Corporations Work Fast to Understand Scope and Impact of New Finance Reform Legislation in the United States

NEW YORK, July 27 /PRNewswire/ -- In response to the financial crisis and increased shareholder activism, the nation's laws concerning corporate governance have changed in fundamental ways. These new rules give shareholders greater influence than ever before and will require corporations to enhance communication with shareholders and the broader public. Ketchum, along with its recently announced Corporate Governance Advisory Board, held a meeting last week to review the key areas of the legislation and discuss its reputational challenges. (View the archived version through this link: "Governance Matters: A Briefing on New Corporate Governance Regulations.")

"With new legislation in effect and shareholders showing a heightened level of interest in governance topics, companies will need to communicate more effectively on a wide range of governance-related matters," said Rob Flaherty, Ketchum president and managing director of Ketchum's Global Corporate Practice. "Those that embrace an integrated approach across corporate functions will be better positioned to manage their reputations and engage the public in dialogue on these critical issues."

According to the Ketchum Corporate Governance Advisory Board, among the areas in which clients need to enhance communications are conveying the rationale for the structure and composition of the board of directors; making the case for executive compensation; articulating the company's sustainability record; and demonstrating the company's leadership in governance matters. Furthermore, the new legislation grants the U.S. Securities & Exchange Commission broad power to set rules regarding proxy access, which would require companies to include director candidates nominated by shareholders in the company's proxy materials under certain circumstances – an issue which corporations will have to monitor closely.

"It's anything but business as usual these days," said Kurt Stocker, member of the SEC Investor Advisory Board and the Financial Industry Regulation Authority, and chairman of the New York Stock Exchange Regulation and chairman of the NYSE Individual Investors Advisory Committee. "The new laws and regulations create increased transparency and give shareholders a greater say in how companies are governed. As a result, companies will need to step up communications and engage with shareholders and other stakeholders beyond the proxy materials."   

Last month Ketchum announced its Corporate Governance Advisory Board. This diverse group of experienced industry experts comprises leaders in securities law, shareholder activism, governance consulting and shareholder and investor relations. The advisory board discusses these issues with Ketchum, enhancing the ability of Ketchum's counselors to advise clients. Board members are also available to work with Ketchum's corporate clients to navigate the new governance landscape.

About Ketchum

A communications innovator, Ketchum ranks among the largest global communications consultancies and leads the industry in the U.K. and continental Europe as Ketchum Pleon. With five global practices – Brand Marketing, Corporate, Healthcare, Food & Nutrition, and Technology – and specialty capabilities that include Access Communications (high- and consumer-tech PR), Concentric Communications (experiential marketing, events and meetings), MMG (clinical trial recruitment), Ketchum Global Research Network, Ketchum Sports & Entertainment, and Ketchum Pleon Change (change management and workplace communications), Ketchum leverages its marketing and corporate communication expertise to build brands and reputations for clients. For more information on Ketchum, a unit of Omnicom Group Inc. (NYSE: OMC), visit www.ketchum.com.  

SOURCE Ketchum