clearinghouse_bannerNasdaq Governance Clearinghouse
Innovation Cardlytics Spotlight Company Spotlight Leadership Outside Insight Blockchain Proxy Season Boardroom

The Listing Center: 10 Years of Continued Innovation
Publication Date: June 14, 2019

From billion-dollar unicorns like Beyond Meat (Nasdaq: BYND) and Lyft (Nasdaq: LYFT) to $100 million pharmaceutical companies, Nasdaq is the exchange of choice for many companies seeking funding in the public equity markets.  Listing on Nasdaq is only the beginning of a company’s journey, however, and Nasdaq works hard behind the scenes to facilitate a smooth transition from private to public company.  That’s where the Listing Center comes in. 

Innovation is part of Nasdaq’s DNA

We were the first market to introduce an electronic listing application process and are still the only U.S. market with an entirely online system for submitting applications and forms. Since we launched the Listing Center 10 years ago, companies have submitted more than 60,000 applications and forms.  We now have more than 11,000 active account holders on the Listing Center and our users generate more than 800,000 page views a year.

Our digital listing platform processed more than 8,500 U.S. company applications and forms in 2018 alone.  Another 3,000 applications were generated by issuers listing securities on our Nordic exchanges. 

Over time, the Listing Center has evolved beyond an electronic submission portal for notification forms to include a robust Reference Library designed to bring transparency to our listing rules, policies and procedures.  Today, our library contains hundreds of listing-related frequently asked questions (FAQs), Listing Council Decisions and staff interpretations. In 2018, we added a new library for Market Regulation content to help answer questions on a myriad of market surveillance and regulatory issues. Users can search our resources by category and using keywords.  Users can also share individual FAQs or groups of FAQs by clicking the envelope icon on the search results page. 

These reference libraries continue to be extremely popular and generate about 20% of the traffic on the Listing Center.  Given the high volume of use and that users are increasingly accessing the internet through mobile devices, in 2015 we created a mobile reference library app which is available for Microsoft, iPhone and Android devices. More than 5,000 users have downloaded the apps and we have hundreds of regular monthly users. 

The Reference Library app has all the great functionality of the Reference Library website as well as a few added features, like the ability to save content so users can readily access it later.

In 2015, Nasdaq also added the Governance Clearinghouse to the Listing Center, providing a forum to promote dialogue and exchange ideas on governance topics, trends and issues.  Since it was first launched, we have published more than 450 original articles and news briefs on a range of topics from cyber security to sustainability and board composition.

The Governance Clearinghouse thought leadership library has become so popular that in July it will be moving to and become part of our newly christened Governance Center where we will continue to provide thought leadership, trends and news on a wide variety of governance-related topics from a growing cadre of experts.

We will also continue to spotlight the governance best practices of our listed companies, as we did recently for Cardlytics, Heidrick & Struggles, and Wynn Resorts.  If your company has a unique governance story to share, please reach out to us at

Nasdaq is committed to driving the user experience forward as we continually look for new ways to ease the regulatory process and provide companies with the tools and information they need to succeed.  We are proud to provide this free resource to applicants, listed companies and their advisors.


Visit the Listing Center >>

Visit the Reference Library >>

Visit the Governance Center on >>

Download the Nasdaq Reference Library app for iPhone >>

Download the Nasdaq Reference Library app for Android >>

Download the Nasdaq Reference Library app for Microsoft>>


Cardlytics Shares 7 Lessons to Help Your Company Transition from Start-Up to Successful IPO
Publication Date: May 02, 2019 

In February of 2008, two colleagues from Capital One launched a new fintech company with the goal of unlocking the hidden value of purchase data aggregated from the nation’s banks and financial institutions.  When Lynne Laube and Scott Grimes co-founded Cardlytics (Nasdaq: CDLX), they launched a whole new industry.  Their platform, built within banks’ digital channels, analyzes purchase data to help banks increase customer loyalty and engagement, help advertisers drive revenue and brand awareness, and help consumers save money on everyday purchases 

Nearly 10 years to the day they founded Cardlytics, Lynne and Scott were ringing the opening bell at Nasdaq to celebrate taking the company public. We recently spoke with Lynne, COO of Cardlytics, and asked her to share the lessons she and Scott learned during their 10-year journey from start-up to IPO. 

1. Find early champions to help you launch.

Scott Grimes and I knew we had a great idea, but it was untested and required access to customer data at a time when companies were beginning to grasp the inherent dangers of cyber-security threats and vulnerabilities. We would not be here today if we hadn’t had help along the way.  In Cardlytics’ early days, one of our board members gave us great advice on how to build a company. Even more importantly though, he introduced us to a variety of financial institutions, which led to our very first deal with a big bank. That partnership would never have come to fruition without his initial introduction.

Help can also present itself through a particularly strong customer advocate. In the case of our first launch with a large, national bank, we worked with a man named Jason. Banks are very risk-adverse in nature, and our experience proved that there are far more bank employees who will say “no” to an innovative, new idea than who are willing to say “yes.” Jason said “yes,” putting his own reputation on the line. He believed in our product almost as much as we did. We're so thankful for his support. We wouldn’t be where we are today without Jason and the many other proponents who saw Cardlytics’ potential and fought for us! 

2. Keep your ear to the ground.

Absorb all of the stories you hear and learn from them. Listen to feedback from customers and partners and ensure that you’re doing all that you can to meet their needs. Learn from the celebratory endings and also from how people and companies have recovered from the hard times, both as private and public organizations.

3. Never give up but know when to pivot—and when you do, pivot very, very quickly.

Like many start-up entrepreneurs, Scott and I experienced a number of corporate “near-death experiences” that forced us to embrace the importance of perseverance. Early on in Cardlytics’ history, our car broke down—and then caught on fire—on the way to an important meeting.  We were agile and determined enough to get there anyway, against all odds.  

Play to that “never say die” strength, but also have the judgement to change course when necessary without letting go of your overarching vision. To this day, we’re constantly putting out unpreventable fires, absorbing feedback from our brand clients and banking partners, and adjusting our solution accordingly. That’s why Cardlytics now works with the three largest banks in the U.S.  During our last earnings call, we reported a 30% increase in the number of marketing clients that are spending more than $1 million with us.

4.  Leverage your entrepreneurial skillsets when transitioning to a public company. 

No one else is going to believe in your idea the way you do. Throughout our time running Cardlytics, Scott and I have derived strength and determination from the knowledge that we’re not just building a company, we’re building an industry that meets a pressing business need for banks and brands alike.

Being an entrepreneur and starting your own business, no matter who you are, requires a good amount of grit. The same is true of taking a company public. Many of the skills that make Scott and me good entrepreneurs also translate to our lives as public company executives.

For example, we founded Cardlytics in the spring of 2008 – having no idea that the U.S. would suffer from a global, economic meltdown just a couple months later. Needless to say, it was an incredibly bad time to be raising money from investors. The stress was insurmountable, and even though we knew we had a great idea, we weren't sure we were going to get any funding. We were kicked out of every bank we met with, but we didn’t give up.

Convincing investors why Cardlytics was worth their time and money during our pre-IPO roadshow was a similar experience, despite having ten years of proof points demonstrating our success. Thanks in part to a market correction that occurred right before we went public, it certainly wasn’t easy. Half of the companies who had IPOs scheduled for that week backed out, but we made it through with flying colors thanks to our perseverance and amazing support from the Nasdaq team.

Despite our many set-backs over the years, we kept pushing, believing and trying. Maybe the stars aligned, or maybe grit carried us through. Either way, we celebrated every single success, big or small, and never gave up. We’re continuing to use this strategy in the public sphere.

5. Deliberately build networks that support you through each stage of growth.

Starting a company (and then taking it public) will take more time, energy, dedication and money than you expect. Being a leader can be a lonely process, which is why I always tell entrepreneurs who are entering a new stage of corporate growth to surround themselves with people who compliment their skill sets and build a peer network.

At Cardlytics, we’re lucky enough to have a lot of strong, visionary leaders – many of whom have been with us from the very beginning. But for me, having a co-founder, someone who is the “ying” to my “yang,” has been critical. Owning a company is nonstop, and it never goes away. I was an extremely dedicated employee to the various companies I worked for previously, but at the end of the day, I went home and could turn it off for the evening. Being an entrepreneur is never just a job –Cardlytics is my third child – and I’m so thankful to have a co-founder to share the wins and losses with.

I also think that entrepreneurs should form a network of peers to bond and connect with. All entrepreneurs are different, but we have common themes: we all have a little bit of crazy, we all have “near-death experiences,” we get a little bit lucky sometimes, we have tenacity and we try. Starting a company can be very lonely, as can the process of taking one public, so having other entrepreneurs to relate to and share stories with can make all the difference.

6. Stay true to your core values—even after you go public.

Transparency and authenticity have always been two of my core values. It’s been a bit of a change for me to have lots of projects I’m currently working on that are super cool, but I can’t say a word about because of various legal or contractual restrictions. As someone who wants to be completely transparent with employees, being limited in terms of what I can share is a difficult transition to make. Learning how to be authentic and transparent in a public company environment is something I've been working hard to excel at.

One of the ways I’m attempting to do this is a carry-over from our private company days. To help my team thrive, I personally provide ongoing, two-way dialogue to listen and be open to feedback from all levels of the organization.  Scott and I co-host regular, judgement-free open forum discussions. The wonderful thing about connecting with our employees in an open, trusted setting is that we always leave with a new piece of information, or a new idea, that we didn’t have before. And we act on it!

In addition, I personally meet with every new employee who joins Cardlytics to enforce our culture of authenticity. I also host an intimate new hire meeting where I share my vision and goals for the company, explain why we created Cardlytics in the first place, discuss our culture, and answer any questions. I do this because I have an expectation that if someone sees something that looks wrong or broken, I want them to be able to come to me with their concern and/or advice for a resolution. I can’t expect our people to share ideas with me if we’ve never had a conversation, and I want them to know that I’ll show them the same respect.

7. Build a best-in-class corporate culture from day one.

Not only am I proud of our successful IPO on Nasdaq, I'm also proud of the industry and culture we’ve built, which has earned us recognition from highly respected organizations.

Since we launched Cardlytics 11 years ago, we've been able to create more than 400 jobs in multiple cities and countries, and I’m extremely pleased to say that most people who work here actually do love their job. We humans spend more of our waking lives at work than anywhere else, so it’s important that work is a place we want to be. At Cardlytics we rally around each other, we support each other, and we lift each other up. We want our people to be fulfilled on both a professional and personal level. Our offices are a clear example of this philosophy, too, because we don’t have offices! We built an open environment so that people can talk to each other, learn from each other, collaborate, and engage.

We very much strive to create an environment where employees can be their best selves and share their passions, and we empower them to drive those passions with innovation and excitement. To name just a few examples, we offer regular Days of Service where employees are given the opportunity to volunteer at various nonprofits, host group activities like ping-pong tournaments and “Cardfit” exercise classes and sponsor ongoing education sessions promoting workplace diversity and inclusion, among other critical topics.


Cardlytics, Inc. (Nasdaq: CDLX) partners with financial institutions to operate a purchase intelligence platform that helps make marketing more relevant and measurable while promoting customer loyalty and deepening banking relationships.  Headquartered in Atlanta, Cardlytics has offices in London, New York, San Francisco, and Visakhapatnam. 

Pursuing Profits through Purpose: How ascena retail group Creates Long-Term Value
Publication Date: April 11, 2019 

For the past two years, BlackRock CEO Larry Fink has highlighted “purpose” as a theme of his annual letter to CEOs.  His 2019 guidance calls for executives to embody purpose within their company business models and strategies, stating that “profits and purpose are inextricably linked.”  Fink has put corporate governance teams on notice that when engaging with companies BlackRock will “seek to understand how a company’s purpose informs its strategy and culture to underpin sustainable financial performance.”

Companies seeking a benchmark for how purpose serves as a framework to guide strategy and business decisions can look to ascena retail group, inc. (Nasdaq: ASNA). There are eight clothing brands under ascena’s umbrella, including Ann Taylor, Lane Bryant and dressbarn.  The company is one of the largest specialty apparel retailers focused on women and girls, and its core purpose is stated prominently on its website: provide all women and girls with fashion and inspiration for living confidently every day.

In keeping with that purpose, ascena boasts a board and a workforce that is primarily female, and a comprehensive global social responsibility program with a slogan that succinctly articulates the company’s core purpose: “Her—At the Heart of Us.”  We talked to ascena retail group Chairman and CEO David Jaffe about how the company embodies this purpose in its pursuit to build long-term value for shareholders.  Lead Independent Director Kate Buggeln also participated and offered her insights as well.

My parents, Elliot (EJ) and Roslyn (Mrs. J) Jaffe, opened the first dressbarn store in 1962 to provide discount clothing for working women.  Their customer-centric values and practices have remained in place throughout dressbarn’s evolution from discount clothing chain into a retail holding company with a diverse portfolio of fashion brands, and they are at the core of Her, at the Heart of Us.

That purpose guides everything we do today, including growth and acquisition strategies, supply chain management, culture shaping initiatives and the social causes we champion. 

We diversified our product line to include all women, acquiring brands with corporate cultures aligned to our own.

EJ was a true entrepreneur, willing to bet it all on an untested idea for discount clothing for an untested market of working women.  But he didn’t just take risks—he worked hard to find the risks worth taking.  His decision to take a chance on the dressbarn concept wasn’t a wild-eyed bet.  It was an educated decision based on careful assessments of the retail market and how consumer behaviors (and society as a whole) were evolving.  I grew up watching my parents steadily build dressbarn from one retail shop into a 50-store public company by 1983. 

We put those lessons to good use when we set out to grow the company and expand our fashion lines through acquisitions.  Since going public, dressbarn has evolved into ascena, which includes eight brands and serves a more diverse range of customer segments through 4,600 stores, brand websites and social channels.  While we've made four successful acquisitions, we also looked at many, many other companies we didn’t ultimately pursue—often because they weren’t a good fit culturally.  

At ascena, we don't just put our purpose on a wall— we walk the talk. And as we’ve researched brands to acquire, we’ve looked for promising companies that have corporate cultures and values consistent with our own.  The cultural integration of new brands under the ascena umbrella has been smooth and successful as a result.  Catherines is a great example of a brand ascena acquired that meshes well with our values.  Long before it became fashionable to cater to full-figured women, an enterprising woman named Catherine Weaver opened a small clothing boutique in Memphis.  That was the genesis of Catherines. 

We take great care of our associates. 

The first dressbarn was a success in large part due to the fact that my mother provided legendary customer service while selling discount clothing.  Her respect and care for customers extended to dressbarn’s sales associates and associates; she treated her store associates like they were family.  For example, the women she employed often did not have health insurance, so she worked hard to ensure they were covered. By today’s standards that is commonplace, but back then it was very unusual—especially for a small company. 

At ascena, we strive to make our associates feel like part of a community.  We’ve created a culture where people like coming to work, they love the work environment, they love what they do and they love our clients. We want our associates to grow with us and we’re committed to helping our associates grow within the organization. ascena offers mentoring programs, special projects, and educational programs to give every associate the opportunity to push themselves. 

Treating our associates well benefits the entire company.  It creates a virtuous cycle that increases productivity and associate retention and impacts the overall customer experience.  When associates are happy, they treat customers well; when customers are treated well, they keep coming back.  This virtuous cycle helps ensure ascena is an employer of choice.

The vast majority of our leadership pipeline is female, like our customer base.  

We are proud of the number of women in our ranks:  95% of ascena’s 64,000 associates are women; 62% of ascena vice presidents and above are women; 75% of directors and above are women; 97% of our stores are led by women; and the majority of ascena’s board of directors are women. We believe the percentage of female managers at ascena is remarkable given that we operate in a time where gender equality is an exception, not a norm. 

Four of our eight clothing brands were founded by women entrepreneurs:  Mrs. J started dressbarn, Kay Krill created LOFT, Lena Bryant founded Lane Bryant at the age of 25, and as I mentioned Catherine Weaver was the founder of Catherines.  We would like to continue that legacy by encouraging our female managers to rise within the ranks of ascena’s leadership team.  We recently launched a Women’s Leadership Initiative, a program comprised of an Executive Council, signature events and associate resource groups designed to advance our commitment to supporting women leaders.

We refreshed our board, which now boasts six women among eleven members.  

We set out several years ago to develop a board that is more reflective of our clients and culture. We’ve built the best board for our business with people of different backgrounds. We took our time identifying the best candidates for the particular niches we were looking to fill, and discovered that there are a lot of talented and experienced women out there.  We now have a strong, high-quality board that happens to be a majority female.  Our independent lead director is Kate Buggeln, who’s been a member of our board since 2004. 

ascena’s women directors bring to the board a much closer connection to our customers. Each of our female directors have their own Ann Taylor or dressbarn story, because they’re shopping in the stores or online on a fairly regular basis.  They have greater context regarding the challenges we're facing in the retail markets and the opportunities we’re not taking full advantage of.  They share their feedback on their experience as customers, both in-store and on our websites.

Our board meetings are more interactive and conversational, with directors challenging everything we're doing from the customer perspective: What are you doing to learn about your customer? How are you listening to your customer to really engage with her on her terms to find out what she's out looking for? 

These conversations are forcing us to think harder, to reorganize our priorities.  Six months ago I held a big meeting where I declared a focus on customer-centricity, and we’re setting up a consumer insights Center of Excellence. 

Kate Buggeln, Lead Independent Director of ascena retail group, adds, “The rule of three, when applied to a board, proposes that one female member is token, two female members a presence and three female members a voice. With six women on our board, ascena’s female members are simply directors with diverse backgrounds and a common customer connection. Our natural tendency is to work collaboratively, unconsciously coordinated, to ensure all members’ viewpoints are heard.”

Our social responsibility programs are aligned with our core purpose.

ascena is seeking to drive positive change not only for our customers but also other female stakeholders, including community members, associates, and even the women who work in our supply chain. We know that the customers who participate in our cause marketing programs spend more with our brands than customers who are not participating in those programs, so our responsibility strategy is also driven by business goals. Our current goal is to work together with ascena associates, customers and partners to raise and contribute $250 million by 2025 in support of all women and girls globally.

For example, one of our Her, at the Heart of Us projects is providing education on personal hygiene, family planning and financial literacy to the female associates who work in our supply chain. We’ve reached over 100,000 women across our supply chain now and we are still going strong. Mrs. J taught me that if you take care of your customers and your associates, they’ll respond with loyalty.  The same is true of the vendor partners in your supply chain: If you take care of their workers and support them in ways those vendors can’t, it brings returns in many multiples. As a result of our work through HERproject, our suppliers have reported stronger workplace relationships, reduced turnover and absenteeism, and increased productivity per worker.

We also emphasize community service through a number of programs.  Our ascenaCARES Associate Awards recognize associates who give back to their communities with a grant from ascena Foundation to the organization of their choice.  The Roslyn S. Jaffe Awards celebrate everyday heroes who make the world a better place for women and children. The HERlead program is geared toward young women who are high school juniors and sophomores who want to make a difference in their communities.  We bring them in and give them a little jet fuel to propel their interests and future careers as social entrepreneurs.  We have a program for tweens called the Live Justice Awards that recognizes young girls who are doing great things in their communities. 

There are many other components to our social responsibility program, such as improving access to clean water, increasing our sustainable sourcing, and reducing the company’s carbon footprint.  ascena strives to be the best corporate partner and the best community partner that we can be.  That's how you build a strong reputation and get people feeling good about patronizing and working for the company.

Mrs. J, ascena executive leaders, store associates, Jaffe Award winners, HERlead Fellows and Justice Girls with Heart Ambassadors rang the Nasdaq Opening Bell on March 12.

For more information, read:

ascena retail group's social responsibility platform>>

Larry Fink’s 2019 Letter to CEOs>>

BlackRock Investment Stewardship’s approach to engagement on long-term strategy, purpose, and culture>>


ascena retail group, inc. (Nasdaq:ASNA) is a leading national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Value Fashion segment (maurices and dressbarn), Plus Fashion segment (Lane Bryant, Catherines and Cacique), and for tween girls under the Kids Fashion segment (Justice). ascena retail group, inc. operates ecommerce websites and approximately 4,600 stores throughout the United States, Canada and Puerto Rico. 

company spotlight
Diversity and Inclusion is Shaping the Character of Heidrick & Struggles: Here's How
Publication Date: April 2, 2019 

Heidrick & Struggles (Nasdaq: HSII) is a global leadership advisory firm specializing in executive search, leadership assessment and development, organization and team effectiveness, and culture shaping.  The company is a pioneer in culture transformation and believes that an inclusive culture not only fosters innovation, but is also key to its ability to outpace rivals and create a competitive advantage.  Several years ago, Heidrick & Struggles made a commitment to build a world-class corporate culture that prioritizes diversity and inclusion.  Rick Greene, a partner at Heidrick & Struggles, shares the lessons learned in the process, along with some of the positive impacts a retooled culture is already having on the organization.

About four years ago, we began retooling the culture of Heidrick & Struggles.  We wanted to bring more women and other diverse talent into the ranks of upper management and ensure our client-facing consultancy teams were diverse.  We wanted a culture that was inclusive, so all Heidrick & Struggles employees felt welcomed and supported and motivated to be highly productive.

Our internal culture-shaping journey has been very eye-opening for us.  We have gained a valuable inside-out perspective of what it’s like to live through a corporate character change, and we are already finding that the investment we made has proven well worth the effort. Here are some of the most valuable insights we gained along the way: 

Our HR policies now reflect—and support—a diverse workforce.

At the beginning of our culture-shaping process we benchmarked ourselves, and part of that exercise included a survey of Heidrick & Struggles’ female employees.  That survey pointed us very quickly to the fact that some of our HR policies around parental leave, compensation, and performance management were at odds with our stated goal of being a leader in diversity and inclusion.  In some ways we discovered that we were actually behind the curve. 

That was a moment of self-awareness as a management team and as an organization.  It caused us to look internally and say, “We’ve got a real imperative to change here.”  We realized if we truly wanted to create a culture and environment that was diverse and inclusive, our HR policies would have to reflect that. 

Aligning HR policies with corporate messaging is a powerful sign that a company is serious about diversity and inclusion.  Employees immediately see through cultural window-dressing, such as putting up web pages and conference room placards that say nice things about diversity and inclusion.  Management actions and company policies have to visibly support those words.

That kind of authenticity is critical, not just to existing employees but prospective talent as well.  The internet has brought transparency to virtually everything a company does, including culture.  There are multiple websites where employees share what’s really going on internally at the companies they work for.  Prospective employees can research online and easily identify companies where they’re going to be most successful, where they’re going to get sponsorship, where they’re going to be dealing with people whose values match their own, where they’re going to have parental leave and other policies that are conducive to achieving professional aspirations as well as a work-life balance.

We brought more transparency to the compensation process.

An inclusive culture requires bringing transparency to the compensation process, so that diverse and rising talent feels compensation is fair and reasonable because they understand what the process is.  Employees don’t feel valued if the compensation process appears arbitrary—set by a group of people who do not know them, who aren’t particularly connected to them, and who don’t seem to be applying standard formulas with clear criteria.

Even in an industry like professional services, where compensation is largely formulaic and driven by production over the course of the year, there is still room for women to be at a disadvantage when it comes to compensation.  It’s important to ask the right questions when benchmarking the company’s compensation policies:  Are women getting the same commercial opportunities that their male peers are?  In negotiations, when two partners sell an engagement and the firm is going to get paid $100,000 for the work, are the male and female partners who sell that work together on equal footing in the negotiations for how credit for those fees gets allocated?  The answers to questions like these can guide necessary clarifications and changes to ensure compensation gaps are identified and eliminated.

The diversity of our leadership and consulting teams now reflects the aspirations of our clients.

Today, three of Heidrick & Struggles’ five executive officers (including our CEO) are diverse.  More than 50% of our board of directors is diverse.  Our management committee—comprised of key corporate leaders and senior partners who are serving clients every day—is 50% diverse.  During the past few years, women have been promoted to run our New York, London, and Paris offices – our 1st, 2nd, and 4th largest offices, respectively.   Our 3rd largest office, Chicago, is led by an African-American male partner.  Women lead our two largest revenue-producing practices: Technology and Financial Services.  Our chief human resources officer is a woman, chief marketing officer is a woman, and general counsel is an African-American male. 

These appointments have not only given women and minority professionals at Heidrick the benefit of personal growth and opportunity; they have accelerated our business case for internal culture shaping.  Heidrick now has an authentic, strong diversity story to tell when we have conversations about our firm, whether we are pitching prospective clients or recruiting the best talent to work for us. 

Our culture shaping process has accelerated decision making.

The culture shaping process begins with a discussion of the current purpose and values statements of the company, to the extent those are defined and articulated. The process itself includes a diagnostic of baseline culture, including what’s working, what’s not working, and how culture is linked to performance and the company’s aspirations.  Then the process pivots to defining a renewed statement of purpose and values for the organization.  Once purpose and values are in place as anchors, they almost inherently accelerate the work of management. 

One of the greatest moments for us when we went through our own internal culture shaping was that an immediate result was that we had a very clear purpose and a very clear set of values to guide us when making decisions.  Our culture shaping work has enabled Heidrick’s managers to say, “We can scrutinize the situation in detail, but let’s just ask ourselves fundamentally what decision in the situation best supports our purpose?  What decision in the situation best matches, and brings to life, our values?” 

Our culture nurtures a more growth oriented and development mindset.

Many organizations have a fixed mindset with regards to talent—believing employees either have it, or they don’t.  These “culture-of-genius” companies tend to worship top talent, leaving other employees feeling unsupported in risk taking and innovation and lacking a sense of ownership.  Employees become frozen into limiting views about themselves, about their team or function, about their customers, about the competition, and about the company itself. 

A big part of the culture shaping process is unfreezing people and getting them to think differently than they historically have.  When a company operates with a mindset that employees can grow and improve with new opportunities, good strategies, and mentoring, it allows a culture of growth and development to flourish.  Employees who are not locked into limiting perceptions of what they can and cannot learn or accomplish are change ready; they are focused on the future, on innovative solutions for clients, and on agile responses to the market. 

We also learned that culture shifts are seen before they are felt.

Leadership will look at the company’s organization chart and begin to see measurable progress in the number of women and other diverse professionals represented, but the impact of those personnel changes on day-to-day culture may take some time to cascade throughout the organization.  For all of the effort and investment and honest good intent that goes into culture change initiatives, the personal experience of many employees is going to lag behind the initial execution.  If inclusion surveys aren’t glowing immediately, it likely reflects that lag and is not necessarily indicative of a failed attempt at culture change. 

This mission was personal for our CEO, Krishnan Rajagopalan. Krishnan has unique insight and empathy for what it means to be successful as a diverse individual over the course of a career.  Diversity and inclusion has always been very personal for him, and Heidrick’s employees feel that.   In fact, Krishnan raised the visibility of Heidrick’s commitment when he signed a pledge with Paradigm for Parity, publicly committing our firm to achieving gender parity by 2030. 

We learned first-hand that when company leaders are visibly committed in both word and deed to a culture of diversity and inclusion, they will accelerate the process of culture change.  When the board, the CEO, and top management actively participate in efforts to improve diversity and inclusion, it really makes a difference.  It makes a difference in terms of how people show up.  It makes a difference in terms of who shows up.  It makes a difference in terms of who leads.

For more on this topic, listen to a replay of a recent webinar, Diversity Laws Are Here: What Can Boards Do to Prepare? >>  


Heidrick & Struggles (Nasdaq: HSII) is a premier provider of executive search, leadership consulting and culture shaping services worldwide.  Richard “Rick” Greene is a partner in Heidrick & Struggles’ New York office and a member of Heidrick Consulting and the Financial Services Practice. From 2015-2018, he served as Heidrick’s chief human resources officer and was a member of the Management Committee. An active champion of diversity and inclusion, Rick created the Accelerating Women’s Excellence (AWE) leadership development program at Heidrick, for which he remains executive sponsor.


Get Board Ready with Veteran Corporate Director Betsy Atkins
Publication Date: March 15, 2019

In observance of Women’s History Month and International Women’s Day, Governance Clearinghouse is publishing a series of articles focused on gender balance on corporate boards. The series will highlight several facets of this complex issue, including pathways to board diversity, best practices of companies that have achieved gender parity in the boardroom, and the steps aspiring women directors can take to become “board ready.”

Betsy Atkins is a three-time CEO, serial entrepreneur and corporate governance expert, having served on over 30 boards.

I wrote my upcoming book BE BOARD READY: The Secrets to Landing a Board Seat and Being a Great Director as a guide for talented women who seek to be board ready and serve as high-impact, high-value contributing board members. I’ve had a number of opportunities to speak about board service, but one recent experience in particular was the catalyst for this book. Nasdaq invited me to participate on a panel with three other talented women directors, addressing an audience of over 100 aspiring women directors about the topic of board readiness. The Q&A segment following the panel discussion, and subsequent conversations with attendees who reached out to me afterward, made it clear there is a deep thirst for information about the path to board service.

Chapter Two of BE BOARD READY, which is shared here, takes a deep dive into the process of developing a pipeline of contacts that will lead you to prospective boards. Women professionals who aspire to board service need to elevate their networks to achieve their career aspirations. Developing relationships is like investing money in the bank and should be approached with the same discipline. This chapter from my book outlines best practices for expanding and leveraging your professional networks as you grow in your career. I hope these ideas will resonate as you read this excerpt from BE BOARD READY.

Whether you are an aspiring director who wants to join a board for the first time or are already on a board and looking for insights on how to be a great director, join me to celebrate the release of my new book in New York on Tuesday, April 9 or in San Francisco on Thursday, April 11. You must RSVP to attend as space is limited and available on a first-come, first-served basis.

To learn more and RSVP >>

Read Chapter Two, Business Development >>

outside insight
9 Pathways to Diversity Innovation and Better Strategic Risk Governance
Publication Date: March 5, 2019

In observance of Women’s History Month and International Women’s Day, Governance Clearinghouse is publishing a series of articles focused on gender balance on corporate boards.  The series will highlight several facets of this complex issue, including pathways to board diversity, best practices of companies that have achieved gender parity in the boardroom, and the steps aspiring women directors can take to become “board ready.”   

Andrea Bonime-Blanc is the founder and CEO of GEC Risk Advisory. Dante Alighieri Disparte is the founder and CEO of Risk Cooperative.

The imperative to equip the governance bodies of companies with diverse directors has never been higher – how the U.S. gets there is up for grabs. The EU has already made up its mind that this will be achieved through quotas. Other regions and countries like Canada require explanations of why diversity is low or does not exist. In the U.S., we have the first instance of a state establishing quotas – California – and where California leads other states often follow.  

Regardless of external regulatory or market pressures to move the needle on board diversity and inclusion, people see through half-hearted, check-the-box efforts.  Rather, companies and their boards, must view their closer approximation to the diversity in society as a net gain for their own resilience, decision making and competitive advantage.  More women on boards and at the head of the table or head of countries, just like more diversity of experience and backgrounds, will make for more fulsome decision making.  Diversity and inclusion should not be call-out efforts, but rather deliberate initiatives that become ingrained in the DNA of well-run companies.

Diversity improves returns – not only financial but reputational and stakeholder returns as well. Just like demographics, diversity is destiny and for boards that aim to capture this dividend, diversity and inclusion need to be incorporated into broad governance.

How do companies do this? We believe there are nine key pathways to board diversity.

1.   Establish a percentage target for diversity (gender, race, ethnicity, national origin, age) that is customized to your business needs.

Many (especially those already ensconced in board seats) abhor government regulations and mandates when it comes to board design. But when nothing changes, or change is glacial, others have come to accept that some government requirements for greater board diversity may not be so bad after all. Witness the recent California law mandating minimum gender diversity for California based companies.

What can companies do to either prevent or end new “onerous” governance laws? There is always the option to be proactive and look at your board, and look at your employee and customer base, and ask yourself the question: does our board reflect the stakeholder populations we serve? There is nothing like a voluntary corporate program to instigate positive change, reputational opportunity and value creation. Indeed, the more companies—and their boards—become a closer reflection of the diversity in society and markets, the less they will fear a reputational backlash for issues like the gender pay gap, the #MeToo movement or other “externalities”.

 2.   Broaden the talent pool with individuals skilled in the areas of risk, technology, sustainability, ethics and compliance.

Many boards do not include a broad enough pool of skillsets on the slate of possible board candidates. The vast majority of corporate board members are CEOs and CFOs, who on the one hand have clear skills in leading organizations and in financial accountability, but may lack refinement in wielding, responding to and appreciating the effects of “soft power” and intangible, unmeasurable threats – especially those that do not conform to quarterly reporting cycles. People (experienced and business-savvy of course) who hold expertise in areas other than the traditional silos of top financial and operational expertise, are seldom considered for board positions.

What about the treasure trove of highly experienced chief risk officers, chief ethics and compliance officers, heads of investor relations and corporate responsibility, audit, environmental, health and safety, chief information security or technology officers that are everywhere? Not all may be qualified to sit on a board, but undoubtedly the top 10% of these populations would make for an extraordinary addition to any board.  Broadening the diversity of skills tapped for boards is as critical as broadening the depth and breadth of diverse talent across all lines.

 3.   Reshuffle committees to represent current market realities and operating norms.

Most boards have the traditional 3-4 committees: audit, finance, nominating/governance and maybe one more; but rarely one that covers risk, sustainability, compliance and similar “intangibles” separately. Indeed, many boards’ audit committees are so oversaturated with responsibilities that anything that comes up that is seen as “extra” – whether ethics and compliance, risk, ESG, health and safety and recently cyber risk – gets thrown into the already overburdened audit committee.

We advocate that each company board look at the mission, vision and strategy of their company and decide what additional committee they might need to tackle their most important environmental, social, sustainability, ethics, technology issues, risks and opportunities. And, of course, in the process, review who on the current board is qualified and capable of being the chair or a member of such a committee. If there is no one present, maybe the time has come to search for a couple of non-traditional and diverse board members with relevant ESG and/or technology expertise?  Indeed, a novel concept to stay ahead of a growing market backlash or compliance-driven pressure to improve diversity and inclusion would be to establish a board-level committee to advance and defend these issues across the enterprise.  The UK’s laws on corporate reporting on gender pay are a good example of the growing pressure and the negative backlash faced by firms that were underperforming on the gender pay gap.  Pay parity, like diversity and inclusion, is not only the right thing to do it is a source of resilience, employee motivation and recruitment, as well as competitive advantage.

 4.   Separate risk and opportunity oversight from audit, perhaps by creating a specialized strategic risk and opportunity committee.

Very much along the lines expressed in point three above, and depending heavily on the industry, footprint and or sector involved, boards should be proactive in looking at their strategy from beyond the traditional mindset. Strategy is not just about growth, revenue and the search for profit, innovation and long term market gains. It is also about looking at strategic risk governance through the lens of the board, which includes considering risk as opportunity.

By separating strategic risk and opportunity evaluation from the audit committee, the board liberates itself from lumping risk into the audit committee’s core mission – financial auditing oversight – and allows other considerations to enter the board’s field of vision.

Strategic risk oversight is all too often a compliance-driven, check the box activity on most boards, which is why they often find themselves flat-footed and tone-deaf when “surprise” events and crises occur. By liberating important strategic issues – such as technology and digital transformation, climate change risk and opportunity, and leadership and culture as a competitive advantage – from the audit committee, companies and boards will breathe new life into their strategy formulation as they consider risk as part of opportunity creation.

 5.   Bring in third-party specialists to conduct scenario-based long-range analysis and cross-industry benchmarking.

Another step that can add to board diversity, at least to the diversity of views, is to consider introducing more innovative educational opportunities to the board.  This can be achieved through outside and inside experts that will help sensitize the board.  For example, experts can offer perspective on the potential crises that the augmented global risk landscape presents to every type of business today, such as culture shifts, cyber threats or climate change.

By dint of the kind of topic that can become a crisis, there is a diversity of experts available both inside the company and outside advisers who are not subject to “paycheck persuasion” to tell the board what they want to hear; these individuals can educate the board and perhaps become a member of the board over time.

 6.   Separate the CEO from the chair and strategic risk management oversight.

We believe this is a pro-diversity strategy by definition because many CEOs and board chairs suffer from deep diversity challenges. By having the amount of power that they do in a combined role, very little change is possible unless the person himself is in favor of improving governance diversity.  The operational benefits from this separation of powers have long been chronicled in the breakdown of decision making, risk management and the types of moral hazards that are bred when power remains unchecked.

In a recent piece we co-wrote for Risk Management Magazine, we detailed and made the case that if the boards of companies that had suffered recent serious crises and scandals had been more diverse leading up to their crisis, it would have helped prevent the crisis in the first place or enabled a more agile response and recovery. And in each of the cases mentioned, the CEO was also the Chairman of the board before and leading up to the crisis event.

 7.   Enforce term limits and cap the total number of concurrent board seats.

Again, this step is pro-diversity by definition because with more turnover and less entrenchment the opportunity for new and diverse members of a board grow substantially. 

Leading good governance advocates including some of the biggest asset managers such as Blackrock, State Street and some of the big state pension funds, have been on the record about preferring term limits for board members. Indeed, in this Harvard Law School Forum on Corporate Governance and Financial Regulation piece written by Jon Lukomnik, he reports on a study of major institutional investors responding to an ISS 2016-2017 Global Policy Survey in which:

 “Among the 120 institutional investors (one-third of whom each own or manage assets in excess of $100 billion) who responded, 68 percent pointed to a high proportion of directors with long tenure as cause for concern…Just 11 percent of the investor respondents said that tenure is not a concern.”

What this means in plain English is that boards that have tenures that are too long, or allow for repeated terms over time for the same person without limits, may not be serving the best interests of their shareholders or other key stakeholders – like customers and employees.

 8.   Create advisory committees of key outside experts to provide new perspectives.

While unusual and uncommon, such advisory committees can include less experienced but highly specialized, more diverse and helpful people who may not be ready for prime-time board seats but are promising candidates to be both listened to and mentored.

One area in which this practice can be specifically helpful is in the technology, cyber-security and digital transformation area, not to mention the clear generational shifts in populations. Most traditional board members are still current or retired CEOs and CFOs who did not grow up during the technological revolution. While it may be wise to have one or more board members with actual technology experience on your board, you might not be able to find the properly seasoned person to perform that role yet. Why not create a feeder advisory board to the corporate board that includes younger, more technologically savvy members who may one day make it to boards as well?

9.   Bring in independent, qualified directors and wean CEOs from the habit of appointing “friends and family” to the board.

The “friends and family” approach to board packing can be harmful to shareholders and other key stakeholders in the long run (and maybe even in the short run). By definition these kinds of boards are very un-diverse – mainly created by founders who are typically white men (although many can be fairly young as founders of tech start-ups).

We think that the long-term profitability and resilience of companies - and the acceptance and support of key stakeholders - is served well by the introduction of talented, meritorious board members who may not be friends and family to the founder or a powerfully entrenched CEO (who so often is also the chairman).

We also believe that the best governance solutions come from voluntary board self-evaluation with the help of the right experts to refresh your board. Boards should break out of the cycle of the self-fulfilling prophecies that most traditional board searches continue to do– with the same recycled profiles of people who are already on boards and have been vetted by the same handful of search firms. Such an approach will assure the continued un-diverse nature of many boards. Breaking that cycle will do the reverse - unearth the many non-traditional and highly qualified talents that are out there in search of board service.


Diversity is resilience, innovation and competitive advantage because diversity is destiny - both at the macrocosmic level of national demographics and at the microcosmic level of every company.

Andrea is the founder and CEO of GEC Risk Advisory providing strategic governance, risk, ethics and cyber advice to business, nonprofits and governments, and a board member, NACD Governance Leadership Fellow & Faculty Member. Her latest book – Gloom to Boom: How Leaders Transform Risk into Resilience and Value, will be published by Routledge in mid 2019.

Dante Alighieri Disparte is the founder and CEO of Risk Cooperative, a strategic advisory firm and insurance brokerage focused on risk, readiness and resilience. He is the co-author of the acclaimed book Global Risk Agility and Decision Making and the author of the forthcoming book, Supergovernance, to be published by Macmillan in mid 2019.

The views and opinions expressed herein are the views and opinions of the authors at the time of publication and may not be updated. They do not necessarily reflect those of Nasdaq, Inc. The content does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry or security mentioned herein and nothing contained herein should be construed as legal or investment advice.

3 Ways Blockchain Will Transform Capital Markets
Publication Date: February 26, 2019

Syed S. Hussain is CEO of Liquidity Digital, a fintech company that is developing an end-to-end platform to facilitate the issuance of digital securities through blockchain technology.

A number of metaphors are being thrown around regarding the innovative potential of blockchain technology, including comparisons to the printing press, steam engine, antibiotics, and the internet. But despite high level talks of societal change, there seems to be no true historical parallel to rival the growing impact and future implications of blockchain technology, especially in how transformative it could be for global capital markets.

So what makes blockchain such a game changer? When focusing on current trends in the space, even the casual observer interested in financial use cases is most often drawn toward the concept of Digital Security Offerings (DSOs).  

At its most basic level, a digital security is a digital representation of an equity or debt security that can be bought and sold online, and is recorded on a blockchain-based distributed ledger. A DSO is the offering of digital securities to usually geographically-disparate investors who then trade them on secondary market platforms, which in turn bring liquidity to their global counterparts.  DSOs will revolutionize the securities markets in a myriad of ways, but for now we’ll focus on three key impacts: accessibility, transparency, and liquidity.


One of the most interesting, impactful, and truly innovative changes that DSOs offer is encapsulated by the term accessibility, sometimes referred to as financial democratization. There are two essential components to this:  time and geography.

At present, traditional stock exchanges are closed more hours a week than open. With digital securities exchanges, this will not be the case as they will be open 24 hours a day, seven days a week, 365 days a year. In fact, securities that sit on these new generation of exchanges will have just one opening bell to signal the start of trading into perpetuity. This will greatly increase market accessibility because access to your investments will not be on a rigid schedule that limits the time and place of trading. Thus, if you thought of a great investment opportunity while watching CNBC on Saturday night, the new structure of securities trading would allow you to execute that transaction at that moment, with minimum time and energy. The rush of orders placed at the opening bell, and the high-frequency trading and high order volume that occurs around that time, will be replaced by a constant stream of 24/7 accessibility.

Second, geographic barriers to capital market access will be eliminated due to the decentralized nature of the blockchain. In a fully matured landscape for digital security offerings, investors worldwide with funds and an internet connection can participate in opportunities throughout the world (assuming they pass KYC and AML checks).  This will be the true democratization of the global financial system, as even small actors can theoretically invest or access capital at rates similar to larger institutions.  Issuers and investors alike should tread carefully, however, because regulators across the globe mandate differing levels of registration with or exemption from securities laws.  And those laws will continue to evolve for the foreseeable future. 


True transparency will fundamentally transform capital markets and provide a basis on which to grow new asset classes, as well as to clarify existing ones. 

Often used as a buzzword for blockchain, transparency is already playing a direct role in the growth of the digital securities ecosystem. In a securities transaction, who can you trust to ensure that you receive the fruits of your investment? Where does that baseline, that foundation that makes value transfer possible, come from? Right now, it’s an often highly-paid third party such as a trustee who ensures funds are distributed appropriately and consistent with contractual expectations. But with digital securities, that trust is a basic component built into the architecture of interactions: Who can you trust? The blockchain.

Within this context, transparency is trust’s essential core component. Every trading operation, issuance application, dividend payout and smart contract execution is transparently recorded on the blockchain to improve the overall securities ecosystem experience. This is an immensely powerful tool which seeks to prevent fraud and theft and will be massively important for payment companies such as PayPal as they navigate and adapt to the new blockchain-based monetary landscape.


Another fundamental impact of the DSO is liquidity.  Indeed, this is what has generated the most excitement in the securities space. The introduction of digitized securities into capital markets promises to increase dramatically the pace and quantity of capital transactions.

There are many different factors that interact in this ecosystem to produce heightened liquidity. Here I’ll highlight just two:  fractional ownership and asset fungibility.

Fractional ownership refers to the property of digital securities that allows them to be divided and sold as a part of the whole. For instance, an apartment worth $100,000 in Chicago may be tokenized and issued as 100 security tokens each representing $1,000. But what if I only have $100 to invest? Fractional ownership neutralizes that problem because I can still invest my $100 by purchasing 1/10 of a digital security that will experience the same rates of return as if I owned the whole apartment.

This drives liquidity by enabling smaller investors to participate, lowering the barriers to entry and increasing transaction turnover. Increased liquidity in capital markets also creates an associated liquidity premium, which essentially increases the asset value as a percentage of the whole.

The second major factor is the fungibility of asset classes. Simply put, if distinct asset classes when digitized and securitized are able to be traded interchangeably, the probability of liquidity events increases dramatically. Consider the example above of a digitized apartment. What’s stopping you from trading that 1/10 of a digital security for $100 worth of U.S. Treasury Bond securities? Absolutely nothing!

Many view fungibility to be the essential revolutionary element in the development of digital securities. No longer will investors need to partially divest from the stock exchange in order to diversify into other asset classes such as bonds and real estate. Access to digitized investments of all shapes and sizes, from more dependable long-term funds and bonds to quick day-trading equities, will be available to a much larger percentage of the world, thereby driving a veritable explosion of liquidity events.

The digitization and securitization of assets will in turn bring enhancements to blockchain technologies, particularly in the areas of security and compliance.

A fundamental concept underpinning the development of blockchain technology and the resultant DSO field is the security of digital assets. Similar to legacy banking, confidence in the system is based on the assumption that assets or their monetary equivalents are reasonably safe and cannot easily be stolen (and if they are, the assets are backed by insurance). Even though there are weaknesses inherent in any new technology, the current improvement rate of cryptographic security protocols is very high, and many companies are developing institutional-grade custody solutions.  When stored online with best-in-class custody providers or offline in cold storage, the risk that those funds will be stolen or lost is minimized.

Additionally, companies such as Microsoft and Amazon are highly involved in the back-end of this paradigm shift towards blockchain-based securities trading. They are eager to provide secure storage and processing solutions for as many start-up or institutional players as they possibly can.  This in turn brings much-needed stability to the arena. Therefore, especially in the nascent DSO industry where the security of digital assets is paramount, established partners and a custodial product strategy that remains far nimbler than the threats made against it are absolutely necessary, and thankfully, are becoming easier to find.

In terms of compliance, the Securities and Exchange Commission (SEC) has now made it clear that it has yet to come across an initial coin offering (ICO) that was not also an issuance of unregistered securities. At the end of 2018, SEC Chairman Jay Clayton commented: “If you finance a venture with a token offering, you should start with the assumption that it is a security.”

The prevailing wisdom has thus adapted, and come to dictate, that projects be proactive about approaching regulatory bodies with a plan to register their offering or issue it through an exemption, and that entities enabling the trading of DSOs register as a securities exchange or an alternative trading system. Some issuance platforms have developed their own compliant digital securities models, underwriters are preparing appropriate due diligence, and exchanges are suspending and banning fraudulent actors.

Here is where things get interesting for national securities exchanges and the companies listed on them:  The regulation and standardization of digital securities allows the industry to finally progress through the initial stages of trepidation and uncertainty to solidify processes like ensuring compliant tokenomics design and offering structure. Just as it did to the nascent institutions of the American West during the late 19th century, the imposition of regulatory order on the ‘wild west’ of blockchain-based currencies will enable new and exciting possibilities to take root and grow into stable, well-functioning pillars of the new digital economy.


Syed S. Hussain is CEO of Liquidity Digital, a fintech company that is developing an end-to-end platform to facilitate the issuance of digital securities through blockchain technology.  Liquidity Digital is backed by Soramitsu, a blockchain technology company which is part of the Linux consortium and developer of the Hyperledger Iroha protocol.

The views and opinions expressed herein are the views and opinions of the contributor at the time of publication and may not be updated. They do not necessarily reflect those of Nasdaq, Inc. The content is for informational purposes only and does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry or security mentioned herein and nothing contained herein should be construed as legal, tax, investment, financial, or other advice. Nothing contained herein constitutes a solicitation, recommendation, endorsement, or offer by anyone to buy or sell any securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. 

proxy season
5 Ways Governance Teams Can Step Up Their Proxy Season Game for 2019
Publication Date: February 14, 2019 

To help governance professionals understand and address the evolving concerns of shareholders, Martyn Chapman, head of strategy for Nasdaq Governance Solutions, together with Dan Romito and Ben Maiden from Corporate Secretary, recently hosted a webinar.  Among other things, our hosts shared these five ideas to help governance professionals step up their proxy season game for 2019:

1) Hold virtual or hybrid annual meetings.

 Virtual and hybrid annual general meetings (AGMs) are becoming increasingly popular, particularly in the U.S. where shareholders are often dispersed over a very large geographic area.  If your company hasn’t yet implemented virtual attendance at AGMs, it isn’t too soon to begin planning for next year. Following are some key considerations when preparing to transition to virtual annual meetings:

  • Engage a vendor that provides robust and reliable technology.  There are already many providers in this space, and a number of them partner with registrars and transfer agents. 
  • Investigate legal and regulatory requirements.  Whether an annual meeting is virtual or hybrid, meeting requirements still apply, including those that govern notice, decorum, attendance, material display, and voting, among others.   The company’s articles of incorporation and/or bylaws may need to be amended to provide for virtual annual general meetings.   Among other things, amendments should cover any failure in technology, even if it affects only one or a few shareholders.  For example, the chair may not be able to put forward a resolution to shareholders to adjourn a meeting if there is a severe technical problem during a fully virtual meeting, so the articles should provide the chair the ability under these circumstances to adjourn the meeting without a resolution.
  • Consult with major stakeholders.  Most companies will want to consult with their key shareholders to be sure they are comfortable with virtual general meetings.  Some shareholders may react adversely if there is a long-standing tradition of well attended physical meetings.  Putting forward a resolution to ratify amendments to the articles of incorporation to hold virtual AGMs is a good opportunity to discover shareholder appetite for a virtual or hybrid meeting format.  Other stakeholders to consider are service providers, registrars and transfer agents, and any vendors who would be providing technology.

2) Control your company’s ESG narrative to neutralize potential shareholder proposals.

 Environmental, Social and Governance (ESG) issues are here to stay.  Morrow Sodali’s 2018 Institutional Investor Survey states this unequivocally: “ESG issues are either fully integrated or progressing towards full integration with investment decision-making.” That survey listed the following ESG topics as top concerns of institutional investors:

  • Board skills and experience.  Investors are focused not just on the reputation of a board member but the skills that individual brings to the table.  If a board lacks a critical skill such as cyber security experience, investors will likely become concerned. 
  • Climate risk disclosure.  This issue is industry and sector dependent because some industries have a bigger impact on climate than others.  But investors are not just concerned about a company’s impact on the climate—they also want to know that companies are assessing the impact of climate change on the long-term sustainability of their core businesses and taking steps to prepare for that risk. 
  • Executive compensation.  Investors are wary of what they perceive as excess compensation or excess severance.  For context on what index funds view as “excess,” BlackRock outlined their perspective on executive pay in their 2018 stewardship guidelines.

Companies are increasingly finding that better engagement on ESG issues leads to shareholder proposals being dropped—or not filed in the first place.  Best in class engagement is proactive engagement, because by the time institutional shareholders reach out to you with an issue, they often already have made up their minds. 

3) Explain your company’s human capital management strategy.

Human capital management (HCM) has become an investment issue.  Massive amounts of data can now be accessed and analyzed across a multitude of companies, which has allowed investors to unearth correlations between human resource initiatives and investment outcomes.  Investors are keeping a closer eye on labor markets.  In BlackRock’s 2018 stewardship guidelines, they reported “In light of evolving market trends like shortages of skilled labor, uneven wage growth, and technology that is transforming the labor market, many companies and investors consider robust HCM a competitive advantage.” 

Companies need to articulate how they’ve established themselves as an employer of choice for the workers they depend upon. The company’s approach to HCM, including employee development, diversity, a commitment to equal employment opportunities, health and safety, supply chain, labor relations, and labor standards, is viewed as a factor in the continuity—and ultimately the success—of the business. 

BlackRock is a good litmus test on investor attitudes towards HCM, and they are encouraging companies to go a step beyond providing commentary and begin to bring transparency to HCM data and practices.  Investors know that companies possess data on their workforce to help investors distinguish companies that are managing HCM matters more strongly than those who are not. 

4) Help investors understand how data is protected and utilized.

2018 was a year chock full of stories in the media about data breaches and data sensitivity issues, stories that adversely impacted a wide variety of companies.  Society in general—and investors in particular—were caught off guard by the manner in how data is protected and utilized.  Yet a vast majority of companies still don’t disclose (to the degree that investors would prefer) what they actually do with their data and how that data is protected. 

Given the trajectory of big data, investors generally understand that data will continue to be utilized in new ways, but they want more disclosure and transparency (especially from a risk management perspective) around how that data will be protected and utilized, both now and in the foreseeable future.

5) Create a cyber risk management dashboard and give the board access to the CISO.

Cyber risk management covers a broader spectrum than data protection, and while investors do not expect all board members to possess deep cyber security expertise, they do want assurance that the board has incorporated cyber security oversight into the risk management process.  Corporate secretaries and other governance professionals can support the board in this effort by ensuring the board has some form of dashboard or metrics that provide a regular overview of the strategic implementation of the company’s cyber risk program.

Because cyber risk is so technical in nature and changing so rapidly, another best practice is to ensure that the board has access to the CISO (chief information security officer).  The corporate secretary can play a key role in helping to bring together board members and those responsible in the organization for the implementation of cyber risk management. For example, it can be very useful to buddy up particular board members with the CISO, especially board members who are on committees tasked with cyber security and/or risk management oversight.  Some companies schedule private management meetings between board committee chairs and the CISO to get a better grasp of the issues. 

Listen to the full webinar: Looking Ahead: How GRC Teams Can Prep for 2019>>


Martyn Chapman serves as Head of Strategy for Nasdaq Governance Solutions, supporting product development and commercial strategies for Nasdaq’s flagship governance offering, Nasdaq Boardvantage. He has over 15 years of governance industry experience serving boards of FTSE100 and Fortune 500 companies with a focus on innovating corporate governance practices through technology.

 Daniel Romito is Global Head of Investor Analytics at Nasdaq where he oversees Nasdaq’s Strategic Capital Intelligence team, Insight360 Analytics Platform, and ESG index consulting and manages a global roster of advisory clients. His advisory work focuses on consulting management teams across the globe on optimizing capital allocation strategies, mitigating risk within their shareholder base and identifying opportunistic investors.

 Ben Maiden is editor of Corporate Secretary, a digital and print platform providing a forum where governance experts and service providers can share their experience, insights and best practice recommendations on a wide range of critical governance issues. 

Revitalize Banner

Try These 5 Ideas to Foster Better Dynamics in Your Boardroom
Publication Date: January 23, 2019

Boardroom dynamics can make or break the effectiveness of a board. This could be why more than 600 governance professionals signed up for a recent webinar co-hosted by Martyn Chapman, head of strategy for Nasdaq Governance Solutions, and David Shaw, editor and publishing director for Directors & Boards magazine. While the webinar focused on the Seven Tactics to Engineer Better Boardroom Dynamics per a recent Governance Clearinghouse post, our hosts also brought new insights to executing these tactics, sharing these five new ideas that governance professionals can use to re-energize and refresh the dynamics in their own companies' boardrooms.

1) Design and implement a "reboarding" strategy.

An emerging practice, one the governance community may be hearing more about, is "reboarding." Reboarding is a process of re-energizing and refreshing the board without changing any of the existing players. 

Reboarding is useful for directors who have been on a board for a very long time, or for an organization that has changed its business or operational paradigm significantly during the tenure of the existing board. For example, if a corporate board has pivoted its focus to more technology-based business operations, such as expanding from traditional retail stores to online selling, it will need to change its approach. The re-boarding process can help a tenured board better understand how the business operates in its new domain, as well the new risks (such as cyber risk) that the company faces.  Re-boarding could become a useful element of continuing professional development for a board.

Whether onboarding a new director or reboarding tenured ones, it’s important to look at the particular passions, expertise and backgrounds of board members.  The program should be individually tailored to ensure each member has access to the right information and makes the right connections with appropriate members of management.

2) Encourage communication between board members and management outside of the boardroom.

Ideally, board members "keep their noses in but their fingers out" of running the business.  Boards walk a fine line between immersing themselves in company business and encroaching on the role of management, so any engagement between board members and management should be carefully supervised.  A strong Corporate Secretary has the institutional knowledge and cultural fluency to be the key person in the organization to facilitate communications between board members and management that take place outside of board meetings.

The appropriate level of engagement between the board and company management is defined by a company's corporate culture and should be shared with board members during the onboarding process. 

3) Bring the business to life with site visits.

Site visits are an excellent means of engaging board members and sparking knowledge sharing between board members and management.  Companies can host board meetings at sites that are of significant operational value to them, such as factories, storefronts, or mines.  New projects are also exciting to visit, such as a tunnel being built or a new research facility. These trips bring to life a better understanding of the business and foster a board that is more in touch with the company and its operations. 

4) Actively manage tension to minimize the likelihood that tensions escalate into conflicts.

Challenge and debate are key to a board’s effective oversight of management, stimulating new ideas and leading to robust decision-making.  When managed properly, tension and conflict form an integral part of boardroom dynamics.

There is a distinction between healthy tension and unhealthy conflict, and it is important to embrace the difference between the two. Tension, from a board perspective, is a disagreement which is uncomfortable but can be addressed by healthy debate.  Conflict arises when that tension becomes aggressive and escalates to unresolvable levels. 

There are three issues that tend to lead to tension and conflict in the boardroom:

  • people and personality matters (i.e., retention, recruitment, compensation);
  • historical disputes (issues and concerns that weren’t resolved, decisions where certain directors were not fully on board, transactions rife with conflict); and
  • decision making (fundamental disagreements over strategy or particular actions proposed by the board).

It is important to identify how tension and conflict present themselves in the boardroom. Healthy tension can present as discomfort when discussing difficult topics, during open exchanges of information, and when directors are engaged in robust debate.  Red flags that signify a conflict may be brewing are:

  • passive-aggressive behaviors, such as board members who do not engage in a discussion or are overly polite or detached when responding to difficult questions;
  • repeating a point;
  • overly interrogative or heavy-handed questioning;
  • pushing debate offline or out of the boardroom; and
  • physical actions such as slapping on tables, banging glasses or leaving the room.

Tension generally tips into conflict when discussions become emotionally charged.  There are strategies that the board chair, Corporate Secretary or CEO can take to manage tension and minimize the likelihood of tensions escalating into conflicts:

  • Explicitly acknowledge and address concerns during the board meetings.  Concerns that are ignored or not fully addressed can plant seeds for conflict later.
  • Hold face-to-face conversations between the chairman and the conflicted parties (either one-on-one or in a group). These conversations work best when the board chair targets individual members with specific issues ahead of board meetings in informal settings outside the boardroom. 
  • Remind board members of the higher purpose of what they are working toward, who they are working for, who they are representing.  The board chair plays a key role in that as well.
  • Sit opposing board members next to each other during board meetings.

5) Add an "extra" member to each board committee.

An emerging practice among company boards is to assign at least one more member to each committee than is required by listing rules. This provides a margin of compliance if a member is suddenly no longer available to serve, and also allows boards to more easily rotate one of the committee members each year.  Rotating committee memberships keeps viewpoints fresh, exposes board members to new aspects of company’s business and creates new working relationships between and among board members. 

Listen to the full webinar: 7 Steps to Better Boardroom Dynamics>>

Read the companion article: Seven Tactics to Engineer Better Boardroom Dynamics>>


Martyn Chapman serves as Head of Strategy for Nasdaq Governance Solutions, supporting product development and commercial strategies for Nasdaq’s flagship governance offering, Nasdaq Boardvantage. He has over 15 years of governance industry experience serving boards of FTSE100 and Fortune 500 companies with a focus on innovating corporate governance practices through technology.

David Shaw is editor and publishing director of Directors & Boards, a quarterly print and digital journal dedicated to the topics of leadership and corporate governance.


Listing Center RSS Feed Listing Center Content RSS Feed

In the News
SEC Proposes Amendments to More Appropriately Tailor the Accelerated and Large Accelerated Filer Definitions
Publication Date: May 10, 2019

The Securities and Exchange Commission voted to propose amendments to the accelerated filer and large accelerated filer definitions. The proposed amendments would reduce costs for certain lower-revenue companies by tailoring the types of companies that are categorized as accelerated and large accelerated filers while maintaining effective investor protections.

As a result of the proposed amendments, smaller reporting companies with less than $100 million in revenues would not be required to obtain an attestation of their internal control over financial reporting (ICFR) from an independent outside auditor. The proposed amendments would not change key protections from the Sarbanes-Oxley Act of 2002, such as independent audit committee requirements, CEO and CFO certifications of financial reports, or the requirement that companies continue to establish, maintain, and assess the effectiveness of their ICFR.


Nasdaq's response to the SEC's proposed expansion of the "TEST THE WATERS" accommodation to all issuers
Publication Date: May 01, 2019 

On April 29, 2019, Nasdaq issued a comment letter on the SEC's proposal to allow all issuers, rather than just emerging growth companies, to engage in "test the waters" communications with certain qualified investors to gauge the market for a potential offering prior to or following the filing of a registration statement.  Nasdaq commended the SEC for considering reforms to improve the environment for public companies and explained how the proposal will benefit both issuers and investors.

View Nasdaq's comment letter here >>

SEC Adopts Rules to Modernize and Simplify Disclosure
Publication Date: March 28, 2019 

The SEC approved changes designed to modernize and simplify their disclosure rules, including eliminating several duplicative disclosures.  The changes will also allow management more flexibility in drafting the historical discussion in the MD&A. The review that led to these changes was mandated by the FAST Act. Nasdaq submitted a comment letter supporting the SEC efforts to reduce and simplify disclosure and in favor of most of the proposed change. 

Among other things, the amendments: simplify disclosure, including changes that would allow registrants to omit confidential information from most exhibits without filing a confidential treatment request; revise rules or forms to update, streamline or otherwise improve the Commission’s disclosure framework, including by eliminating the risk factor examples listed in the disclosure requirement; and, incorporate technology to improve access to information.


Revitalize Banner

App Store       Google Play       Windows Store       Listing Center Content RSS Feed
The Nasdaq Stock Market, Nasdaq, The Nasdaq Global Select Market, The Nasdaq Global Market, The Nasdaq Capital Market, ExACT and Exchange Analysis and Compliance Tracking system are trademarks of Nasdaq, Inc.
FINRA® and Financial Industry Regulatory Authority, Inc.® are registered trademarks of Financial Industry Regulatory Authority, Inc. OTCBBTM and OTC Bulletin BoardTM are trademarks of FINRA