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Voice of the Director

“Excellence is a better teacher than mediocrity. The lessons of the ordinary are everywhere. Truly profound and original insights are to be found only in studying the exemplary.”

This is a quote by Warren Bennis, distinguished USC scholar and a pioneer of the contemporary field of leadership studies. NACD is about advancing exemplary board leadership. Our chapter has been fortunate to have a great teacher in

Dann Angeloff. Dann became a member of NACD on February 16, 1978. There are only two people that have been members of NACD longer, and they are the founder and a former CEO. Dann served as chapter President and Chairman and for the last several years has provided guidance as a member of our board and Founding Chairman Emeritus. Dann shared with us his experience as a corporate director for over 50 companies and always challenged our chapter to pursue excellence. Dann knew Professor Bennis well as a long time USC supporter and volunteer. Dann has served in many capacities for the university including on its Board of Trustees. While Dann retired from our board on June 30th we will continue to benefit from his counsel as we strive to advance exemplary board leadership.

It is fitting that our 2016 events calendar ends with a full day partnership with USC. On November 16, 2016 you can join the community of corporate directors pursuing excellence and exemplary board leadership when NACD So Cal and USC Marshall School present the 2016 Corporate Directors Symposium entitled “Governing in a Time of Seismic Change” at Tutor Hall on the USC campus. Let’s all do as Professor Bennis exhorted us by “studying the exemplary.”

As we return from summer travels, your NACD chapter is planning a number of programs over the coming months, all focused on addressing topics of critical interest to directors. A couple to highlight:

On November 1st, we will be hosting a "lightning round"-style discussion of 10 Key Questions Every Director Should Ask. Join us for lunch and interaction with leading experts on a wide range of critical boardroom issues.

On November 16th, in conjunction with the USC Marshall School, we will be staging our annual Corporate Directors Symposium, focused on governance in a time of seismic change. Our program includes a keynote by Peter Diamandis, founder of

the XPrize Foundation, a “live” cyber simulation, and discussions of talent management across generations, the current state of play with activism and the potential impact of both domestic and international political developments. The program will also include opportunities to meet with peers who serve on key committees (audit, comp, nom/gov) and a concluding reception at USC’s Heritage Hall.

Our focus in planning all of our programs is to provide opportunities for directors to engage with peers on critical boardroom issues, leveraging the great stream of thought leadership produced by NACD. If you have a topic that you think we should be addressing, please don’t hesitate to contact our Programs & Outreach Chair, Ken Cleveland (kcleveland@bcillc.com) or me (drosenblum75@gmail.com).

I look forward to seeing you at NACD So Cal programs in the months ahead!

October 2016 • Vol. 7

http://southerncalifornia.nacdonline.org

Message From The President

Chairman’s Corner

David L. RosenblumChapter President

Dann V. AngeloffM. Christian MitchellChapter Chairman

southerncalifornia.nacdonline.org

Message from the President .....................................................................1Chairman’s Corner ........................................................................................1Upcoming Events .........................................................................................2NACD Directorship 2020 with Fay Feeney.......................................2-32016 NACD Directorship 100 ...................................................................3New Board Appointments ....................................................................3-4Recent Program Recaps .........................................................................4-8Welcome New Full Board Members.......................................................9Thank You for Attending our Events ......................................................9Newsworthy Members and Sponsors ................................................ 10Members....................................................................................................... 11Sponsor Highlights ................................................................................... 12

Inside This Edition

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Voice of the Director

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Voice of the Director

Stay Connected: 1

Upcoming Events (click here for more information)November 1, 2016:Lunch Event: 10 Key Questions Every Director Should Ask

November 16, 2016:2016 Corporate Directors Symposium: Governing in a Time of Seismic ChangeClick here to register.

NACD Directorship 2020 with Fay FeeneyBig congratulations to Dorene Dominguez who was recently appointed to our National Association of Corporate Directors Southern California Chapter Board of Directors.

Dorene is Chairman of the Board at Vanir Construction Management, Inc. and serves as a Board Member for CIT Bank and sits on the Regulatory Compliance Committee. She is a member of the Advisory Council of the Institute for Latino Studies at the University of Notre Dame, a member of the Advisory Council

of the Lusk Center for Real Estate at the University of Southern California, and on the board of the Latino Donor Collaborative. Additionally, she is a member of the World Presidents Organization.

As a well-respected business leader we look forward to gaining new perspectives along with her ambassadorship in expanding our “peer to peer” experiences with the Latino Corporate Directors community.

Her firm, Vanir Construction Management, Inc. has been providing quality construction management services to clients across the United States and internationally. Vanir is known for Dorene’s leadership commitment to creating a long-lasting impression on her community and on the world.

This year’s NACD Blue Ribbon Commission explores building and maintaining a strategic-asset board, focusing on issues such as board composition and diversity, succession planning, board evaluation processes, and ongoing director-skills development.

Let’s hear from an experienced board leader on how our boardrooms can move beyond the traditional approaches to board refreshment and develop a continuous-improvement plan that keeps board skill sets and processes in tune with the company’s strategic needs.

Fay Feeney:Why does serving on corporate boards and now on the NACD So Cal Board interest you?

Dorene Dominguez:The largest growing market is Latinos and there is no voice for them in the corporate boardroom. It is important for companies to understand this emerging market and therefore better serve the shareholder.

Fay Feeney:As a Board Chair, CEO and a Latina, how do you see our boardrooms moving beyond the traditional approaches to board refreshment?

Dorene Dominguez:You can’t continue to do the same thing and expect different results. We have to start taking a look at candidates outside of corporate boards, and consider those who serve on non-profits, advisory boards, etc., to bring their expertise to the board room.

Fay Feeney:In your opinion, what are the best ways for board members to take responsibility in developing a continuous-improvement plan that keeps board skill sets and processes relevant?

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Fay Feeney

Dorene DominguezCEO and Chairman, Vanir

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From Presidential politics to Brexit, from data analytics to the sharing economy, from aging Baby Boomers to the Trans-Pacific Partnership…

Governing in a Time of Seismic Change2016 Corporate Directors Symposium

Presented by The National Association of Corporate Directors Southern California Chapter and USC Marshall School of Business

Wednesday, November 16, 20168 a.m.- 5:30 p.m., Ronald Tutor Campus Center, USC Join an intimate gathering of colleagues from many of our region’s most influential corporate boards. Candid speakers, roundtable discussions and small-group breakout sessions will highlight important strategies for aligning stakeholders, fueling dexterity, and securing your organization’s footing atop the rumble of socioeconomic uncertainty.

$750 individual registration after October 15

$675 early bird registration Attendance is limited

PANELS AND BREAKOUT SESSIONS

Peter H. Diamandis, MDFounder and Executive Chairman of the XPRIZE Foundation, Co-Founder and Vice-Chairman of Human Longevity Inc., and Co-Founder and Executive Chairman of Singularity University

KEYNOTE SPEAKER

Roundtable Sessions: Audit and Risk, Compensation, Nominating and Corporate Governance, Building Your Brand as a Corporate Director

Breakout SessionsLongevity Changes Everything – What All Corporate Directors Need to KnowPaul Irving, Chairman, Milken Institute Center for the Future of Aging

Generational Issues in Talent ManagementCaroline Nahas, Vice Chairman & Senior Client Partner, Board & CEO Services, Korn FerryDebra Fiori, Corporate Vice President, Talent Management, Parsons Corporation

Panel SessionsWe’ve Been Hacked!! What Now?Cameron Kerry, Senior Counsel, Sidley Austin LLPChristine Garvey, Board Director, MUFG Union Bank, HCP, Inc., Prologis and Toll BrothersJason Lidow, President and Founder, DigiTrust GroupBob Zukis, Global enterprise SaaS business leader and advisorColleen Theresa Brown, Partner, Sidley Austin LLPRyan Toohey, Managing Director, Strategic Communications, FTI ConsultingJoan Herman, President and CEO of Herman and Associates LLC

FOUNDING SPONSOR

SPONSORS

Reception immediately following at USC Heritage Hall with welcome from Lynn Swann, USC Athletic Director and legendary Hall of Fame wide receiver

Perspectives on Shareholder ActivismStephen L. Brown, Senior Advisor, KPMG Board Leadership CenterVeronica M. (Ronee) Hagen, Board Director, Southern Company, Newmont Mining, and American Water WorksAndrew Shapiro, Founder, Lawndale CapitalPaul Tosetti, Partner, Latham & Watkins LLP

A Changing Political ContextJerrold D. Green, President and Chief Executive Officer, Pacific Council on International PolicyJohn Matsusaka, Professor of Finance and Business Economics, University of Southern CaliforniaJames P. Sarni, Managing Principal, Payden & Rygel

Moderator – Rose McKinney-James, Managing Principal of Energy Works LLC and McKinney-James & Associates

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2016 NACD Directorship 100

New Board Appointments Kimberly Alexy Microsemi Corp. (NASDAQ:MSCC)Principal, Alexy Capital Management

Marjorie Bowen ShoreTel (NASDAQ: SHOR)Former investment banker with Houlihan Lokey

Gregory Spierkel MGM Resorts International (NYSE:MGM)PACCAR (NASDAQ:PCAR)Schneider Electric SE(EPA:SU)

Charles Yamarone El Paso Electric Company (NYSE:EE)Houlihan Lokey (NYSE:HLI)

Ron Bension SeaWorld Entertainment (NYSE:SEAS)President of House of Blues Entertainment for Live Nation(NYSE:LYV)

Kathleen Brown Stifel Financial Corp. (NYSE:SF)Partner in the Government and Regulatory Affairs Group at Manatt, Phelps & Phillips, LLP

Mary Fedewa STORE Capital Corporation (NYSE:STOR)Executive Vice President – Acquisitions for STORE Capital

Stephen Hansen The James Campbell CompanyRetired Partner and Managing Director of Clarion Partners

Leslie Heisz Edwards Lifesciences Corporation (NYSE: EW)Former Managing Director, Lazard Freres & Co.

Daphne Dufresne United Natural Foods (NASDAQ:UNFI)Former managing director of RLJ Equity Partners

Tamara Hughes Gustavson American Homes 4 Rent (NYSE:AMH)Real estate investor and philanthropist

Eddy W. Hartenstein Yahoo! (NASDAQ: YHOO)Director and Former Chairman of Tribune Publishing Company

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Bruce Edwards Lantronix (NASDAQ:LTRX)Semtech (NASDAQ:SMTC)

Karen Bogart Mohawk Industries (NYSE:MHK)

NACD Directorship magazine each year identifies the most influential people in the boardroom community, including directors, corporate governance experts, regulators, and advisors. Promoting continued economic growth remains a priority for policy makers and directors alike. Therefore, NACD Directorship 100 recognizes those who

participate in actual board work who influence how that work is done.

Congratulations to the 2016 honorees within our chapter’s territory!

Click here for the full list of 2016 honorees.

Dorene Dominguez:There are three important components in keeping board skills and processes relevant: diversification, continued education and understanding the business. Diversifying boards opens up a more creative dialogue and provides different perspectives. Continued education of board members ensures that the best

practices are being executed in terms of governance compliance. And lastly, it is essential that board members understand the business they oversee by attending company meetings and debriefings made by the Chairman. These are a few ways to maintain relevance in a fast-paced era.

NACD Directorship 2020 with Fay Feeney (continued)

M. Freddie Reiss TCP Capital Corp. (NASDAQ: TCPC) Retired Senior Managing Director of FTI Consulting

Larraine Segil Vanir Construction ManagementNACD Board Leadership Fellow

Pedro J. Pizarro Edison International (NYSE: EIX) President of Edison International; appointed CEO of Edison International effective 9.30.16

Lisa Greer Quateman UCLA Alumni Association – Vice-Chair of Board of DirectorsPartner of Los Angeles office of Polsinelli LLP

Sharon Rowlands Pegasystems Inc. (NASDAQ:PEGA)CEO of ReachLocal (NASDAQ:RLOC)

Mark Sklar STORE Capital Corporation (NYSE:STOR)Founding partner of DMB Associates, Inc.

Scott Ullem Berry Plastics Group, Inc. (NYSE:BERY)CFO of Edwards LifesciencesCorporation (NYSE:EW)

Daniel E. Pittard WD-40 Company (NASDAQ:WDFC)Former president and CEO of Rubio’s Restaurants Inc.

Brian Niccol Harley-Davidson, Inc. (NYSE: HOG) CEO of Taco Bell Corp.

New Board Appointments (continued)

Recent Program RecapsInstitutional Investor’s Perspective –April 28, 2016

NACD Southern California held a lunch event on Thursday, April 28th, 2016, at The California Club in downtown Los Angeles.

The program was moderated by M. Christian (Chris) Mitchell,

currently chairman / lead independent director of four companies, and the two panelists were Michelle Edkins, managing director of BlackRock (NYSE:BLK), and Anne Sheehan, director of corporate governance at CalSTRS.

Key Takeaways:1. Board value add: • Board members must add value both individually and collectively by being active and engaged. • Must focus on strategy, succession, and “long-termism.” Supportive of the recent annual letter from Larry Fink, Chairman of BlackRock, to CEOs of large public companies.

2. Strategy: CEO and the company must articulate the long-term strategy with short-term steps regarding achievement, so that progress can be measured.

3. Tenure and over-boarding are more important than age in determining suitability of director re-election, although 15 years was considered too long.

4. Shareholder Engagement: Both BlackRock and CalSTRS

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Chris Mitchell, Michelle Edkins, Anne Sheehan

Anna Kan CVB Financial Corp. (NASDAQ:CVBF)Former President and CEO of Formosa Meat Company

Jacqueline Kosecoff, Ph.D. Yahoo! (NASDAQ: YHOO)Houlihan Lokey (NYSE: HLI) Managing Partner, Moriah Partners, LLC

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are huge institutions that have a stake in almost all public companies. It is best to approach them in the proxy off- season. Better yet: “Keep us informed, but don’t call us, we’ll call you.”

5. Activists: Both BlackRock & CalSTRS are very selective in where and if they get involved with activists. Activists are better prepared and more knowledgeable than (unfortunately) many board members, and in certain cases better than management. The activists allocate huge resources to study a company before approaching it.

6. Cyber / ESG / disruptive technologies: Board should

understand how the company is managing the risk rather than designating a board member who is an expert at cyber or ESG, etc. Cyber, ESG, technologies, etc. are risks that should be collectively managed by the board.

7. Other items: • General Electric and Prudential are good examples of model proxies that are comprehensible with clear language, adequate explanation, and graphics. • Good example of a political issue “slopping into” shareholder issue is the amount of cash held overseas, and the populist tone in the current political campaign climate.

Harmonizing Goals of Outside Directors with Management Teams – May 17, 2016

On May 17th, NACD Southern California held a luncheon at The California Club in downtown Los Angeles with 55 people in attendance. Ron Sugar, Chairman Emeritus of Northrop Grumman (NYSE:NOC), shared his perspective on aligning the goals of boards and management teams. This fireside chat was led by NACD So Cal board member Rafael Pastor, and the following are 10 key takeaways from this informative and lively exchange:

1. In today’s environment, directors must get three things right: • Leadership – Directors are responsible for selecting the right CEO for the right time in the company’s lifecycle and hiring or retiring a CEO if necessary. • Strategy – Good directors must understand, challenge, adopt and improve the company’s strategy. • Risk – Directors must have a strong command of all compliance risks as well and enterprise risks to the business.

2. Although all of the above concepts should apply, a director’s application of these ideas differs somewhat when it comes to public companies versus private entities. • In public corporations, directors are almost obsessed with the public nature of regulations, compliance processes, reporting, etc. • In private equities, directors are less concerned with optics and public perception and can focus much more on creating value for owners.

3. Tension between fiduciary obligations and social responsibility has become one of the focal points of large cap corporate America. • In the last 30-40 years there has been an increased sense of social responsibility. • With everything now so visible due to technology and media, people have begun to expect companies to do the right thing socially, not just financially.

4. Board diversity is critically important in representing shareholders. • Boards should bring diverse opinions, backgrounds, and life experiences in order to determine what is in the best interest of the company and its shareholders, and ultimately the CEO has been selected to make these final decisions.

5. Not-for-profit boards: • Typically a non-profit board will be much larger than a for- profit company for good reasons, including broader community reach and greater access to resources. • The best way to run a not-for-profit board is to have an executive committee with a lot of business experience within the board (a board within the board).

6. A best practice for boards is to frequently assess and discuss the following questions: • What is around the corner that we could be missing and are we allocating enough time to thinking about this? • What should we be doing to protect against threats to our business being cannibalized or killed? • How can we adapt and transform to meet potential challenges?

7. Boards and activists: • Fundamental defenses of an organization have been chipped away over the years. • Put yourself in an activist’s shoes – if we were outside investors and we took over our company, what changes would we make? • Activists can have a multiplying effect and performance is the best defense. Put aside ego and engage with activists rather than going to war.

8. Management vs. Board Compensation and accountability: • Management compensation should be linked to company

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Recent Program Recaps (continued)

May 17th Luncheon

Recent Program Recaps (continued)

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Karen Bogart, Larry Taylor, Larraine Segil, Sung Won Sohn

performance and shareholder return. Sale of shares should be restricted so that compensation is ultimately tied to the financial health of the company long term, thus creating long-term interest. • Board compensation is never commensurate with the challenges directors face. Directors should serve on boards because they feel it is their duty to do so.

9. Boards and management teams should not always be

in harmony. It is important for boards to be continuously challenging company strategy, but in an intelligent, constructive way.

10. Closing thought from the perspective of an enlightened CEO: • As a CEO you always want to leave the place better than when you came in, and with a team in place that can take the company to a place you never could have taken it if you stayed.

Leading Change – Board and Investor Perspectives, a Conversation with Ted Craver – July 19, 2016

NACD Southern California and NIRI Los Angeles hosted a joint lunch event on Tuesday, July 19, 2016, at the California Club in downtown Los Angeles. Ted Craver, Chairman, President and CEO of Edison International (NYSE:EIX) was featured as the keynote speaker. The conversation was facilitated by Scott Cunningham, Vice President, Investor Relations, Edison International and David Rosenblum, President, NACD Southern California.

Key Takeaways:

1. Leadership in Transformative Times: During Craver’s tenure, the utility industry has experienced a tremendous transformation and is expected to change more in the next 10 years than we have seen in Edison’s 130 year history. Contrary to traditional energy companies, Edison has repositioned itself as a distributor, not a generator of

electricity. This allows the Company to invest in a larger and more effective network, rather than spending money and other resources on manufacturing. Craver noted the importance of getting management onboard with the transition and getting investors to embrace the change.

2. Investor Relations a Priority – Direct Access Considerations: Edison is a high-growth, lower-yield stock while the typical utility investor looks for predictability, low volatility, and a large dividend. This creates the need for a robust, proactive investor relations program. Craver dedicates personal time to investor relations and makes sure that the board stays current on what investors and research analysts think about the Company’s strategies. While Edison has invited investors and analysts to make presentations to the board, Edison discourages direct access to their board members, encouraging investors to go through management, who are considered the spokespeople of the Company. This policy is

The Global Economy and Corporate Governance Implications – May 31, 2016

On Tuesday, May 31st, NACD Southern California, in conjunction with the Channel City Club and California State University Channel Islands, hosted a lunch program in Santa Barbara entitled “The Global Economy and Corporate Governance Implications.” There were over 100 attendees at the event. The program included a twenty minute presentation on the current state of the global economic markets by Dr. Sung Won Sohn, followed by a corporate governance panel of seasoned corporate directors discussing board deliberations during times of economic uncertainty.

The presentation focused on the impacts of China’s stagnant economy, the Federal Reserve increasing interest rates, the volatility of oil prices and increasing government regulations. In addition, it addressed the potential impact of Britain leaving the European Union.

The panel was moderated by Dr. Karen Bogart. On the panel were Dr. Larry Taylor, Ms. Larraine Segil and Dr. Sohn. The panelists responded to questions such as, “What questions should board directors ask management given the global economic uncertainties? What are some best practices for boards employ to ensure strategic focus in uncertain times? What are some key risk indicators that boards should consider? How do you track and address non-financial disruptions related to regulations, cyber security, sustainability and operations concerns?”

Among the panelist responses were to ask management to demonstrate the firm has adequate recruitment, development and retention of human capital; adequate access to financing; alternate strategies for different scenarios; a flexible enterprise risk management system; and active succession planning and board evaluation. The event received a 4.6 average rating on our 5.0 scale from attendees. It was another interesting and successful program. Also, in attendance was Mr. Brandan Nass of NACD National and Mr. Ken Cleveland, the incoming NACD So Cal Chapter Programs Committee Chair, who gave the closing remarks.

Recent Program Recaps (continued)

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clearly outlined in Edison’s corporate governance policy.

3. Board Tenure and Onboarding: Edison’s approach to board and management shifts, onboarding and overall dynamic is unique. The Company has strict tenure and age limits, which allows for frequent refreshment of the board and the ability to broaden the board’s skill set and experience. Edison takes a very structured and more personal onboarding process than most, including a welcome dinner at Craver’s home.

Upon Craver’s retirement, the Company will separate the CEO and chairman roles, bringing on Pedro J. Pizarro as the new CEO and William P. Sullivan as the new executive chairman. Craver emphasized the importance of defining the roles of the CEO and the executive chairman and for the board to make sure this relationship works well and supports decision making that is best for the Company.

4. Cybersecurity Risk Management: A large part of the energy industry’s transformation is in technology innovation and a move towards more computerized systems. Any time a company moves into the digital space, cybersecurity risks increase exponentially and could be a “game-over” issue if proper precautions are not taken. Since Edison largely relies upon outside manufacturers for most of their system’s components, these risks are particularly high and the Company must constantly conduct audits and question security measures in place. Edison has formalized a cybersecurity team led by board member Ellen Tauscher that ensures the board members are regularly briefed on cybersecurity.

Latina Leaders in the Boardroom –September 7, 2016

NACD Southern California held a lunch meeting on Wednesday, September 7th, 2016 at The California Club in downtown Los Angeles. During the lunch, Larraine Segil moderated a discussion with two dynamic Latina leaders talking about diversity and success in the board room. Aida Alvarez, Chairman of the Latino Community Foundation, and Dorene Dominguez, Chairman of the Vanir Group of Companies, provided insight on corporate growth in California and tips on how to take advantage of economic opportunities in a diverse community.

Aida has been an award-winning journalist, a successful investment banker, and a member of President Clinton’s Cabinet. She currently serves on the boards of Hewlett Packard (NYSE:HPQ, Oportun and Zoosk and chairs the Latino Community Foundation. Dorene, inheriting Vanir Construction from her father, now oversees 24 offices throughout the United States, Dubai and Saudi Arabia. Dominguez also founded The Vanir Foundation, a nonprofit organization dedicated to partnering with elementary schools in selected Vanir service areas to bring innovative programs to children in underserved communities.The following are 10 key takeaways from their discussion:

1. Diversity brings new and different perspectives, cultures, and backgrounds, allowing you to better meet the needs of your markets. Dorene highlighted that the buying power for the Latino market, for one, is $1.2 trillion, so the absence of having a Latino on your board could be devastating. Ultimately, you want the board to look like your customers. If you want to be better and attack those markets, diversity is the key to success.

2. With that said, Aida noted, “each person brings certain experience and expertise that has to be of value to the board, irrespective of whether they are man, woman, Hispanic, Caucasian, or something else.” In order to be a good leader and a successful board member, you must constantly be learning new things and meeting new people. “If you are not uncomfortable, you are not learning,” Alvarez also stated.

3. You have to be willing to talk about failure and how to get through that failure. You shouldn’t be afraid of who you are or your experiences, these are what make you unique and of value.

4. A lot of being a successful board member is also about the relationships you develop and how well you can work with other board members. Knowing how to respect each other, even when coming from different perspectives, and how to appreciate what the other person is trying to accomplish, even though that may not have been where you originally intended to go, is crucial.

5. Social responsibility is now more important than ever in corporate America. “It makes a difference just because it makes good business; regulation is one thing but good business stands,” stated Larraine. Today, increasing shareholder profits are based on social responsibility and companies that do not have a social agenda see profit loss.

6. Company culture is another significant consideration when running a business or sitting on a board. About 72% of employees in America are disengaged from their jobs which is costing companies about half a trillion dollars a year

David Rosenblum, Ted Craver, Scott Cunningham

Recent Program Recaps (continued)

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Latina Leaders in the Boardroom

Got an idea for an NACD So Cal Chapter Event? Submit your ideas for

programming toadmin@nacdsocal.org

Membership BenefitsNACD membership comes with access to benefits that arm members with the resources to make informed decisions at the Board level.

Click to see full list of benefitsClick to join!

in productivity and profitability. Having good company culture and high retention rates are directly correlated with profits. Giving employees a sense of appreciation, connection, and engagement is very good for morale and in turn, great for the bottom line.

7. Creating positive company culture is a role directors can help play as customer and employee retention is one of their

key responsibilities. Millennials are more interested in social responsibility, company culture, and quality of life than in profits and if you do not change with the trends, your retention rates, specifically of millennials, will significantly narrow and your bottom line will suffer.

8. Learn how to work with a team and where your strengths lie. Being a successful board member is a very delicate balance of having the courage to speak up but also the ability to fit in.

9. The biggest area Latinos in particular could grow in is financial experience. Being a good leader is important but being a good leader who can deliver results is where real success lies.

10. The women closed with some advice to those either aspiring to be on a board or for those already in seats. A lot of it is about relationships that you develop, so you should be doing as much association work as possible in your industry to build your network. You must go out and create context and build credibility.

Welcome New Full Board Members

Thank You for Attending our Events

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Motorcar Parts of America (NASDAQ:MPAA) is a remanufacturer, manufacturer and distributor of automotive aftermarket parts -- including alternators, starters, wheel hub assembly products, brake master cylinders, brake power boosters and turbochargers utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. Motorcar Parts of America's products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with facilities located in California, Mexico, Malaysia and China, and administrative offices located in California, Tennessee, Mexico, Singapore, Malaysia and Toronto. www.motorcarparts.com

Northrop Grumman Federal Credit Union is a full service credit union based in the Los Angeles bay area of California. They offer a wide variety of loan products such as personal lines of credits and auto loans. They also offer several types of auto loans for used and new automobiles.www.ngfcu.us/home/index.aspx

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The A. F. Gilmore Company is a family-owned business that has roots in Los Angeles dating back to 1872. The Company owns and operates The Original Farmers Market, a Los Angeles landmark since 1934. With over 100 grocers, retailers and restaurants, The Farmers Market is a beloved destination for locals and the number one visitor destination in Los Angeles. The Company also has additional real estate holdings in Los Angeles. It has a rich legacy of businesses in Los Angeles, including the Gilmore Oil Company (1900 – 1945), which was the largest oil company west of the Mississippi, Gilmore Stadium (1934-1950), Gilmore Field (1939-1957), Gilmore Drive-In Theatre (1948-1979), and Gilmore Bank (1955-2013).

Newsworthy Members and Sponsors

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The RMA Journal, June 2016Article excerpted from “A Director’s Voyage through Risk Management,” a book by Dean Yoost that looks at how directors should approach cyber, strategic, third-party, and other risks.

The RMA Journal June 2016 42

CREDIBLE CHALLENGE AND THE SEARCH FOR

EXCELLENCE

CREDITRISK

ANNUAL REPORT 2016 21

COMPENSATION MATTERS

Executive pay has long been in the spotlight for shareholders, boards, management teams, and commenta-tors alike. More recently, the connec-tion of executive pay outcomes with

company performance has taken center stage. It’s been a key focal point in the past, but today the pay-for-performance relationship carries a heightened sense of urgency and a greater de-gree of precision than ever before. It’s become a

balancing act across multiple stakeholders, from executives to the broader base of employees, to outside analysts, regulators, and investors.

External stakeholders — investors, regulators, proxy advisors — have the benefit of assessing the pay-for-performance relationship after the fact, when performance has already been de-livered and incentives already paid. Yet boards and management teams have the more difficult task of defining expectations and setting per-formance requirements (i.e., goals) at the outset of a performance period, such that those after-the-fact assessments hold true. Instead, why not allow for judgment after-the-fact for boards and management teams, as well? Not as an excuse for performance below expectations, but as a means of testing the expectations themselves — were they too hard, too soft, or just right . . . knowing what actually happened during the performance period?

Variability vs. visibilityToday, many companies face significant vari-ability, both in their end markets and in their operating models. Increasing variability dimin-ishes forward-looking visibility, and the task of

Board oversightof executive pay:A fresh approach We suggest a new way forward for board decision making on executive pay tied to company performance — building from the traditional budget-based goals, but also more directly acknowledging the increasing variability in management’s budgets.

By Casandra Rusti and Barry Sullivan

Casandra Rusti is an associate consultant and Barry Sullivan is a managing director with executive compensation consulting firm Semler Brossy (www.semlerbrossy.com).

Board oversight of executive pay: A fresh approachBy Barry Sullivan and Casandra Rusti, Semler Brossy

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LOS ANGELES / SAN FRANCISCO / CHICAGO

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August 2016

ACTIVISTS ARE NOW KNOCKING ON THE DOORS OF REITS For many years the REIT industry largely flew below the activist radar due to the complexities of the REIT corporate structure and tax treatment; the fact that REITs are required to pay out 90% of their taxable income in dividends; a widely utilized cap on the percentage of share ownership permitted without Board approval (usually around 10%); and the perception that Maryland, where many REITs are incorporated, is more deferential than other states toward Boards facing hostile action. However, now that REIT investment visibility is high and some REITs are trading below NAV, these historical constraints no longer discourage activists from targeting the sector. According to SharkRepellent.net, a corporate governance research firm, there were 26 REIT activist campaigns in 2015, compared to only six in 2011 and 12 in 2012. To date this year, there have been 13 REIT activist initiatives either announced and ongoing, or completed. Ashford Hospitality Trust, Ashford Hospitality Prime, New York REIT, and Monogram Residential Trust are among the more recent visible situations. Some of the prominent activists involved in recent REIT campaigns include Land & Buildings Investment Management, Rambleside Holdings, Snow Park Capital Partners, and Sessa Capital. REIT activists are focused on maximizing shareholder value, and the usual triggers are price/NAV imbalances and/or “lazy” balance sheets with excess liquidity. By and large activists are agitating for more aggressive share repurchases, a merger or acquisition, or faster asset dispositions. They are also focused on governance challenges such as claims of misalignment between Board/management and shareholder interests; egregious termination fees to an external advisor in the event of change-of-control; or unfair restrictions on shareholders initiating by-law amendments. As with most things in life, it is easier, more effective, and less costly to pre-empt an issue than to deal with its aftermath, and the same logic applies to activist attacks. The following are some top line ideas for both avoiding and preparing for a potential activist situation. Know where you stand. Prepare and maintain valuation analysis so you know how your company is performing relative to peers and how your go-forward guidance and metrics stack up. Read sell-side research with a focus on commentary related to valuation, performance, guidance/metrics, and capital allocation strategy, and watch for shifts in sell-side sentiment, ratings and price targets. Track research on your competitors to see how they are being viewed relative to your company. Listen closely to the questions investors ask at meetings and the feedback you receive following all investor engagements. If you don’t have a really solid handle on how your company is being viewed by the Street, now might be an opportune time to consider a perception survey conducted by a neutral third-party.

Your best offense is a good defense. Take your IR program up a notch. Step back to revisit your investment message platform; make sure your investment thesis and messaging are compelling and understandable; clearly communicate your sustainable competitive advantages; and, most importantly, convey how you are creating value and shareholder returns. Then make sure that these critical messages are consistently and prominently incorporated into all investor communications – investor presentations, earnings call scripts, shareholder letters, IR website, SEC filings and proxy statements.

Activists Are Now Knocking on the Doors of REITsArticle published by Moira Conlon, Financial Profiles, Inc.

Rose McKinney-James was featured by Savoy Magazine for her leadership in C3E Women in Energy, a project of Clean Energy Education & Empowerment (C3E) initiative, one of the crosscutting support initiatives within the Clean Energy Ministerial.

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