Society of Corporate Secretaries and Governance Professionals.

I was asked to join a panel on Risk from a Board member’s perspective  at the 65th annual convention of  the Society in Colorado Springs last week and found a weath of information about new governance procedures and the  new paid role of the whistleblower for the SEC which may be game changing.   SEC reporting in the small and mid cap companies is a daunting task, because you are managing and monitoring the securites disclosure process internally and doing “more with less”.   How to effectively use outside counsel is key, because small and mid sized companies rarely have insiders who know all the pitfalls around equity plans and stock exchange listing requirements.

The issues for smaller reporting companies are numerous and becoming more so with the impact of reporting requirements using XBRL. Inside the company someone must read the rules-SEC, applicable exchange, state law and relevant proxy advisory positions, as well as monitor new developments, suce as Dodd-Frank updates. The role of the Corporate Secretary is key.

Documents are a team effort and involve legal, financial, investor relations, communications, auditing, HR, risk management functions( which are different for biotech, than other industries.) The draftspersons need to know: the  company and its operations and history, competitior disclosures, management and/or investor “hot buttons” and the personalities involved. Managing more entrpreneurial businesses and personalities involves obtaining buy-in at an early stage and educating and managing less eperienced executives and directors. I for one would like to see methods of teaching and processes that apply some consequences if the directors don’t continue their education. Do you have helpful stories and ideas to share?

Categories: Science Futures

Post JPMorgan 2015

February 9, 2015 Leave a comment

I found the atmosphere at the JP Morgan and surrounding conferences very upbeat this year. Most notably the idea of a single asset financing is coming to the fore, and the middle East is getting the attention it deserves with the large patient population served in the MENA region.
There seems to be a willingness on the part of non profit organizations and foundations to come to the table and see what can be used compassionately in the growing global market. This was heartening to me, as diabetes grows globally and other unmet needs are being served by companies such as PATH.
Roche wins the prize for the most M&A’s truly laying a foundation for growth in genomics and diagnostics.
The surprise was the appearance of FinTECH, (Financial Technology) which has the potential to reshape private equity investing, as Venture investing goes increasingly to later stage. As long as there is good science being done, there will be financiers willing to help it along.

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Behold the turt…

February 4, 2014 Leave a comment

Behold the turtle, she never makes any progress until she sticks her neck out.

Sticking my neck out for new technology, software for breast screening, which looks at the breast as an organ.

First Warning Systems

The signal of taxene, not the drug cures as well when applied directly through the system developed by Nativis, Inc

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The Chairman of the Board

February 21, 2012 Leave a comment

This position varies from company to company however certain things should be maintained in order to have a system to run good board meetings.

These include:

Independence:Is the chair really independent? Watch for the CEO trying to capture the chair through perks, office support, vacations, jobs for family members, donations to charities, social relations—anything below the radar. In the words of one director during an assessment, “the chair is owned by the CEO.” He was right. Chairs are very candid with me on how influence happens.

Chair criteria: Integrity, commitment, financial literacy, compatibility with the CEO, the ability to hold people accountable, to chair meetings, to build consensus and maintain healthy dynamics—all attributes and skills of successful chairs.

Chair performance: I have observed firsthand, and have seen data confirming my observations, many chairs or even lead directors that are ineffective and beholden to either management or a significant shareholder. Be skeptical.

Chair selection: The chair should be selected from and by independent directors. Each director should offer confidential views and a formal vote should be taken. A committee should have chair succession planning in its mandate. All directors who participate in chair recommendation to the board should be uninterested in the role. The CEO should have no influence whatsoever, although he or she should be appropriately consulted given the importance of chair-CEO fit.

Chair tenure: Have a three-year appointment, with the option of one further term only if there is a clear consensus that no one else is better.

Chair compensation: Watch for the quantum of total compensation, as it gives rise to reasonable perception of independence. A board chair is a part-time position and should be paid as such. I remember when a CEO said to me in the board meeting that he needed to get paid a lot so he wouldn’t “get nervous” and the lead director—also paid a lot—chuckled and agreed.

Chair Evaluation: Chairs should be assessed by each director and reporting to management annually. Debriefing should occur between the board chair and the governance/nominating committee chair. Each director should be able to make use of this person/position if he or she has any performance-related concerns with the chair.

Focusing the board on value: Last but not least, the most important role of the chair is to ensure the maximization of company performance and shareholder value. Research In Motion and other companies take note. When there is a value deficit, independent chairs must have the courage to act. The chair must have value-creation skills, experience, leadership and the proper mindset—one that is focused like a laser on this end and the board’s responsibility to maximize performance and value.

The above points apply equally to lead directors in the American context, but because lead directors don’t chair full board meetings, it is critical that the attributes and selection of the person—particularly independence, influence and impact—be carefully thought through.

Next to the selection of CEO, the selection of board chair is probably the most important decision a board makes. If a board is ineffective, it is likely the chair is also ineffective and should be replaced. The chair has the single greatest impact on board effectiveness.

Board Lessons learned with great pain

February 21, 2012 1 comment

I had a conversation with Jon Saxe a career biotech executive, who has seen it all from the big company experience(Roche) to small start up with venture backing and everything in between. I asked him to give me his advice about Boards of Directors and this is what he said:
1.   Board have two duties, the first being that of Oversight and the second being that of the Nurture.
These are very different functions and his advice to would be Board members is “Don’t Be Shy” Speak out during Board meetings. His astute observation, now that he currently sits on 7 Boards, is that by the time one has had their career long enough to merit a Board seat, they have gone from specialist to generalist, and this is a good thing, because a board member has to be able to speak on issues where they are not expert!
In this way they are fulfilling the requirement of DUE CARE.
2 .  Jon felt that serving on multiple boards helps one educate themselves, by comparing what is done on other boards you bring a depth of knowledge not gained by going to board schools.
3.  In his mind diversity on a board is a good thing and includes more than just sexual diversity. He currently does not have any women of his 7 boards.
Having international diversity in terms of culture  and diverse geographic representation on a board is critical as a company grows globally and adds a level of interest to other board members.
4.  The Board can help management through its network, and this falls into his category of nurture. The more people you know, the more you can help.
He did not mention loyalty, but having known Jon for 30 years, I can personally attest to his brand of loyalty. Jon is currently Chairman of the Board of SciClone Pharmaceuticals and enjoys his bi yearly trips to China. He is currently looking to expand his Board and would like a person who knows all the aspects of how pharmaceuticals are priced in the various regions of China. If you know someone let me know.

NIH sets aside $461 million for genome sequencing

December 7, 2011 1 comment

 NIH unit sets aside $461M for genome sequencing project
The National Human Genome Research Institute has announced it will devote $461 million to projects that will help integrate DNA sequencing into mainstream medicine. A majority of the support, beginning at $86 million annually, will go to existing projects at three sequencing centers that were involved in the Human Genome Project. Some of the money will be used to establish projects dealing with the genetic basis of Mendelian illnesses and the effects of clinical sequencing. Nature

How Women Can Flourish in the Workplace – Vineet Nayar – Harvard Business Review

November 7, 2011 1 comment
Categories: Science Futures