “Each was a company chairman and/or served on a variety of committees at their director posts outside of Bear,” the writer said. “RiskMetrics Group recommends that current CEOs serve on no more than two outside boards, while other directors serve on no more than six. Mr. Elson suggests active CEOs sit on no more than one outside board, other active senior executives no more than four other boards and retirees no more than five.” As a counterpoint, one law firm partner indicated that “directors who are seeing problems being dealt with by a variety of companies in a variety of industries may be more likely to identify problems than directors whose experiences are not as diffuse….(however) now it’s turning into a situation where everyone’s asking ‘Why didn’t you have a crystal ball?’”

“Doing More Than Their Share For Capitalism”

In a companion piece to the Bear Stearns article, Financial Week asked The Corporate Library to research how many publicly traded U.S. companies had directors who held seats on five or more boards, based on 2007 proxy data. Astonishingly, there were 90 directors listed who filled 468 board seats and were paid an average of $163,568 per seat. The highest paid director earned $3.25 million in total compensation from sitting on just one of his board posts, and also had the highest total compensation at $4.1 million. The second ranked director earned $1.2 million from his top post. On average, the 90 directors took home $881,696 in total compensation. Only one director collected less than $100,000 in total pay – and one was noted for not having received any pay for his service on six boards. An interesting survey indeed.

We promote excellence in corporate governance and boardroom leadership to help directors and executives grow their enterprise value.

FOUNDING SPONSORS
Stradling, Yocca, Carlson & Rauth · Ernst & Young LLP

LEGACY SPONSORS
Lockton Insurance Brokers, LLC · Powerwave Technologies, Inc.
PricewaterhouseCoopers LLP · Sunwest Bank

Deloitte & Touche USA LLP · KPMG LLP
Paul, Hastings, Janofsky & Walker LLP · UC Irvine, The Paul Merage School of Business

PLATINUM SUSTAINING SPONSORS
Bowne Financial Communications · Microsemi Corporation

GOLD SUSTAINING SPONSORS
Advanced Medical Optics, Inc. · Gordon & Rees LLP
McGriff, Seibels & Williams · Union Bank of California