SkillSoft updates its corporate governance policy in settlement
E-learning content firm SkillSoft (Nashua, N.H.) has recently updated its corporate governance policy as a result of the September settlement of a 2002 shareholder class action lawsuit, including changes aimed at ensuring the independence of its board of directors and providing greater oversight of its accounting practices.
The updated policy requires two-thirds of the board to be comprised of outside directors. Of the current seven members of SkillSoft’s board, only president and CEO Chuck Moran and chief strategy officer Greg Priest are inside directors.
Another change requires all board committees, including compensation, audit and nominating committees, to be comprised solely of outside directors.
In another section, the audit committee is required to replace SkillSoft’s independent auditor every five years, unless the committee determines it is in the company’s best interest to retain them. A related shareholder action against the Irish and U.S. arms of SkillSoft auditor Ernst & Young LLC is continuing.
Also, SkillSoft is prohibited from hiring as a director any partner or senior manager of the company’s external auditor within two years of his or her performance of audit services. Current board member William Meagher is a former managing partner of Arthur Andersen LLP, SkillSoft’s former auditor.
Among other changes to the policy, the audit committee must meet with the auditor independent of management prior to the filing of quarterly and annual SEC reports, and the nominating and corporate governance committee must consider director candidates proposed by shareholder groups representing at least a 5% stake in SkillSoft.
The lawsuit was a consolidation of actions filed by shareholders in October 2002, after SkillSoft announced it was restating financial results for merger partner SmartForce for the years 1999, 2000, 2001 and part of 2002. It accused Priest, former SmartForce president and CEO, and SmartForce founder and former chairman William McCabe of intentionally withholding material financial information that caused its share price to be artificially inflated.
SmartForce, which had fallen from its position as the world’s largest e-learning firm, merged with SkillSoft in September 2002. In settling the lawsuit, SkillSoft also agreed to pay $30.5 million, but admitted no wrongdoing.
Performance Of Public Training Company Stocks, Oct. 8-22
Close On Close On
Company Ticker Oct. 8 Oct. 22
iLinc * ILC $0.48 $0.58
Franklin Covey ** FC $1.74 $1.95
Centra CTRA $1.47 $1.61
SumTotal Systems SUMT $5.30 $5.33
SkillSoft SKIL $6.78 $6.55
Learning Tree Int’l LTRE $13.81 $13.15
New Horizons NEWH $3.52 $3.17
WebEx WEBX $23.70 $21.28
Saba SABA $4.08 $3.58
ProsoftTraining POSO $0.38 $0.31
Average For ILT Firms $4.86 $4.65
Average For E-Learning Firms $6.97 $6.49
Average For Group $6.13 $5.75
NASDAQ Nat’l Mkt. Composite Index $1,919.97 $1,915.14
Price Percent YTD
Company Change Change Change
iLinc * $0.10 20.8% -31.8%
Franklin Covey ** $0.21 12.1% -29.9%
Centra $0.14 9.5% -59.1%
SumTotal Systems $0.03 0.6% -34.9%
SkillSoft -$0.23 -3.4% -21.8%
Learning Tree Int’l -$0.66 -4.8% -25.6%
New Horizons -$0.35 -9.9% -43.4%
WebEx -$2.42 -10.2% 4.7%
Saba -$0.50 -12.3% 1.1%
ProsoftTraining -$0.07 -18.4% -43.6%
Average For ILT Firms -$0.22 -4.5% -44.4%
Average For E-Learning Firms -$0.48 -6.9% 1.3%
Average For Group -$0.37 -6.1% -10.5%
NASDAQ Nat’l Mkt. Composite Index N/A -0.3% -4.6%
* Listed on the American Stock Exchange
** Listed on the New York Stock Exchange
Source: Yahoo Finance, Simba Information. Copying prohibited.
SkillSoft: (877) 631-7405; www.skillsoft.com
COPYRIGHT 2004 RR Bowker
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