By: Lucia Moses
Updated at 5 p.m. Eastern Standard Time
The New York Times Co. has tightened its corporate-governance practices, citing the Sarbanes-Oxley Act, proposed New York Stock Exchange rules, and its “vision of good governance practices.”
While not required to do so because of its dual-class ownership structure, the Times Co. began requiring that a majority of its directors and all members of certain committees be independent.
As a result, nonindependent members Chairman Arthur O. Sulzberger Jr. and sister Cathy J. Sulzberger left the nominating and governance committee.
Also going beyond legal requirements, the company applied its new ethics code to the chairman and vice chairman.
Last July, Congress adopted and President Bush signed into law the sweeping legislation designed to ensure high standards for corporate executives, boards of directors, accountants, and lawyers, following several high-profile corporate scandals.
The New York Times Co. said a board member will be considered independent if sales between the publisher and the director’s business total less than 1% of revenues of either company.
A similar standard will be applied to charitable contributions from the Times Co. to organizations in which a director serves as officer.
Under the new guidelines, the Times Co. determined that eight of its 13 directors are independent.
The company’s board took other steps to improve corporate governance. It ruled that all directors are expected to hold stock in the company, with $100,000 in stock considered appropriate. It also enhanced the annual process for evaluating the performance of the company’s chairman, chief executive, and vice chairman.
Shares of New York Times Co. closed Thursday at $45.35, down 33 cents, or 0.7%, on the New York Stock Exchange.