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I'm with Marty Lipton a partner at Wachtel Lipton Rosen & Katz at the deal economy 2016 event Marty thanks for joining us well I'm delighted to be here David on your panel this morning you talked about corporate governance traditionally the board's role had been viewed as hiring a CEO and then letting that CEO run the company is that still the contemporary view of corporate governance well it's still the view that one of the most important functions of the board of directors is to hire the CEO and to be comfortable with a succession plan in case that CEO can no longer serve but I think it's fair to say that there are close to 20 other major things that are now looked on as something that the board of directors should be paying close attention to they range from cybersecurity risk management to how to deal with activist hedge funds how to engage with the major institutional investors how to look at the world economy how to be sure that the board has all of the background information that is necessary for the board to fulfill those functions each year December I sent out a memo to our clients call thoughts for directors this year it'll be thoughts for directors in 2016 and I think there are 18 items that boards you know looked upon today by institutional investors to be responsible for so it's not just succession it's pretty much every major aspect of the business either in a monitoring role to be sure of compliance or in an advisory role to new health management cope with the world economy and all of the myriad regulations that companies have to deal with today you recently worked on a paper for the Business Council of the World Economic Forum that sets out a new paradigm for corporate governance could you describe that paradigm for yes a paradigm is that and perhaps I can best describe it as it used to be that corporate governance was really a question of how the board functioned and over the last thirty years it evolved into the shareholders gaining the upper hand total control over the board we move from direct eccentric governance to shareholder centric governance you know that obviously is a product of about 80 percent of the voting power of most of the major public companies being in the hands of institutional investors so pretty easy for shareholder voting power to be concentrated with respect to any company now at the same time that we evolved into this institutional control situation we also evolved a phenomenon that we call activist hedge funds who today control about 200 billion of cap for them to invest in activist situations and those activists hedge funds have essentially been the product of outsourcing by the institution this is in other words institutional investors are not doing their own governance of their own supervision of their portfolio companies what they've done is outsourced first to ISS and glass lewis and second to these activists hedge funds what what I said in in the paper you for referred to is that this is resulted in a focus on the short term and not the long term and that's been going on during this entire period and generally not something that gripped the attention of the institutions suddenly more and more studies are being made to show that the result of this short term pressure is to penalize long term investment in companies and long term increase in value which as the result of penalizing the performance of the portfolio's of the institution's so institutions are now beginning to recognize that they should bring governance in-house rather than outsourced to advisors like ISS or to activist hedge funds and it's my hope that this new paradigm of governance will lead to less pressure on companies for quarterly performance less activist hedge fund attacks on companies and an opportunity for companies to focus on the long term long term investment long term increase in the value of their securities Marty thanks for joining us well it's been my pleasure to join you David it's always a pleasure you