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Predictions: Corporate Governance, Director Disclosure Top Business Priorities

Investor-board relations may change with director disclosures.

The Dodd-Frank Wall Street Reform and Consumer Protection Act promises to radically transform many business processes in the financial sector and other industries. Disclosure rules will be one thing to change, as Alex Lee, of Business Law Currents, writes in a contribution to the Reuters blog.

Lee points to the board-investor relationship, noting that disclosure to shareholders is important and required for any directorships (not only the current ones) that were held over the past five years.

"The impact of these rules is that investors will be in a much better position to assess the relevant bearing of a nominee/director's previous experience, put on display other nominee/director business commitments, and provide insight on what commercial and professional connections could potentially lead to conflicts of interest," Lee writes.

Additionally, companies will need to justify their board structuring - such as the decision to keep separate or to unify the jobs of chairperson and chief executive.

Shareholders are raising their voices regarding other board issues as well. A recent report from the American Accounting Association found that while the cost of an audit typically increased when investors had a say in what third-party auditing firm was selected, the results also tended to be of higher quality.

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