Editor: David, it is good to be interviewing you again this year and getting your update on the continued progress of a truly great organization that quietly and effectively does so much to support the corporate secretarial and governance functions. What is the state of the Society?
Smith: I can report that the Society is doing well. Our membership is growing nicely. Renewed programs with the New York Stock Exchange and NASDAQ added the corporate secretaries of newly listed companies to our membership. We give them a year's free membership and we have been encouraged by our ability to retain them as paying members. Most of our new members come in outside this program - and the vast majority of those sign up on our website. Although economic times are tough, the Society is seen as a great value because of the kind of practical advice that we share among ourselves. A phone call to the national office or to a fellow member to do networking can save hundreds if not thousands of dollars in legal fees.
Editor: I gather that it is customary for leadership to change at the National Conference.
Smith: Yes. The present Chairman of the Society is Lydia Beebe, Secretary and Chief Governance Officer of Chevron. She will end her year as Chairman at this year's National Conference. Following Lydia Beebe as Chairman of the Society will be Craig Mallick, Secretary & Assistant General Counsel, United States Steel Corporation. We are planning very actively for our 62nd Annual National Conference which will be held in Boca Raton, Florida June 25-29. Ann Mulé, Corporate Secretary, Assistant General Counsel and Chief Governance Officer of Sunoco is the Chairman of the Conference.
Editor: Recognizing that all the details (and speakers) have not yet been finalized, please describe the upcoming Conference. This would give our readers a better feel for the scope of the Society's activities.
Smith: The theme of our Conference is "HOT Issues in Corporate Governance." We will start on Wednesday, June 25 with a pre-Conference program, which is free to attendees. It will include an ethics session to provide our lawyer members with CLE credits. This will be followed by a professional development workshop on "How to Manage Stress," a very timely subject when so many of our members are facing increased demands on their time - frequently within fixed or reduced budgets.
We also are having a networking luncheon for small- and mid-cap companies that day. Issues affecting large public companies get a lot of attention. So, we want to remind our many members who are from small- and mid-cap companies and private companies and not-for-profits that we are also concerned about their needs. They have to deal with many of the issues affecting larger companies but in a different kind of environment. We have invited Governor Crist from Florida to welcome us on Wednesday evening. We are hoping that he can take time from his busy schedule, particularly now that he is on the short list of Senator McCain's possible Vice Presidential choices.
Editor: The Conference starts in earnest on Thursday, June 26. How will the Conference theme be kicked off?
Smith: Giving our opening address is Mike Oxley, the former Congressman who co-sponsored Sarbanes-Oxley and is now the Vice Chairman of the NASDAQ. This will be a fitting introduction to our Conference whose theme is "HOT Issues in Corporate Governance."
Editor: Large shareholders have been a driving force behind a number of major governance initiatives. Will the attendees learn from them what the 2009 proxy season holds in store for corporations?
Smith: The opening address will be followed by a panel entitled "Hot Issues with Pension Funds," which will give the attendees a heads up on what they can expect in the way of shareholder proposals in the 2009 proxy season. Represented on the panel, which will be moderated by David Katz, a partner at Wachtell Lipton, will be the Carpenters Union and other representatives of large activist pension funds. They will tell us about issues they are pushing in the 2009 proxy season like open access to the proxy statement and "say on pay." They will probably also talk about their desire to have companies address risk areas related to health, global warming and safety issues. Following that panel, Richard Parsons, Chairman of the Board of Time Warner, Inc., is going to speak to us on overall governance and board issues. He's a great speaker, so we're very honored to have him.
Editor: Will you also be hearing from other large institutional investors about the governance and other issues that concern them?
Smith: Yes, after lunch we will have another panel which will be "HOT Issues with Large Institutional Investors." On the panel will be representatives from Hermes, Fidelity and other big money managers and mutual funds. They are somewhat less confrontational and more issuer-friendly; but, because they now have to justify and disclose how they're voting, they are a little more engaged in the proxy process. Also, they do a lot of lending of shares. We are very interested in how the lending and borrowing of shares affects the vote at annual meetings. We anticipate they will also talk about their interest in executive compensation and the structure of compensation committees of the board.
Editor: Describe the breakout sessions that will end the working sessions on Thursday.
Smith: We expect that each of the breakout sessions will attract from 100 to 200 attendees who are interested in delving further into specific subjects. One will hone-in on "Compliance Issues." Another will look at "Notice and Access," which is the new e-proxy process that allows companies to choose whether or not to send paper proxies to their shareholders. Some companies now have experience with Notice and Access. Most companies have been kind of waiting to see what the experience of these pioneers has been. This is their chance to learn. The third breakout session on will be focus on "Best Practices in Managing Subsidiaries," which is really a nuts-and-bolts kind of thing but a very important topic.
Editor: Will corporate governance issues continue in the spotlight during the Friday session of the Conference?
Smith: Yes. On Friday morning we open with an SEC update from John White, the Director of the Division of Corporation Finance of the SEC. He will be followed by a panel entitled "What's HOT with the Delaware Judiciary," which will be chaired by Charles Elson, who heads the corporate governance center at the University of Delaware and is of counsel to Holland and Knight; Jack Jacobs, Justice of the Delaware Supreme Court; and Gil Sparks of Morris Nichols. Marty Lipton of Wachtell Lipton, another towering figure in corporate governance, will also address our group.
The afternoon session will continue the focus on governance with a panel titled "HOT Issues in Health, Environment and Safety Governance." The panel will be moderated by Ann Kelly of CERES and include Mindy Luber also from CERES, Gary Guzy from Marsh McLennan and Meredith Miller from the State of Connecticut.
Following the panel, we will again have breakouts again. One will be for small and mid-cap companies. Another will be devoted to a discussion of XBRL, which is a standards-based way to communicate business and financial information. Also offered is breakout session on selecting, evaluating and dealing with service providers, such as transfer agents and proxy solicitors. Many attendees will want to attend the breakout session on the always-hot topic of "Best Practices in Minute Writing," which has become a very tricky subject considering the fact that some courts view the minutes as a way to determine whether the board exercised its duty of care and some white collar lawyers see exposure to obstruction of justice charges if a report on discussions of sensitive matters is omitted.
Editor: Tell us about Saturday's session.
Smith: We start the morning with open forum where we hear from former SEC voices. We will get the views of Alan Beller, David Martin, Marty Dunn and Harvey Pitt in a panel moderated by Peggy Foran about the present state of the SEC and their insights about what changes a new administration might bring in personnel and future agenda. That will be fascinating and they're all great speakers. That's going to be followed by a panel called HOT Issues for Audit and Governance Committees and there we're going to have the heads of our key committees, Rhonda Brauer, from the New York Times, of our Corporate Practices Committee, Cary Klafter, from Intel, of our Public Company Affairs Committee and Neila Radin, from JP Morgan Chase, of our Securities Law Committee, talking about that subject. Nicole Sanford of Deloitte & Touche will moderate this discussion. Then we end the morning with HOT Issues in Executive Compensation.
Editor: You have focused on the business side. What about some of the other attractions?
Smith: Our annual luncheon on Thursday is the most attended event of our National Conference because everybody comes, the attendees, spouses, guests, kids, it's just a huge event. Bob Woodward of Watergate fame is going to speak to us at the annual luncheon. He's authored three books about the present Bush Administration, and it will be fascinating to hear his views on the extent President Bush's legacy will affect the upcoming election.
We have the opening reception on Wednesday. On Thursday night, we have Family Night. This event will attract close to a thousand adult attendees and 150 kids. Friday is the night when our exhibitors entertain people and then on Saturday night we have a spectacular gala closing to the Conference.
On Friday, we will have a buffet lunch in the Exhibitor Hall. We have no speaker because with between 75 and 80 exhibitors, we want the attendees to focus on the fact that one of the practical values of the Conference is to familiarize them with products and services offered by the featured service providers that may help them in carrying out their work.
Editor: Speaking of the importance of service providers to your members, our March issue featured an interview in which Society Vice President Geoff Loftus described an arrangement whereby members of the Society could subscribe to Lawyer Links Advantage on very favorable terms. Why does the Society feel that this arrangement is beneficial to your members?
Smith: The agenda of the Conference reflects the need for our members, notwithstanding budget constraints, to keep abreast of many issues of grave concern to their corporation and its directors and senior managements. They also need to know how other companies are responding to those concerns as reflected in their filings with regulatory bodies. Doing this with a limited staff and shrinking budgets for outside counsel is a grave challenge.
We found that Advantage was a unique product that enabled our members, even the nonlawyers among them, to get quick answers to a wide spectrum of the questions that they face, together with copies of the law and regulations and samples of filings by other companies. We felt that Advantage would in many instances avoid the need to consult outside counsel or to use more expensive and time consuming alternatives less targeted to their needs. And, we and Lawyer Links plan to work together to keep Advantage targeted on the emerging concerns of the corporate secretary.
Editor: I understand that the Conference is not the only event at which members of the Society can get together.
Smith: We have many chapter meetings and programs as well national programs. In November, we had a very successful "Issues Update" in New York, which attracted over 200 people. In January, over 250 people, including faculty, attended our three-day "Essentials of the Corporate Secretarial Function" program in Orlando, Florida at which 37 new members joined the Society as a result of a special offering to individuals who were not members of the Society.