Terry Schpok Talks Corporate Governance with Metropolitan Corporate Counsel
For its April issue, The Metropolitan Corporate Counsel interviewed Akin Gump corporate partner Terry Schpok and published the results as “Early Stage Companies: Good Corporate Governance Starts From Day One.”
In this interview, Schpok discussed his practice and corporate governance. Among the topics he covered:
- Good governance in early stage companies: “Early stage companies often have a challenge making the transition from a founder- or entrepreneur-controlled environment to the adoption of appropriate governance practices because the early stage company’s primary focus is on developing its business….[I]t is very important for boards to have appropriate corporate governance policies in place and actively followed in order to mitigate challenges by shareholder activists or other parties that may be critical of a board’s actions.”
- The importance of specialized skills on a board: “Specialized skills can be particularly useful to companies that may not have such skills in-house. For example, I once represented a board committee reviewing financial statements of a third party for a potential transaction. The lead independent director was dean of a business school and author of a text on analyzing financial statements. His specialized skills were very useful to the board.”
- Boards and risk management: “Considerable weight should be placed on risk management procedures and ensuring the integrity of the company. Too often, boards are not prepared in advance to address an unforeseen crisis situation and have ‘deer in the headlights’ syndrome when faced with an impending crisis.”
- Separation of powers between a board chair and the CEO: “The issue is the ability of a company to split the functions of the chair and CEO without creating confusion about leadership roles in the company or inferring the board has a lack of confidence in the CEO. An independent lead director can be an alternative to having a separate chair and CEO. Oftentimes, an independent chair is a person with prior service as a director of the company who would be familiar with the company.”
To read the full interview, please click here.