The current economic crisis has shattered many businesses and lives and threatens even more damage in the future. Terry Schpok points out in this month's front cover interview that corporations, because of the current ridiculously low market value of their stock, must reexamine defensive techniques to protect their shareholders from speculators who would sacrifice long term stockholder value for selfish gain.Cary Klafter and Ira Millstein in their interviews note weaknesses in our proxy voting system that open the door to the machinations of speculators. They direct our readers' and viewers' attention to the need to reform our proxy voting system so that it more closely reflects the views of those who are the ultimate beneficiaries.
Even more fundamentally, the crisis has shaken confidence in our free enterprise system and in our world-class corporations that can contribute so much to recovery if permitted to do so. Public cynicism about those corporations has reached such an all time high that it is likely to frustrate their efforts to partner with the administration in implementing the stimulus package and to result in harmful legislation that will inhibit their recovery.
Recognizing the impact on policy formation of growing public cynicism about corporations, Brackett Denniston, senior vice president and general counsel of GE called upon us to encourage our corporate counsel audience to urge their CEOs and GCs to speak out about the good things their companies do. Over the past few months we have featured the CEOs of Johnson & Johnson, GE and Exxon Mobil and the GCs of Southern California Edison and EMC Corporation, all serving as examples of why the CEOs and GCs of other companies should speak out and urge their CEOs to speak out as well.
Radical changes in the executive and legislative branches open the door to the adoption of laws and regulations that present serious threats to business.
Our editor's experience, first as corporate counsel and then as general counsel, provided him with valuable insights into the ways in which business can affect legislative outcomes.One thing that he learned is that to be really effective you have to get your CEO involved.It also helps if your company - and business generally - has taken pains to build a great reputation.
This is a big country, yet the voice of business is not lost if the call (or, better yet, visit) to a legislator is made by a CEO who understands the impact of the legislation on her business - and feels strongly about it. In many cases, the trigger to that call is a visit to the CEO by the general counsel who alerts the CEO about how the legislation would harm her company. If a major legislative matter was brewing, our editor would make his visit to the CEO's office at 7 a.m. because he knew that he would not be competing with others for his attention - but, before making that important visit, he would have talked with outside counsel to be sure that he had his facts straight.
We at The Metropolitan Corporate Counsel make it a lot cheaper and easier for general counsel throughout the country to fully inform themselves about the effect of harmful legislation. And, from the best source available - some of the most prestigious law firms in America.
Take the Employee Free Choice Act, for example. We have published in our Special Section devoted to Hot Issues Alerts numerous articles and interviews by labor law practitioners from such firms who, drawing on their extensive experience, described how the EFCA would adversely affect employers. We don't know exactly how it happened, but that legislation did not move forward. Our coverage undoubtedly played a role in that.
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