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Proxy advisor InGovern Research Services is calling on minority shareholders of Tata listed group companies to vote against a proposal to remove Cyrus Mistry from their boards, saying they have not provided "any compelling reasons." Six of the seven Tata listed group companies where Mistry serves as a director have called EGMs between Dec. 13 and Dec. 26 following a proposal from the promoter shareholder, Tata Sons. Mistry was removed as chairman of the board of Tata Sons on Oct. 24 but continues to chair the boards of other Tata group companies. "Tata Sons has not articulated any new plans or visions for the operating companies than what the boards under Mistry had adopted," says InGovern. "His presence as director ... of listed companies should be a balance on the boards and representation of the minority shareholder. In many operating companies, Mistry continues to have the confidence of the independent directors." Mistry retains beneficial shareholding of 3% to 13% in the listed companies through the 18.4% minority shareholding in Tata Sons.

Trian Fund Management has purchased 3.7 million shares of Wendy's Co. (WEN), raising its stake to more than 23% of the outstanding stock. Trian previously owned roughly 15% of the company, according to FactSet. In June 2015, Wendy's repurchased about $211 million of its stock from board members Nelson Peltz, Peter May, and Edward Garden—who control Trian—along with investment funds managed by Trian. Shares of Wendy's jumped nearly 4% to $13.49 in midday trading Wednesday, their highest point in almost a decade.

Ancora Advisors LLC penned a letter to the board of Edgewater (EDGW) on Dec. 5 calling for the immediate replacement of four existing directors with Ancora representatives. The investor said it believes "at this point a proxy contest is a foregone conclusion." Ancora also urged the company to search internally for a replacement for Edgewater CEO Shirley Singleton.

Sources told CNBC on Dec. 7 that Pandora (P) is looking at potential acquirers beyond SiriusXM (SIRI), which could give the company leverage if SiriusXM pursues serious negotiations about a potential deal. It was recently reported by CNBC that the music streaming service was open to selling itself and was willing to engage with one-time suitor SiriusXM, but a separate Reuters report indicated last week that Pandora is making no new effort to sell itself and instead is focused on executing its strategy and its operating model. Neither Pandora nor Liberty Media (LMCA), Sirius' majority owner, has commented on the reports.

Tata Sons' interim Chairman Ratan Tata wrote a letter on Wednesday seeking shareholder support to remove Cyrus Mistry from the board of Tata group companies.  Mistry was ousted as chairman of holding firm Tata Sons in October, but he is still on the board of some group companies.  Patriarch Ratan Tata is back in charge temporarily, and a public power spat has since developed between the two sides.  The letter comes days ahead of meetings at six group companies, including Tata Motors (TAMO) and Tata Consultancy Services (TCS), when shareholders are expected to vote on removing Mistry from their boards.  In the letter, Ratan Tata said Mistry was removed as chairman because the board of Tata Sons had lost faith in him and his ability to lead, and that Mistry's continued presence was a "serious disruptive influence."  Cyrus Mistry's office, in a statement, denounced the letter as a misrepresentation, and also refuted Ratan Tata's claims of remediation attempts.

Chipotle Mexican Grill Inc. (CMG) founder and co-CEO Steve Ells said on Tuesday the company will soon reveal a new slate of directors. He indicated that Chipotle is taking a close look at current board members and, in particular, is evaluating long director tenures and considering new candidates well-versed in areas such as marketing, crisis management, and corporate governance. The announcement comes amid pressure from shareholders to shake up the board and improve sales following last year's food safety debacles. Billionaire investor William Ackman, who disclosed a nearly 10% stake in the burrito chain three months ago, is seeking several board seats with the goal of boosting food safety and marketing, sources have said. Ackman and Chipotle reportedly signed an agreement last month to engage in confidential discussions, a sign he may pursue change at the company without a costly and protracted proxy contest. Chipotle's board has also been criticized by pension funds and other shareholders for being insular, entrenched, and too generous with pay. Investors Amalgamated Bank and CtW in November called for shareholders to name an independent chairman to replace Ells on the board. Shares in Chipotle dipped 7.8% on Tuesday when Ells expressed uncertainty about meeting full-year targets. Executives blamed poor customer service and underperforming restaurants for a unexpectedly sluggish sales recovery.

Dethroned Tata Sons chairman Cyrus Mistry on Monday called for the government to investigate the governance structure at Tata Trusts and penalize those who violated it. In a 14-page representation to the shareholders of six Tata Group firms ahead of their extraordinary general meetings (EGMs) to determine his fate, Mistry argued the governance charter across the Tata Group needs to be fixed. "The Tata Group is no one's personal fiefdom: it does not belong to any individual, not to the trustees of Tata Trusts, not to the Tata Sons directors, and not to the directors of the operating firms. It belongs to all the stakeholders, including every one of you," he said. "Without governance reform, without checks and balances and without accountability for conduct of the trustees, serious value erosion for you as members of your company is inexorable." Mistry also asked Tata shareholders not to be influenced by Tata Sons' decision to fire him as chairman of the conglomerate on Oct. 24. "I have made this representation with a sense of pride in what I have done in the past four years, putting out of my mind the unfairness I have recently experienced at the Tata Sons board," he declared. Tata Sons has already removed Mistry as chairman of Tata Consultancy Services (TCS) and Tata Global Beverages Ltd. EGMs have been called for December to oust Mistry as director at these firms as well as at Tata Motors and Indian Hotels Co Ltd.

Sandell Asset Management Corp. announced Tuesday it is no longer pursuing a shareholder vote to push Bob Evans Farms Inc. (BOBE) to split its operations.  The investor, which had been pressuring Bob Evans to spin off its packaged-food business, said it was encouraged by Bob Evans' disclosure on Monday that it was working with J.P. Morgan to review options.  Though the company did not offer a specific time frame for that review or reveal any plans, Sandell said that the disclosure of financial advisers "may now serve as a point of contact for ... potential partners."  "As a result, Sandell does not at this time intend to pursue a consent solicitation seeking shareholder approval," the firm said in a statement Tuesday morning.  It added that it would be open to many alternatives to boost shareholder value, not just a separation.  Sandell snagged a third of the company's board seats in a proxy fight in 2014.  The investor, which owns roughly 6.4% of Bob Evans' shares, has previously said the packaged-food business could be worth more than $1 billion—more than the combined company's current valuation.

Hedge fund manager Mick McGuire appealed directly to Buffalo Wild Wings' (BWLD) franchise owners in a letter on Tuesday, arguing they could have better access to innovations and grow more if his ideas were applied. In the letter, McGuire invited the company's franchisees to stay updated on the dialogue between his hedge fund and management through a new public website: www.WinningAtWildWings.com. Turning more of the company's restaurants over to franchisees is an important part of McGuire's plan for change at Buffalo Wild Wings and key to his prediction that the company's share price could triple if a number of changes are made. The share price, which closed at $170.85 on Monday, has increased 15% since McGuire disclosed his investment in July. McGuire's hedge fund, Marcato Capital Management, is Buffalo Wild Wing's fourth largest shareholder with a 5.2% stake. After months of unsuccessful negotiating in private, the fund manager is taking a more public stance. If there is still no progress, Marcato could push for board seats and announce a proxy contest early next year.

SpringOwl Asset Management claims that a $4.1 billion takeover bid for online gaming company Amaya Inc. (AYA) by the company's founder, David Baazov, lacks credibility and has distracted management.  In a letter to Amaya's current CEO and chairman, SpringOwl CEO Jason Ader urged Amaya to move on unless Baazov increases his cash bid and makes his sources of funding more transparent.  Ader also recommended adding three directors to represent shareholders.  Shares in Montreal-based Amaya are trading about 20% below Baazov's C$24 a share bid on concerns about the financing for his offer.  "If we have a credible bid with transparency, then we should consider it," Ader said.  "But the current price seems low and the lack of transparency and the information about the sources of funding raises a lot of questions."  He added that the uncertainties surrounding the offer are holding back a valuable company and delaying hiring.  In addition, Ader said Amaya should consider placing Baazov's shares in a divestiture trust.  Baazov is Amaya's second-largest shareholder with a 17% stake, according to regulatory filings.  New York-based SpringOwl, which owned less than 1% of Amaya as of Sept. 30, has more than doubled its stake since then, according to Ader.

Hedge fund Scopia Capital Management has been urging Forest City Realty Trust Inc. (FCE.A) to do away with its two-tiered stock structure. Forest City has agreed to dispense with the structure, reducing the Ratner family's control over the firm. The board has agreed to a proposal to shed the company's class B common stock, controlled by members of the Ratner, Miller, and Shafran families through RMS Limited Partnership. If shareholders approve the restructuring, each class B share will be converted to 1.31 shares of class A common stock. RMS plans to vote in favor of the proposal at Forest City's annual shareholder meeting in 2017, and the conversion would occur mid-year. Forest City also announced major board changes, including the retirement of Chairman Charles Ratner on Dec. 31 after 50 years at the company. "It has always been my intention to retire in 2016 at age 75," Ratner said in a statement. "And with the strong leadership of president and CEO David LaRue, ongoing guidance and oversight of our majority-independent board, and continued commitment from and involvement by members of the founding family, we have set Forest City on a strong path. I know the company is in good hands." James Ratner, executive vice president of development, will be appointed by the board as the next chairman, and he will give up his management role at the company. Bruce Ratner, the former CEO and current executive chairman of Forest City's New York operations, also will leave the board by the end of 2016. He will continue to work for the New York subsidiary. Meanwhile, longtime board member Stan Ross has decided not to stand for reelection. Ross' seat and Bruce Ratner's seat will be filled with independent directors; eight of the board's 13 directors will then be independent.

Chipotle Mexican Grill Inc. (CMG) plans to make an announcement soon about a new slate of board members, according to Co-CEO Steve Ells.  William Ackman has been urging the company to revamp its board, which comprises board members who have served for years.  Ackman's Pershing Square had a 9.9% stake in Chipotle as of September.  Ells says he understands the complaints about directors' tenure on the board.  He declined to say whether Ackman or someone of his choosing would get a seat on the board.

Consolidated Communications Holdings Inc. (CNSL) announced Monday it would purchase broadband service provider FairPoint Communications Inc. (FRP) in an all-stock deal valued at $1.5 billion, including debt. The move comes after FairPoint investor Maglan Capital earlier this year pressured the company to sell itself. "They do need to be part of a larger enterprise to ... get the best value for the business and shareholders," Maglan President David Tawil said. Consolidated's acquisition of FairPoint marks the fifth such deal this fall as growing demand for data and video services pushes companies to expand their fiber optic networks in new regions. The deal will help Illinois-based Consolidated, a broadband and business communications provider, expand into northern New England. Excluding debt, the equity portion of the deal is valued at roughly $561 million, or $20.72 per FairPoint share, according to Reuters calculations. This represents a premium of 21.9% to FairPoint's Friday close. The transaction, which is slated to close by mid-2017, is expected to add significantly to Consolidated's cash flow per share in the first year following the completion of the deal.

Swiss industrial company ABB is refining a plan to make its power grids division more profitable, despite calls from Swedish investor Cevian Capital AB to spin it off. Higher-margin services already comprise roughly 15% of sales, and this proportion will be raised to about one-third in the near future, said division head Claudio Facchin. Growth will come through bolt-on acquisitions and internal development. ABB is restructuring power grids in a bid to show the division is better off as part of the larger company. Cevian, the firm's second-largest shareholder with a 6% stake, had sought a breakup of the company. After putting the underperforming unit under review the previous year, CEO Ulrich Spiesshofer said in early October that the company would hold onto power grids. Cevian co-founder Christer Gardell called the decision "unfortunate." Greater reliance on services is partly behind ABB's plan to increase margins at the power grid division, according to Facchin. ABB in October raised the operational profit margin target and said the "transformation" of the unit would unlock more value than alternatives such as sale or spinoff. Power grids will also benefit from a companywide focus on digitalization, Facchin said.

Trian Fund Management's Nelson Peltz said the hedge fund has started building a new position in an undisclosed company. "We've started buying about two weeks ago. We of course can't announce it now. We've bought quite a bit of stock and we've got quite a bit more to buy," Peltz said in an interview. His firm often pushes for change at companies in which it invests. Meanwhile, Peltz—a board member of Mondelez International Inc. (MDLZ)—when asked about a potential merger between the company and Kraft Heinz Co. (KHC) said Mondelez was "doing a great job on their own." He also indicated that if President-elect Donald Trump's tax plan succeeds, it would result in more companies returning to the United States and higher employment. However, Peltz noted that 75% of Mondelez's sales are done outside the United States, so there is "no way" that the company would not have employees in foreign countries.

Sirius XM Holdings Inc. (SIRI) Chairman Greg Maffei recently spoke to Pandora Media Inc.'s (P) board regarding refreshed interest in a takeover of the Internet radio provider, Bloomberg sources reported. The move follows up on Sirius' offer earlier this year to acquire Pandora for roughly $15 per share, according to one of the sources. Sirius' latest approach reportedly did not include a price for Pandora. The company has not yet responded to the overture, but sources indicated that Pandora's advisers have begun sounding out other prospective suitors. Pandora shares climbed Friday following a CNBC report that the company is willing to engage with Sirius. Pandora has not decided if it will restart talks with Sirius, a source said. Since Sirius made its first offer, Pandora has made an effort to revamp its business model following pressure from Corvex Management LP. The company retained Centerview Partners LLC to advise on strategic options, sources said in July, adding that the adviser's role could be expanded to initiate a sale process with Morgan Stanley (MS) for Pandora.

Privet Fund is in discussions with management of Great Lakes Dredge & Dock (GLDD) about ways to maximize value, and its 13D language suggests it may pursue a board seat for one of its principals. Great Lakes CEO Jonathan Berger will step down by April 2017, but the company has not yet unveiled a clear succession plan. The period between CEOs can be an opportune time to explore the sale of a company; and Privet does mention "strategic plans" in its 13D filing. On the other hand, Great Lakes could seek out a new CEO to implement his or her business plan. Regardless, the board is approaching an important period for the company; and now is a good time to add new board members that could serve as shareholder representatives. With the upcoming nomination deadline, Privet can be expected to speak up about board composition sometime this month.

Royal Bank of Scotland Group PLC (RBS) announced Monday it would pay as much as £800 million ($1.02 billion) to settle claims with investor groups over allegations that it misled them during the financial crisis. In a statement, RBS said it had concluded settlements with three of the five shareholder groups without admitting fault. If an agreement cannot be reached with the other two groups, then a trial is slated for 2017. The fight relates to a £12 billion cash call just before a taxpayer bailout of RBS in 2008. Shareholders were suing the bank for £4 billion after claiming management at the time was not honest about the bank's financial health when it tapped them for funds. The bank said that 77% of those claims are now resolved. RBS initiated discussions with the shareholder groups earlier this year. One of the groups, the RBoS Shareholder Action Group, which represents thousands of retail investors, has vowed not to settle as it wants RBS's former management, including then-CEO Fred Goodwin, to face a trial.

Dethroned Tata Sons chairman Cyrus Mistry has approached shareholders of six Tata group companies to defend his position and spell out why he should not be ousted as director at the firms' upcoming shareholder meetings. In a letter to shareholders, Mistry also emphasized the need for governance reforms at the Tata trusts, Tata Sons, and Tata group companies. Tata Sons has requested shareholder meetings at group companies including Tata Motors (TTM) and Tata Consultancy Services (TCS) in an attempt to remove Mistry from the operating businesses of the $100 billion conglomerate. The move comes after it booted him as group chairman last month.

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RELEVANT ARTICLES

Facebook's Investors Criticize Marc Andreessen for Conflict of Interest
" Bloomberg (12/08/16) Frier, Sarah; Feeley, Jef"

Facebook Inc. (FB) shareholders allege director Marc Andreessen was advising the company's CEO when he should have been representing its investors, according to litigation filed in April and recently unsealed. Earlier this year, Facebook CEO Mark Zuckerberg sought to sell shares but protect his majority voting status. He proposed creating a new Facebook stock class, which had the potential to harm investors by weakening their voice in decision making. However, since Zuckerberg has majority voting control of the company, his proposal won the shareholder vote. Facebook's board had the power to influence the outcome before putting the vote to shareholders; but investors allege the process was flawed, as one board member seemed more interested in protecting Zuckerberg than minority shareholders. In August 2015, Facebook's board set up a special committee to represent shareholders while considering the matter, according to a regulatory filing. One of the three panelists was Andreessen. While on the committee, Andreessen reportedly fed Zuckerberg information about its progress and concerns, helping the executive to negotiate against them. The concern is that minority shareholder interests were not properly represented by the committee if Andreessen played both sides of the negotiation.

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More Women on Boards=Higher Dividend Rates
" Reuters (12/08/16) Saft, James"

The more female independent directors serving on a company's board, a new working paper finds, the higher the percentage of net income that shareholders reap in the form of dividends. According to the Cardiff University authors, there is a 1.67-percentage-point gain in the dividend payout ratio for every 10-percentage-point rise in the share of companies' independent board members who are women. The study tracked firms in the S&P 1500 index from 1997 to 2011, during which time the mean firm paid out roughly 23% of its net income. The most significant jump in dividend payouts was among companies with weak corporate governance, the study notes. "We find that board gender composition significantly increases dividends only for firms with weak governance, suggesting that female directors use dividend payouts as a governance device," the authors write. It is not the first study to discover a relationship between having women on the board and improved shareholder oversight.

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Knight Vinke Warns European Investment Banks Too Small to Thrive
" Reuters (12/07/16) Davies, Anjuli"

Knight Vinke predicts European investment banks will have to combine with U.S. or Chinese competitors because they lack scale and have no deep domestic market to subsidize their activities.  Eric Knight, who founded the fund in 2002, said that slimming down was not the solution to a squeeze on margins driven by tighter regulation.  "Is there a future for investment banks in Europe?  I think there is, but it comes from the outside.  They need to merge and re-incorporate outside Europe," said Knight.  "One place is the U.S. and the other is China.  European investment banks should merge with peers in those countries to create something viable.  There would be tremendous value for shareholders," he added.  Knight Vinke unsuccessfully pressed Swiss bank UBS to separate its wealth management business from its investment bank in 2013.  It closed its position a year ago, although Knight said in February he would consider reinvesting.  He remains especially interested in UBS and Credit Suisse and anticipates that with risks growing in the economic system, change could come next year if there is another crisis.  Knight Vinke's main fund is up about 50% so far this year, driven by its position in electrical retailer Darty which was bought by French music and book chain Fnac.  Knight invests across sectors in Europe as well as in banks, but is eyeing in particular Switzerland, Germany, and the Nordic nations.  "I'm focused on countries that would survive a break-up of the euro zone," he said.

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Chipotle, Buffalo Wild Wings at Heart of Activist Feeding Frenzy
" Bloomberg (12/07/16) Patton, Leslie"

Bill Ackman, who stepped in to help turn around Chipotle Mexican Grill Inc. (CMG) this year after snagging a nearly 10% stake, is playing an increasingly common role at restaurant brands.  Roughly 14% of the industry's publicly traded companies with a market value of at least $100 million have attracted an activist investor, according to data compiled by Bloomberg.  U.S. same-store sales declined 0.6% at restaurants in October, following the worst third quarter in six years, according to MillerPulse data; and poor performance is a problem activists believe they can resolve.  "Activists get involved in the restaurant space because, in many cases, there's a playbook that's been written on creating value," said Peter Saleh, an analyst at BTIG LLC in New York.  Dining companies are easy to understand, and many of them have seen their value fall, he explained.  Marcato Capital Management LP this week reiterated that it would push for changes at Buffalo Wild Wings Inc. (BWLD) and announced it is pressing the eatery to sell hundreds of locations with a 90% franchised goal, compared with 49% now.  Sandell Asset Management has called for Bob Evans Farms Inc. (BOBE) to split off its packaged-foods business; Keith Meister's Corvex Management successfully pushed Yum! Brands Inc. (YUM) to separate its struggling China unit; and Engaged Capital increased its stake in Jamba Inc. (JMBA) over the summer.  BTIG's Saleh said that Red Robin Gourmet Burgers Inc. (RRGB), whose stock has fallen 24% in the past year, may come under pressure next.

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More Than Half of Public Company Boards Recognize the Effects of Short-Termism
" Globe Newswire (12/05/16)"

The National Association of Corporate Directors (NACD) on Monday announced the release of its 2016–2017 NACD Public Company Governance Survey. Of the more than 600 governance professionals and public company directors polled, 75% indicated that pressure from external sources to make short-term gains is compromising management's focus on long-term strategic goals. Furthermore, 60% of respondents selected "global economic uncertainty" as one of the five trends that will have the greatest impact on their companies over the next 12 months. Another key finding is that over 50% of boards now assess whether incentives used in their firms' compensation structure could inadvertently create or magnify unintended risks. Meanwhile, just 19% said their boards possess a high level of knowledge regarding cybersecurity.

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Recent Developments in Proxy Access
" JD Supra (12/05/2016) Hoang, Cam; Tygesson, Gary"

Last year, companies that had already adopted mainstream proxy access bylaws, or that were planning to put mainstream proxy access bylaws up for a shareholder vote, were largely successful in being able to exclude shareholder proposals to adopt proxy access bylaws on the grounds that such proposals had already been “substantially implemented.” Until recently, the Securities and Exchange Commission staff had generally denied requests to exclude such proposals. Moreover, a shareholder has now attempted to use a proxy access bylaw to nominate a director candidate and to have that candidate included in the company's proxy statement. Pressure on companies that have not yet adopted proxy access is likely to continue into and through the 2017 proxy season, according to Cam Hoang and Gary Tygesson of Dorsey & Whitney. Approximately 40% of S&P 500 companies have already adopted proxy access bylaws proactively or following a shareholder proposal or negotiations with a proponent, and the number could grow to 50% by the end of the 2017 proxy season. However, the ability to exclude a shareholder proposal to adopt a proxy access bylaw based on substantial implementation remains very strong. When analyzing whether to adopt or amend proxy access bylaws, companies and their boards of directors should factor in the likely use of proxy access by pension funds and other investors, conclude Hoang and Tygesson.

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SMFG Plans Nominating Committee to Pick Top Execs More Transparently
" Japan Times (12/04/16)"

Sumitomo Mitsui Financial Group Inc. (SMFG) intends to establish a nominating committee in 2017 in accordance with revised corporate law that calls on outside directors to take leading roles in appointing top executives. The move not only aims to bolster corporate governance in Japan, but also to end the long-held custom of presidents handpicking their successors. A company with a nominating committee is mandated to win its approval prior to proposing executive appointments to shareholders. Outside directors need to constitute more than 50% of the members of the nominating committee, which should make it harder to make backroom appointments. SMFG's rivals, Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc., established nominating committees last year and the year before, respectively. Sumitomo Mitsui Trust Holdings is now contemplating a similar move.

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Goldman, Citigroup in Crosshairs of Diversity Activists for 2017
" Bloomberg (12/06/16) Colby, Laura"

Large U.S. financial institutions will face pressure next year from Arjuna Capital, Trillium Investments, and Pax World Management, which are demanding the companies disclose compensation data for men and women, and publish statistics about the race and gender of their employees. Goldman Sachs Group Inc. (GS), Citigroup Inc. (C), Bank of America Corp. (BAC), and Wells Fargo & Co. (WFC) are among the institutions in the sights of the investors, which say a diverse workforce produces better returns. Though the investors are relatively small, they have succeeded in pushing tech giants such as Apple Inc. (AAPL) and Intel Corp. (INTC) to disclose data about pay gaps. Arjuna has filed proposals asking Bank of America, Wells Fargo, American Express Co. (AXP) and Citigroup to report disparities in pay for male and female employees. It plans to file a similar proposal at JPMorgan Chase & Co. (JPM) on Tuesday, said Natasha Lamb, Arjuna's director of equity research and shareholder engagement. In the 2016 proxy season, Lamb filed proposals at nine tech companies, including Apple and Intel, asking them to disclose their gender pay gaps. Seven agreed to make their gaps public and take steps to close them. Pax World Management filed five resolutions on gender pay equity this fall, and said it is in talks with Goldman Sachs and Bank of New York Mellon Corp. Although just a minor proportion of shareholder proposals actually go to a vote, and fewer pass, the investors said they aim to draw attention to the issue and get companies to engage with them.

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Corporate Governance Norms: Sebi Wants Tata Group Firms Audit Panels to Probe for Breach
" Indian Express (12/05/16) Vikraman, Shaji; Narayan, Khushboo"

The Securities and Exchange Board of India (Sebi) reportedly has asked stock exchanges to direct Tata Group firms to address the concerns raised by Cyrus Mistry, former chairman of Tata Sons, before the audit committees of listed firms for evaluation.  According to sources, the market regulator is examining the Tata-Mistry boardroom feud for any potential breach of corporate governance norms at various listed companies of the conglomerate.  The regulator's move comes after Mistry leveled a series of allegations against the Tata group and his predecessor, Ratan Tata, ranging from fraudulent transactions to unethical practices and conflict of interest.  Mistry specifically cited a "total lack of corporate governance," according to his email.  JN Gupta, managing director of proxy advisory firm Stakeholders Empowerment Services, noted "the Sebi move to refer the matter to the audit committees of listed firms is the first step in establishing the truth" of the allegations.  The findings of the audit committee will form the basis of further action by the market regulator, Gupta said.  Following Mistry's email, the stock exchanges had sought clarification from the firms on his allegation that the group could face $18 billion in write downs.

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Looking in the Crystal Ball: Proxy Advisory Firms in the Spotlight
" Lexology (12/02/16) Barsamian, Bonnie; Diffley, Elizabeth A.; Lanis, JR"

Proxy advisory firms will likely be in the rule-making and regulatory spotlight as Republicans control Congress and a new chairman and new commissioners lead the U.S. Securities and Exchange Commission (SEC). The Corporate Governance Reform and Transparency Act of 2016, which would tighten regulation of proxy advisory firms, received the support of the House Financial Services Committee in June 2016. Bonnie Barsamian, Elizabeth A. Diffley, JR Lanis, and colleagues at Drinker Biddle & Reath expect to see similar bills introduced in the 115th Congress. The demand for proxy advisory services has increased as well as their influence on topics such as corporate governance and compensation practices. No rule-making resulted from the SEC's "Proxy Advisory Services Roundtable" in 2013, but the following year it published guidance on investment advisors' responsibilities related to the firms and voting. The counterview to tighter regulation is that proxy advisory firms provide useful services to institutional investors, and opponents say it could chill the independence of proxy advisers and undermine their role in protecting investors. Drinker Biddle & Reath believes "a new SEC will build on the dialogue and the focus facilitated by its predecessor commission and consider regulation in light of growing attention on proxy advisory firms."

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