In this Issue: The 100 Most Influential People in the Boardroom Social Media & The Boardroom: Critical Questions Directors Need to Ask Michael Volkov on Whistleblowers What's Next? The Top Issues of 2013 and Beyond H-P: Is There a Miraculous Recovery Ahead? The Future of Directorship: Key Takeaways Buy Me, Sell Me, Sue Me Paul Ferrillo on Post Dodd-Frank Priorities Jeff Rosenblum on The Naked Brand The Next Big Superstorm Sandy Story: Are We Really in Good Hands? Blogs Worth Following LEVICK in the News www.levick.com/insights

1. EDITION 18
Weekly November 30, 2012
Special Issue:
Boardroom Challenges
Social Media
& The Boardroom:
Critical Questions Directors Need To Ask
Month 1
Month 2
Month 3 34% 58% 28%
Month 4
LinkedIn Network Weekly Growth Twitter Favorite Rate Twitter Retreet Rate Twitter Monthly Growth Rate Facebook Yearly Activity
= 10 New Connections Likes Friends Posts Shares

2. This November, the National Association of Corporate Directors (NACD) released its annual list of The
100 Most Influential People in the Boardroom. In this special edition of LEVICK Weekly, we are pleased
to present that prestigious list in its entirety along with in-depth articles and interviews discussing the
challenges and opportunities facing boards today.
03 Contents
04 The 100 Most Influential People
In the Board Room
12 SOCIAL MEDIA & THE BOARDROOM:
Critical Questions Directors Need To Ask
19 MICHAEL VOLKOV
on Whistleblowers
20 What’s Next?
The Top Issues of 2013 and Beyond
30 H-P: IS THERE A MIRACULOUS
RECOVERY AHEAD?
33 THE FUTURE OF DIRECTORSHIP:
Key Takeaways
34 Buy Me, Sell Me,
Sue Me
also in this issue...
Month 1
39 PAUL FERRILLO
on Post-Election Dodd-Frank Priorities
40
Month 2
Month 3 34% 58% 28% JEFF ROSENBLUM
Month 4
on The Naked Brand
LinkedIn Network Weekly Growth Twitter Favorite Rate Twitter Retreet Rate Twitter Monthly Growth Rate Facebook Yearly Activity
42 The Next Big Superstorm Sandy Story:
= 10 New Connections Likes Friends Posts Shares
Are We Really in Good Hands?
COVER Image: Social media employ web- and mobile-based technologies to support interactive dialogue and “introduce
47 Blogs
Worth Following
48
substantial and pervasive changes to communication between organizations, communities, and individuals.” Andreas
Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological
LEVICK
In the News
and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.

3. the 100 NACD Directorship Mathis Cabiallavetta Kent Foster
Most Influential People
Chair, Finance and Risk Chair, Human Resources and
100: Directors Committee; Swiss Re Compensation Committee;
J.C. Penney
Josef Ackermann Norm Champ
in the Boardroom Chairman of the Board;
Zurich
Director, SEC Division of
Investment Management
Brenda J. Gaines
Director; Office Depot
Gilbert F. Amelio Arthur D. Collins, Jr. Raymond V. Gilmartin
Chair, Human Resources; Chair, Compensation Chair, Corporate Governance;
AT&T Committee; Boeing General Mills
James L. Barksdale Scott Cook David R. Goode
Chair, Information Technology Chair; Innovation Technology Chair, Personnel and
NACD B. Kenneth West Lifetime Achievement Award Oversight; FedEx Procter & Gamble Compensation Committee;
Delta Air Lines
Jack B. Lowe, Jr./ Edward Barnholt Robert W. Cook
Chairman; Zale Corporation; TDIndustries Chair, Compensation Director; SEC Division William H. Gray, III
Committee; eBay of Trading and Markets Chair, Corporate Governance
Lowe became CEO and board chair of TDIndustries, one of America's premier spe-
and Ethics; Prudential
cialty contracting companies in 1980. For 15 consecutive years, the company has Gordon M. Bethune Alexander M. Cutler
appeared in Fortune magazine's list of the "100 Best Companies to Work in Amer- Chair, Compensation Director; DuPont Cheryl Grise
ica". In his career, Lowe has been active in many civic and industry organizations Committee; Sprint Nextel Chair, Governance and
and is a former trustee of the Dallas Independent School District. Domenico De Sole Corporate Responsibility;
W. Frank Blount Director; Gap MetLife
Chair, Nominating/
Governance Committee; KBR Susan L. Decker Myra M. Hart
Lead Director; Intel Governance, Membership
NACD Directors of the Year Samuel F. Bodman, III and Public Affairs Committee;
Chair, Compensation Robert E. Denham Kraft Foods
Committee; Weatherford Intl. Lead Director; Chevron
William S. Ayer Linda Rabbitt
Chairman; Alaska Air Group Founder, Chairman and Chief Michael Boskin Jane E. Henney, M.D.
Executive Officer; Rand Con- Nick Donofrio Chair, Nominating/
Chair, Audit Committee; Director; Delphi Automotive
A veteran of more than three struction Corp. Lead Indepen- Governance Committee;
ExxonMobil
decades in aviation, Ayer dent Director, Towers Watson AmerisourceBergen
is the incoming chairman David W. Dorman
Rabbitt is the current chair of
James T. Brady Chairman of the Board; CVS Enrique Hernandez, Jr.
of the NextGen Advisory
Chair, Audit Committee;
Council, a panel of aviation the Federal City Council, is on Chairman of the Board;
industry leaders who are working with the the board of the Economic Club of Washington
T. Rowe Price Group Dina Dublon Nordstrom
and is a trustee of George Washington Univer- Chair, Audit Committee;
FAA to modernize the nation's air traffic con- Gregory D. Brenneman
sity. She is a director and deputy chair of the PepsiCo Bonnie G. Hill
trol system and improve airport and airspace Chair, Compensation
efficiency. In addition, he is vice chairman of Federal Reserve Bank in Richmond, Va. Chair, Nominating Governance
Committee; Home Depot William J. Fallon Committee; Home Depot
the Museum of Flight and serves on the Angel
Chairman of the Board;
Flight West Foundation board. He is a regent Peter C. Browning CounterTack Mellody L. Hobson
at the University of Washington and vice chair Chair, Nominating/Governance
of the University of Washington Foundation. Director; Groupon
Committee; Nucor Oscar Fanjul
Chair, Finance Committee; Irvine O. Hockaday, Jr.
Ursula M. Burns Marsh & McLennan Director; Ford Motor Co.
Director; American Express Companies
NACD Directorship 100: Hall of Fame Mary K. Bush Edward Neville Isdell
Bill Ford, Jr. Director; General Motors
Director; Discover Financial Chairman of the Board
William B. Chandler, III James D. Robinson, III Services Ford Motor Co.
Partner; Wilson Sonsini Goodrich & Rosati Chair, Directors and Corporate Governance;
Coca-Cola
04 05

4. Weekly
Shirley Ann Jackson Alex J. Mandl Georgia R. Nelson Susan C. Schwab Christine T. Whitman, Spencer T. Bachus
Chair, Audit Committee; Lead Director & Chair, Audit Chair, Compensation Committee; Director; Boeing Governor Chairman, House Financial
Marathon Oil Co. Committee; Dell Cummins Chair, Governance and Services Committee; Congress
H. Hugh Shelton Stockholder Relations;
Suzanne Nora Johnson Siri S. Marshall Donald T. Nicolaisen Chairman of the Board; Texas Instruments Stephen Bainbridge
Director; Pfizer Chair, Nominating/Governance Chair, Audit Committee; Red Hat William D. Warren,
Committee; Ameriprise Verizon Communications Donna F. Zarcone Distinguished Professor of
Jim Kilts, Jr. Financial Ronald L. Skates Chair, Audit Committee; Law; UCLA School of Law
Chair, Compensation Harald J. Norvik Director; Courier Corporation CIGNA
Committee; Pfizer Arthur C. Martinez Director; ConocoPhillips Maria Bartiromo
Lead Director; International James A. Skinner Carlo V. di Florio Anchor, Closing Bell; CNBC
Ellen J. Kullman Flavors & Fragrances Charles H. Noski Chairman of the Board; Director; SEC Office of
Chairman of the Board and Chair, Audit Committee, Walgreen Compliance Inspections David H. Batchelder
CEO; DuPont Deryck Maughan Microsoft and Examinations Principal, Founder, member
Director; Glaxo SmithKline Joan E. Spero of Investment Committee;
Maria Lagomasino Sam Nunn, Jr. Director; IBM Relational Investors
Chair, Compensation Stanley A. McChrystal, Chair, Public Responsibility;
Committee; Coca-Cola Ret. USA General Electric Judith Sprieser NACD Directorship Lucian Bebchuk
Director of the Program on
Fred Langhammer Director; JetBlue Airways Chair, Audit Committee; 100: Governance Corporate Governance;
Dean R. O'Hare Allstate
Chair, Compensation Douglas H. McCorkindale Chair, Audit Committee; Professionals and Harvard Law School
Committee; Walt Disney Chair, Nominating/Governance H.J. Heinz Thomas Stemberg Institutions Irv Becker
Committee; Lockheed Martin Chair Compensation
Sherry Lansing Samuel J. Palmisano National Practice Leader of
Chair, Governance Committee; Committee; Lululemon Greg Abott the Executive Compensation
Blythe J. McGarvie Chairman of the Board; IBM Athletica Attorney General; State
Qualcomm Chair, Audit Committee; Viacom Practice; Hay Group
of Texas
Helmut Panke Randall L. Stephenson
Jan Leschly Terry McGraw, III Chair, Antitrust Compliance; Richard A. Bennett
Chair, Compensation & Chairman, President, Wiliam Ackman Chairman; GMI
Chair, Nom Gov Committee; Microsoft CEO; AT&T CEO, Founder; Pershing
Benefits; American Express Phillips 66 Square Capital Management Robert Bennett
William D. Perez James S. Tisch
Stuart R. Levine Andrew J. McKenna, Sr. Chair, Nominating/Governance Partner; Hogan Lovells
Chair, Nominating/Governance Director; General Electric Joseph Adams
Chairman of the Board; Committee; Johnson & Johnson Managing Partner, CEO
Committee; Broadridge McDonald's Max W. Berger
Financial Solutions Solomon D. Trujillo McGladrey Partner; Bernstein Litowitz
David S. Pottruck Chair, Corporate
Heidi Miller Chair, Compensation Committee; Berger & Grossman LLP
Arthur Levinson Responsibility; Target Luis A. Aguilar
Director; General Mills Intel Commissioner
Chairman of the Board; Apple Carolyn Berger
Laura D'Andrea Tyson SEC Justice; Delaware Supreme
M. Christian Mitchell Linda Rice Director; AT&T
Ann M. Livermore Chairman of the Board; REIS Director; Kimberly-Clark Court
Director; UPS William T. Allen
Peter Ueberroth Director; NYU Pollack Center Stanley D. Bernstein
Nicholas G. Moore Patricia F. Russo Director; Coca-Cola
Edward J. Ludwig Chair, Audit & Examination; Lead Director; General Motors
for Law and Business Partner; Bernstein Liebhard
Lead Director and Chair, Wells Fargo
Investment and Finance Craig Weatherup Charles Allen Kenneth A. Bertsch
Thomas O. Ryder Lead Director; Starbucks CEO; Crowe Horwath
Committee; Aetna Anne M. Mulcahy Chair, Audit Committee; Amazon President and CEO; Society
Director; Johnson & Johnson of Corporate Secretaries &
Christopher S. Lynch Arthur F. Weinbach Donna F. Anderson
Paul Sagan Chairman of the Board; Vice President and Corporate
Governance Professionals
Chair, Audit Committee; AIG Leo F. Mullin Chair, Nominating and Corp CA Technologies Governance Specialist; T. Glenn Booraem
Chair, Public Policy; Johnson Governance; iRobot
Fred V. Malek & Johnson
Rowe Price Fund Controller, Principal;
Chair, Compensation Robert E. Weissman
Ronald F. Sargent Chair, Nominating/ Francis J. Aquila
Vanguard Group
Committee; CBRE Group Richard B. Myers, Ret. USAF Chair, Audit Committee Governance Committee; Partner; Sullivan & Cromwell
Director; United Technologies Kroger Cognizant Technology
Solutions
06 07

5. Weekly
Carol Bowie James Copland Michael Dowd Abe Friedman Bonnie W. Gwin Brad S. Karp
Head, Compensation Director, Center for Legal Partner; Robbins Geller Former Head of Vice Chairman; Heidrick & Chairman; Paul, Weiss, Rifkind,
Policy; ISS Policy; Manhattan Institute Rudman & Dowd LLP Governance; BlackRock Struggles Wharton & Garrison
Richard C. Breeden Richard Cordray Theodore L. Dysart Eric Friedman Steven E. Hall David A. Katz
Founder, Chairman, CEO, Director; Consumer Financial Vice Chairman; Heidrick & Executive Partner; Partner, Managing Director Partner; Wachtell, Lipton,
Chief Investment Officer; Protection Bureau Struggles Skadden, Arps, Slate, Steven Hall & Partners Rosen & Katz
Breeden Capital Management Meagher & Flom
Meredith Cross David K. Eaton Robert E. Hallagan William Kelly
Duke Bristow Director, Division of Corporate Vice President of Proxy Robert M. Galford Managing Director, Vice Corporate Partner; Davis
Associate Professor of Finance; SEC Research, Glass Lewis & Co. Managing Partner; Center Chairman-Board Leadership Polk & Wardwell
Clinical Finance and Business for Leading Organizations Services; Korn/Ferry
Economics; USC Marshall Keith T. Darcy Richard Edelman International Robert Khuzami
School of Business Executive Director; Ethics President and CEO; Edelman Daniel Gallagher Director, Division of
and Compliance Officers Commissioner; SEC Kamala Harris Enforcement; SEC
Catherine L. Bromilow Association Michelle Edkins Attorney General; State of
PwC Partner; PwC Center for Global Head of Corporate Gary Gensler California David H. Kistenbroker
Corporate Governance Julie Hembrock Daum Governance and Responsible Chairman; Commodity Managing Partner; Dechert,
Co-Head, North American Investment; BlackRock Futures Trading Robert M. Hayward Chicago Office
Beth Brooke Board and CEO Practice;
W. Neil Eggleston Commission Partner; Kirkland & Ellis
Global Vice Chair, Public Spencer Stuart Arthur Kohn
Partner; Kirkland & Ellis Samuel Glasscock , III Paul G. Hodgson
Policy; Ernst & Young Partner; Cleary Gottlieb Steen
Steven Davidoff David Einhorn Vice Chancellor; Delaware Chief Research Analyst; GMI & Hamilton
Stephen L. Brown DealBook Professor, The New
Co-Founder, President;
Court of Chancery
Director of Corporate York Times Professor, Moritz Eric H. Holder Jannice L. Koors
Greenlight Capital Arthur F. Golden Attorney General; United
Governance; TIAA-CREF College of Law, Ohio State Managing Director; Pearl Meyer
University Partner; Davis Polk & States of America & Partners
Martha Carter Jay Eisenhofer Wardwell
Managing Director, Co- Randy Holland
Global Head of Research; ISS George L. Davis, Jr. Robert J. Kueppers
Founder; Grant & Eisenhofer Amy L. Goodman Justice; Delaware Supreme
Executive Committee Member, Deputy CEO; Deloitte
Emily Chasan Co-Leader of Global Board Charles M. Elson Partner; Gibson, Dunn Court
Senior Editor, CFO Journal; Practice; Egon Zehnder & Crutcher David F. Larcker, Professor
Edgar S. Woolard, Jr., Chair Carl C. Icahn
Wall Street Journal International Co-director, Arthur and
University of Delaware; Michael D. Greenberg Chairman; Icahn Enterprises Toni Rembe Rock Center for
Stephen Chipman Weinberg Center
James W. DeLoach Director, RAND Center Corporate Governance;
CEO, Grant Thornton Managing Director; Protiviti for Corporate Ethics and Darrell Issa Stanford Law School
John M. Engler Governance Chairman, 112th Congress
David Chun President; Business
Mike DeWine Oversight Committee; United J. Travis Laster
CEO, Founder; Equilar Roundtable Holly J. Gregory States Congress
Attorney General; State of Ohio Vice Chancellor; Delaware
Partner; Weil, Gotshal Court of Chancery
James M. Citrin Phyllis Deiso Roger W. Ferguson, Jr. & Manges Jack Jacobs
President, CEO; TIAA-CREF
Co-Head; North American National SEC Practice Leader; Justice; Delaware Supreme Richard S. Levick
Board and CEO Practice McGladrey Robin A. Ferracone Robert Greifeld Court President and CEO; LEVICK
Spencer Stuart President, CEO; Nasdaq
Executive Chair, Founder; Tim Johnson
Thomas J. Donohue OMX Craig Lewis
Mary Ann Cloyd Farient Advisors Chairman, Committee on
President and CEO; U.S. Director, Division of Risk,
Leader; PwC Center for Chamber of Commerce Laurence D. Fink Joseph Grundfest Banking, Housing and Urban Strategy and Financial
Corporate Governance Senior Faculty, Arthur and Affairs; Senate Innovation and Chief
Chairman, CEO; BlackRock
James Doty Toni Rembe Rock Center for Economist; SEC
John Coffee Chairman; Public Company Cynthia Fornelli Corporate Governance;
Adolf A. Berle Professor of Accounting Oversight Board Executive Director; Center for Stanford Law School James P Liddy
.
Law; Columbia Law School U.S. Vice Chair, Audit and
Audit Quzality
Americas Regional Head of
Audit; KPMG
08
8 09

6. Weekly
Daniel S. Loeb Alan Murray Punit Renjen Timothy Smith Dennis T. Whalen Brian V. Breheny
Founder, CEO; Third Point Deputy Managing Editor, Chairman of the Board; Senior Vice President Partner in Charge and Partner; Skadden, Arps, Slate,
LLC Executive Editor of Online; Deloitte and Director of ESG Executive Director; KPMG's Meagher & Flom
Wall Street Journal Shareowner Engagement; Audit Committee Institute
David Louie Henry duPont Ridgely Walden Asset Management David Green
Attorney General; State David A. Nadler Justice; Delaware Supreme Ralph Whitworth Director; U.K. Serious Fraud
of Hawaii Vice Chairman; Marsh & Court Jeffrey Sonnenfeld Founder, Principal, Investment Office
McLennan Companies Senior Associate Dean for Committee Member; Relational
Joann S. Lublin Eileen Rominger Executive Programs; Investors Keir D. Gumbs
Management News Editor; Charles M. Nathan Director, Division of Yale School of Management Partner; Covington & Burling
Wall Street Journal Of Counsel; Latham & Watkins Investment Management; Christianna Wood
SEC Larry Sonsini Chairman; International Darrin Hartzler
Jon Lukomnik Duncan Niederauer Chairman;Wilson Sonsini Corporate Governance Manager, International
Executive Director; IRRC CEO, director; NYSE Euronext Marc S. Rosenberg Goodrich & Rosati Network Finance Corporation
Institute Partner and Co-Chair
John Noble Corporate Governance and Andrew Ross Sorkin Ann Yerger Christopher Hohn
Stephen P Mader
. Vice Chancellor; Delaware Board Advisory Group; Chief Mergers & Executive Director; Council of Founder; Children's
Vice Chairman, Managing Court of Chancery Cravath, Swaine & Moore Acquisitions Reporter, Institutional Investors (CII) Investment Fund
Director, Board Services 'Dealbook' Editor and
Practice; Korn/Ferry Justus O'Brien Mary L. Schapiro Columnist; The New York Benjamin Lawsky
International Head of Board Practice; Egon Chairman; SEC Times Superintendent; New York
Zehnder International NACD Directorship Department of Financial
Robert McCormick, JD Eric Schneiderman Myron Steele Services
Chief Policy Officer; Glass John F. Olson Attorney General; State of Chief Justice; Delaware
100: People to Watch
Lewis & Co. Partner; Gibson, Dunn & New York Supreme Court James McRitchie
Crutcher Mark Beasley Publisher; CorpGov.net
William G. McGuinness Andrew E. Shapiro Leo E. Strine, Jr. Deloitte Professor of
Chair of The Litigation Jonathan Oviatt Founder, President, Chancellor; Delaware Enterprise Risk Management; Henry Mintzberg
Department; Fried Frank Chief Legal Officer; Mayo Clinic Portfolio Manager; Court of Chancery North Carolina State Professor; McGill University
Harris Shriver & Jacobson Lawndale Capital University, ERM Initiative
Troy Paredes Management David Swinford Ellen Moskowitz
Patrick S. McGurn Commissioner; SEC President and CEO; Pearl Paul A. Beswick Partner; Brunswick Group
Executive Vice President, Anne Sheehan Meyer & Partners Acting Chief Accountant; SEC
Special Counsel; ISS Donald F. Parsons Director Corporate Ann C. Mule
Vice Chancellor, Delaware Governance; CalSTRS Anton Valukas Errol L. Biggs Associate Director, Weinberg
Keith Meyer Court of Chancery Chairman; Jenner & Block Instructor, Director of Center for Corporate
Vice Chairman, Head Richard Shelby Graduate Programs in Governance; University of
of Global CEO & Board George B. Paulin Ranking Member, Senate Bruce Vanyo Health Administration, Delaware
Practice; CTPartners Chairman, CEO; Frederic Committee on Banking, Partner; Katten Director of Center for Health
W. Cook Housing and Urban Affairs Administration; University of Jeffrey Rudman
Nell Minow Congress John B. Veihmeyer Colorado Partner; WilmerHale
Director; GMI Nelson Peltz Chairman, CEO; KPMG-
Founder and CEO; Trian Fund Anne Simpson Americas Henry L. Boerner Jason Schloetzer
Scott L. Mitchell Management Senior Portfolio Manager Chairman, CEO; Governance Professor; Georgetown
Chairman; OCEG and Director for Corporate Mike Wallace & Accountability Institute University
Becky Quick Governance; CalPERS Director, Global Reporting
G. Mason Morfit Co-anchor, Squawk Box; CNBC Initiative’s (GRI) Focal Bradley J. Bondi Andrew J. Sherman
Partner; ValueAct Capital Michael W. Smith Point USA; Global Partner; Cadwalader, Partner; Jones Day
Jed Rakoff President of Executive Reporting Initiative Wickersham & Taft
Jeff Morgan Chief Judge; US District Court Liability; Chartis Adair Turner
CEO; National Investor Southern District of New York Elisse Walters Neil S. Braun Chairman; Financial Services
Relations Institute (NIRI) Commissioner; SEC Dean; Pace University Lubin Authority, London L
School of Business
Charles Weinstein
CEO; EisnerAmper
10 11

7. Social Media
T
he last 10 years have seen extraor- of a survey that examined how 180 top CEOs,
dinary evolutions in the respon- senior executives, and corporate directors ap-
& The Boardroom:
sibilities boards of directors must proach the opportunities and risks associated
assume. From Sarbanes-Oxley to with social media’s meteoric rise. The findings
Dodd-Frank, directors have been are startling:
subjected to new liabilities and new mandates
Critical Questions Directors Need To Ask
Ninety percent of respondents report a basic
for elevated levels of transparency and ac-
understanding that what is said on social me-
countability. But during that time, another
dia can have a major impact on their organiza-
development has had perhaps an even greater
tion; but only 32 percent of their companies
impact on directors’ day-to-day duties than
monitor social media to identify risks and only
any strictures from Washington, D.C. It’s the
14 percent utilize social media sentiment to
social media revolution—and no public com-
Richard S. Levick, Esq. measure corporate performance.
pany, large or small, has eluded its impact.
Originally Published on Fastcompany.com
Only 24 percent of senior managers and 8
Social media are no longer novel stakeholder
percent of directors request regular reports
and consumer outreach tools; they are the
on the company’s social media engagement ef-
new normal in the modern business opera-
forts and stakeholders’ social media sentiment.
tions environment. The brand-building op-
About half of the respondents do not collect
portunities they present are nearly limitless.
this information at all.
The risks they introduce are just as expansive.
They affect everything from reputations to Even here in 2012, only 59 percent of com-
value propositions. And to many corporate panies surveyed use social media to interact
leaders, they remain somewhat of a mystery. with customers. Only 49 percent use them to
advertise. Only 35 percent use them for cus-
Social networks are the venues where pur-
tomer research purposes. And only 30 percent
chasing decisions are increasingly made,
use social media to research competitors, new
investment opportunities are increasingly
products and services, or communicate with
weighed, and corporate adversaries—such as
employees and other stakeholders.
social activists and the plaintiffs’ bar—increas-
ingly gain public support for their agendas. At the same time, 65 percent of respondents
But despite that fact, the latest data indicate use social media for personal purposes and
a significant divide between director engage- 63 percent utilize them for business purposes.
ment on social media issues and social media’s Of that forward-thinking group, 80 percent
impact on their companies. maintain a LinkedIn account and 68 percent
are active on Facebook. At first glance, these
Last month, Stanford University’s Rock Center
numbers may seem encouraging; but, in real-
for Corporate Governance released the results
13

8. Weekly
lways smart to look at what others in your need to know where the boundaries of accept-
market are doing to leverage social media. able commentary may lie; but the risks are so
Only 24 percent of senior managers and 8 percent of With the analytical tools available today, far outweighed by the opportunities that most
companies can access a wealth of informa- boards are well-advised to encourage senior
directors request regular reports on the company’s tion about the tactics their audiences respond leadership to build consumer and employee
social media engagement efforts and stakeholders’ to, what drives them to take desired actions, loyalty via social media outreach.”
social media sentiment. About half of the and the strategies that establish the strongest
4. What are our policies on employee use of so-
connections both online and off. At the end
respondents do not collect this information at all. of the day, both you and your competitors are
cial media? Are we appropriately training
employees on in this critical brand protection
attempting to reach the same people.
and promotion area? How often do we update
From that perspective, your competitors the policies to ensure they are keeping up
are providing you added insight with every with technology?
ity, they make the above cited statistics all the 1. How do we use social media to engage
Facebook post they publish, every tweet
more alarming because familiarity with social with customers, open new markets & recruit Bromilow places a great deal of emphasis on
they transmit, and every piece of video they
media has not translated into C-Suite or board- the top talent? the importance of a carefully crafted social
upload to YouTube or another video platform.
room action. media use policy. “A number of directors I’ve
“Social media engagement has evolved to Unfortunately, data from the PwC 2012 An-
spoken to are concerned about employee social
The good news is that there are a number of the point it is absolutely essential in today’s nual Corporate Directors Survey show that
media use. There are productivity concerns, to
questions directors can begin asking today marketplace,” says Bromilow. “A few years this point is lost on a number of board mem-
be sure, but it goes even further than that. How
that will immediately help them, and their or- ago, social media was something companies bers—77 percent of respondents answered
can a company protect against accidental leaks
ganizations, get up to speed. To formulate a list engaged in to provide themselves a com- “not at all,” “not sufficiently,” or “don’t know”
of confidential information? How can it prevent
of the 10 most critical, I enlisted the assistance petitive advantage. Now, it’s something that when asked how their companies monitor
employees from sending inadvertent signals
of three thought leaders who understand the they have to do to keep from falling behind. competitors’ social media activity.”
by “liking” a certain article or “re-tweeting”
crossroads of corporate directorship and so- Whether you’re looking to promote products,
3. How are our executives utilizing social controversial commentary? With the advent of
cial media as well as any in the business world recruit talent, or introduce yourself to a new
media? Who are they communicating with? location-based social media platforms, how can
today. Catherine Bromilow, a partner in PwC’s market, your audience is on social media—so
What are we allowing them to say? a company ensure that potentially damaging
Center for Board Governance in the United your company needs to be as well.”
conclusions aren’t drawn simply because an
States; Chris Wood, a Senior Manager in PwC “Executives that engage with customers,
2. How are our competitors utilizing social executive is in a certain city? Companies need
Canada’s Audit Committee Connect; and Neil employees, investors, and other stakeholders
media to achieve the goals outlined above? formal policies to ensure that every employee,
Manji, a partner and leader in PwC Canada’s via social media provide themselves an air of
What can we learn from their efforts? at every level of the organization, understands
Audit Committee Connect, shared insights and accessibility that simply doesn’t come across
and follows the rules of the road.
experiences that illuminate the opportunities Wood argues that competitors’ social media with other, one-way forms of communica-
and risks inherent in social media engagement activity provides a great deal of insight into tion,” says Manji. “Social media are conver- “As important as this point is, the PwC 2012 An-
and provide the foundation by which directors what works and what doesn’t with respect sational venues that empower the audience nual Corporate Directors Survey again shows
can start asking the questions that set a strong to diverse industries that have varying audi- because it really feels it is being listened to. that most board members are not fully engaged
strategic course. ences and different outreach goals. “It’s a Some topics may be off-limits, and executives on the issue--69 percent of respondents an-
14 15

9. Weekly
swered “not at all,” “not sufficiently,” or “don’t story could go “viral” before the company even
know” when asked how their companies em- knows it’s out there.” Bromilow adds that social
ploy social media use training and policies.” media monitoring isn’t just about reputational
risk management; but brand building as well.
5. Does our social media outreach comply
“When a consumer does put something out
with existing and potential regulations? What
there that could be damaging to the brand,
are the implications in terms of Regulation
companies need to remember that it is only the
Fair Disclosure?
start of a conversation. If they respond quickly
“We haven’t seen much yet from regulators and act fast to resolve the problem, they of-
such as the SEC, FTC, or FDA in terms of con- ten win points for their care and attention to
crete guidance as to what is constitutes ap- the matter—and they do so in a public venue
propriate social media usage in the investor where others can see just how seriously they
relations realm or in industries where market- take customer service.
ing and communications are tightly controlled,
Even with all the ways that social media can
such as pharmaceuticals,” says Bromilow.
make or break corporate reputations, the PwC
“With so many concerns related to Regulation
2012 Annual Corporate Directors Survey once
FD and other questions of compliance, boards
again shows a disconnect on the issue, with 69
need to be reassured that 1) company social
percent of board members answering “not at
media engagement comports with all exist-
all,” “not sufficiently,” or “don’t know” when lems in the bud before any of these adver- 8. What are we doing to build a burgeoning com-
ing regulations, and 2) that they know how to
asked how their companies monitor social me- sarial parties can leverage them to damage the munity of support in the social media space—
respond should an external connection such as
dia for adverse publicity.” company in the courtroom, the Court of Public one that is large enough to enable direct stake-
a Facebook fan or Twitter follower post com-
Opinion, or in terms of customer loyalty.” holder communications that can circumvent the
mentary that could be problematic.” 7. Are we actively monitoring plaintiffs’, activists’,
traditional media filter?
and regulators’ social media activity for clues as It’s important to note as well that the plaintiffs’
6. Are we actively monitoring popular social bar and even regulators engage in the same
to where our next crisis might arise? To Wood, amassing multitudes of Facebook
media platforms for negative publicity about type activity—and provide the level of insight fans, Twitter followers, or YouTube subscrib-
the company? Manji sees social media monitoring not just
into their plans. When plaintiffs’ attorneys ers is about more than a mere demonstration
as a tool that allows for rapid response should
“It used to be that companies really only had write blog posts that help them lay the ground- of brand strength. “When a company draws
reputational problems arise, but as an early
to worry about a damaging headline in the work for their next class action or regulators stakeholders to its key social media properties,
warning system that can alert the company
daily paper or a negative report on the nightly take to social media to discuss enforcement what it is really doing is creating a conduit by
to problematic issues before they evolve into
news,” says Wood. “Now, they have to be on the agendas, those companies that are listening which the company can directly communicate
something worse. “You’ve got activists using
lookout for individual stakeholders who may understand—and can plan for—what’s with its customers, shareholders, employees,
social media to build groundswells of support
comment about a negative experience on social coming next. and others. In this context, social media are
around issues of corporate social responsibility.
media platforms, because the inter-connected avenues that enable companies to bypass the
That activity represents actionable intelligence
nature of social networking means that the traditional media filter and transmit messages
that companies can use to nip potential prob-
16 17

10. Weekly
precisely as they are intended. That’s an asset
that is particularly valuable in crisis or in situ-
ations where misinformation is permeating the
“race to be found.” With so much clutter on-
line, today’s companies are constantly looking
for ways to ensure that their online properties
Michael Volkov on Whistleblowers
marketplace; but it is also one that can’t be put rank high on the most popular search engines.
into action unless the company has used peace- As Google, Bing, Yahoo, and others evolve their
time to build its audience.” algorithms to include social media content to
greater and greater extents, the value of smart
9. What is our strategy for reaching out to the
social media strategy rises exponentially—as
most influential social media voices covering our
it not only strengths corporate reputations,
industry? Are we treating them with the same
but increases the chances that those enhanced
respect we would show 60 Minutes or the New
brands will be noticed amid a constant and
York Times?
highly competitive contest for online attention.
“Just like in the traditional media, social
As the latest data indicate, there are still a
media are venues where some voices matter
number of directors that are concerned about
more than others,” says Manji. “That means
the risks associated with social media engage-
companies need to know who controls percep-
ment today. In some cases, that’s a prudent
tions related to their industries and do what is
perspective. But as Wood reminds us, “The
necessary to build productive working relation-
greatest risk of all is failing to capitalize on all
ships with those influential voices. It might be
of the brand-building opportunities that social
a blogger with 10,000 daily readers. It might
media present. These online venues are where
be pundit with 20,000 Twitter followers. But
consumers, investors, regulators, and the full
no matter the person or the venues he or she
gamut of corporate stakeholders make deci-
might populate, it is incumbent on companies Michael Volkov, a shareholder in LeClairRyan, discusses the tough whistleblower laws that
sions. To be absent from the conversations that
to understand that the most powerful commen- were passed as part of the Dodd-Frank financial reform package. Whistleblowers that meet
impact your industry is a hazard simply too
tators on social media have the same reach, certain criteria are now entitled to as much as 30 percent of all recoveries that result from their
dangerous to invite.” L
and speak with the same authority, as most cooperation with the government. That’s a powerful incentive—and it dictates an urgent need for
traditional media outlets today.” Richard S. Levick, Esq., President and CEO of LEVICK, repre-
companies to ensure that employees report problems internally, before turning to regulators.
sents countries and companies in the highest-stakes global
10. How are we integrating social media strategy communications matters—from the Wall Street crisis and the
with our Search Engine Optimization (SEO) and Gulf oil spill to Guantanamo Bay and the Catholic Church.
Marketing (SEM) efforts? Are we taking steps
to ensure that these critical initiatives support
each other on an ongoing basis?
It is important to remember that social media
engagement is now a key element in the online
18

11. Boardroom Intelligence
The Top
what's next?
Issues The
transition from the age of Sarbanes-Oxley to the age of Dodd-Frank has ushered
in yet another massive expansion of director roles and responsibilities. Under the
new regime, directors need to be engaged in the full gamut of issues that impact
corporate reputation and, ultimately, shareholder value. At the same time, the host of new regulations
of 2013 And
born of 2008’s financial crisis is just now dramatically escalating personal liability and introducing new
exposures that boards must be prepared to successfully protect.
Beyond
To help directors fulfill their fiduciary and reputational obligations, we spoke with eight leading attorneys
on issues from M&A and IPOs to data loss and theft. These feature interviews delve into the marquee
challenges of 2013 and beyond—providing not only insight into how they can best be solved, but tips on
how companies and directors can best communicate their steadfast commitment to compliance, value,
and responsible oversight. To that end, we have appended our own suggestions for best communications
practices to each interview.

12. Weekly
Activist Investors: Schulte Roth Marc Weingarten: The most common mistake Bankruptcy & Restructuring: see that trend continuing. Filing with an exit
& Zabel’s Marc Weingarten is for a board to refuse to give the activist a Kaye Scholer’s Tyler Nurnberg plan already negotiated enables the company
hearing. It’s fine to evaluate your defenses, but to shorten the time it spends in bankruptcy,
Marc Weingarten, a partner in Tyler Nurnberg is a Partner
stiff-arming or fighting the activist from the maintain control over the process and reduce
the New York office of Schulte in Kaye Scholer’s Bankruptcy
start and refusing to engage is generally not restructuring costs.
Roth & Zabel, is chair of the & Restructuring Group and
well-received by the other stockholders.
Managing Partner of the firm’s Another piece of practical advice is that the
Business Transactions Group
Another common mistake is to attack the ac- Chicago office. board needs to stay focused on the business
and a member of the Invest-
tivist as merely a short-term opportunist look- plan during the bankruptcy. While external
ment Management Group.
ing for a quick pop in the stock price at the How can directors best serve a company factors may have contributed to the need to file,
What are the reasons behind increased inci- expense of long-term value creation. Share- during bankruptcy or restructuring? larger underlying problems with the business
dents of shareholder activism? holders will be happy to take any gains they model or the balance sheet likely drove the deci-
Tyler Nurnberg: A board will want practical
can get, even if short-term. As such, a com- sion. Those issues need to be resolved for the
Marc Weingarten: The principal reason is the outside advice early in the process on how to
pany under attack needs to put itself in the company to emerge as a viable business and,
increased willingness of major sharehold- fulfill its fiduciary duties, and how those duties
mindset of its shareholders and come up with while bankruptcy can be a powerful tool, it is
ers, both institutional investors and pension may change when the company is insolvent or
responses that explain prior performance and not a panacea for the problems that led the com-
funds, to support activists. Historically, they approaches insolvency. The board will want to
realistically support a more promising future. pany to file bankruptcy in the first place.
simply “voted with their feet” and sold out. maintain a proper supervisory role and not ex-
But they’ve become so big that now they really ercise undue influence over day-to-day opera-
own the market, and rather than selling and tions. Prior to filing bankruptcy, the board and
having to look to reinvest somewhere else, its advisors should also assess the adequacy
they join the activists in pressing for improve- BEST COMMUNICATIONS of the D&O insurance policies. Also, directors BEST COMMUNICATIONS
ments.
PRACTICES: PRACTICES:
should be alerted to the discrete areas where
In the age of transparency, boards need they could potentially be liable personally for
When markets are down, investors are unhap- 1. to direct their Investor Relations and the bankrupt company’s debts. 1.
Boards must ensure that exit strategies
py and will turn to activists for help. Several and future growth are the hallmarks
communications team to focus on more
of communications during bankruptcy,
of the most successful financial activists now than just the analysts. The democratization How can a company best position itself for beginning with the initial announcement.
have several billion dollars in assets, and can of the market is underway, investors are
post-bankruptcy operations? When companies control the “new day”
newly empowered, and companies need
target even the largest-cap companies. Given narrative, internally and externally, they
to think differently about how they engage Tyler Nurnberg: The company should deter-
activists’ success rate in recent years, many keep stakeholders focused on future
potential activist threats.
mine its exit strategy before it files bankruptcy success, not past mistakes.
more hedge funds that are not typically “activ-
Don’t let the shuttering of MoxyVote fool wherever possible, and view the process as an
ist” are now trying out the strategy on their 2. you; the activists are online and they use 2.
Boards must understand the power of
opportunity to fix both financial and opera- social and digital media to disclose.
poor-performing positions. the Web to drum up support. Boards need
Teams need to be ready to respond
to direct their teams to better understand tional problems. Get as much negotiated in
publically from the very moment a
What are some of the most common mis- how WikiInvest, Seeking Alpha, and other advance of filing as possible. There has been company begins to seriously consider
takes that boards of directors make when social and digital media have an impact
an increase in the number of “prepackaged” or restructuring—in other words, go on the
on their value.
faced with pressure from activist investors? “pre-negotiated” cases in recent years and we offense so you don’t have to play defense.
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