This week's corporate news roundup includes the holding by the SEC's fine against SandRidge Energy for its retaliatory actions against a whistleblower and its illegal anti-whistleblower employee separation agreements, Glass Lewis' updates to its annual proxy paper guidelines, and the new revenue recognition accounting standards applicable to public entities beginning December 15, 2016.

GLASS LEWIS UPDATES ITS ANNUAL PROXY PAPER GUIDELINES

Glass Lewis recently released its policy guidelines for proxy access and updated its policies with respect to director over-boarding, governance following an IPO or spin-off, and board evaluation and refreshment. The corporate governance service firm noted the increasing time commitments associated with being a director of a publicly traded company and generally recommends that shareholders vote against directors who are executive officers of any public company and who also serve as directors on more than two public company boards or any directors who serve on more than five public company boards. While the firm generally refrains from making recommendations based on governance standards for a one-year period following an IPO or spin-off, Glass Lewis scrutinizes companies that have recently gone public that have governance documents that limit shareholder rights (e.g., supermajority voting requirements to amend governing documents, poison pills, classified boards, and limitations on ability of shareholders to remove directors without cause). Finally, Glass Lewis recommends routine director evaluations and periodic board turnover to meet the changing needs of the company, as opposed to relying solely on age or tenure limits to change the composition of the board. For more details, see http://www.glasslewis.com/wp-content/uploads/2016/11/Guidelines_US.pdf

NEW REVENUE RECOGNITION ACCOUNTING STANDARDS (FASB TOPIC 606) FOR PUBLIC ENTITIES BEGINNING DECEMBER 15, 2016

Changes to revenue recognitions principles proposed by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) announced in 2014 are effective with respect to annual and interim reporting periods of public entities beginning on December 15, 2016. The new revenue recognition standards are designed to provide more clarity and consistency with respect to the source and nature of revenues reported by companies. For example, the new standards apply consistent principles for recognizing revenue regardless of the industry or geography of the reporting company, a single model for the treatment of variable consideration (e.g., rebates, discounts, bonuses, rights of return) and a cohesive set of disclosure requirements to provide users of financial statements additional information about the company's customer contracts. In addition, companies must identity each of the goods or services promised to the customer and treat each good or service as a distinct and separate performance obligation, only recognizing revenue when each performance obligation is satisfied and allocating the transaction price of each performance obligation on a relative standalone basis of the underlying good or services (except in the instances where a contingent discount or variable consideration applies). For more details, see http://www.aicpa.org/interestareas/frc/accountingfinancialreporting/revenuerecognition/downloadabledocuments/2014-09_liplan.pdf and http://www.fasb.org/jsp/FASB/Page/BridgePage&cid=1351027207987#section_1

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.