More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
More boards are adopting clawback provisions, and looking more closely at risk oversight, according to a survey released on Monday by The Conference Board.
In the 2010 U.S. Directors’ Compensation and Board Practices Report, based on data gathered in May and June, questions spanned a broader range of subjects than previously, including CEO succession planning, say-on-pay, and gross-ups, as well as the aforementioned clawback provisions.
Matteo Tonello, director of corporate governance research at The Conference Board and an author of the report, said in a statement, “Over the last decade, our annual study has documented a steady transformation in the role of public companies’ boards, underscoring the increasing importance of directors’ monitoring responsibilities and the growing influence of shareholders. The new developments of the last few months alone, from the SEC regulation on disclosure enhancement to the governance provisions of the Dodd-Frank Act, illustrate the importance of capturing the practices we have added to our annual survey.”
Among other findings, the survey recorded that director compensation was more a factor of company size than of industry; the larger the company, the higher the compensation. Large financial services boards were found to be the least diverse, with the largest relative proportion of members who are CEOs, presidents, or board chairs of for-profit companies, rather than academics or accountants.
Larger companies are starting to institute clawback provisions; at least 40% of companies in the manufacturing and non-financial services industries have them, as do 36.6% of financial firms. Financial services companies are the ones primarily using say-on-pay. Nearly all financial companies with asset values of $10 billion or higher have a dedicated chief risk officer. And outside of the financial services industry, only 14.7% (manufacturing) and 18.3% (non-financial services) disclose succession planning to shareholders.