The Facts on Norma Provencio’s Tenure as a Director of Valeant Pharmaceuticals
December 15, 2015
- Bloomberg News has published an article examining Norma Provencio’s tenure on the Board of Directors of Signalife and Valeant. In connection with this inquiry, Valeant provided the following information to Bloomberg News:
Ms. Provencio was first elected, as a non-incumbent nominee, to Legacy Valeant’s board in 2007. More than 95% of the votes cast by shareholders with respect to her nomination were cast “for” Ms. Provencio’s election to the Legacy Valeant Board. In nominating Ms. Provencio, the Legacy Valeant Board, thorough its Corporate Governance/Nominating Committee, a customary background check and interview process was conducted.
Ms. Provencio was appointed chairperson of the Audit and Risk Committee of VPII (the current company, as surviving company of the 2010 Biovail-Legacy Valeant merger) in 2011. Ms. Provencio served as the Chairperson of the Finance and Audit Committee of VPI from May 2008 until the Biovail merger in September 2010. So, in addition to her accomplished professional background and qualifications, the Board had actual experience working with Ms. Provencio, as a director and as an audit committee chair, and obviously felt comfortable with entrusting her with as the Chairperson of VPII’s Audit and Risk Committee since 2011.
Ms. Provencio has many years of financial and industry experience that make her well qualified to serve on Valeant’s Board. Ms. Provencio has been a certified public accountant since 1981 and served as the audit partner on numerous public companies with complex accounting issues during her public accounting career. She has also lead numerous investigations for public and private companies and has been the forensic accountant for numerous special committees during her professional career.
The Board has determined that Ms. Provencio’s many years of sophisticated financial and industry specific experience at Provencio Advisory Services, Inc., KPMG LLP and Arthur Andersen, her service on the board and finance and audit committee of VPI, her wealth of knowledge in dealing with financial and accounting matters and the depth and breadth of her exposure to complex financial issues qualify her to be a member of the Board and the committees on which she sits.
Ms. Provencio’s directorship with Signalife was disclosed in Valeant’s proxy statement, in compliance with applicable SEC rules. Prior to 2010, the proxy rules required disclosure of then-current public company directorships. Accordingly, Valeant’s 2007 proxy disclosed Ms. Provencio’s directorship with Signalife. Beginning in 2010, the proxy disclosure rules introduced a 5-year look back, and accordingly, Valeant’s proxy statements filed in 2010, 2011, 2012 and 2013 disclosed Ms. Provencio’s previous directorship with Signalife.
The ad hoc committee was appointed by the Board of Directors to review allegations related to the company’s business relationship with Philidor and related matters, and consists entirely of independent directors.
The votes appointing Ms. Provencio to the ad hoc committee and as chairperson to of the ARC were unanimous. And at each election of directors since Ms. Provencio was appointed to the Legacy Valeant board in 2007, she received the overwhelming support of shareholders as demonstrated by the shareholder vote.
Mike Pearson commented, “Since I have known Norma Provencio, she has acted with integrity and displayed sound business judgment, and I believe that she is exceptionally well qualified to lead our Board’s Audit & Risk Committee.”
With respect to her tenure at Signalife, Ms. Provencio served as a member of the Board of Directors and chair of its Audit Committee from July 2005 to June 2007. She chose not stand for re-election to the board of directors of Signalife.
The only financial reporting matter that Ms. Provencio is specifically aware of that overlapped with her tenure on the Signalife board is a sale in September 2006 of $190,170 that was alleged to have not been a legitimate sale. With respect to that specific matter, the SEC complaint states that it was concealed from that company’s CFO, auditors, outside counsel and other officers.
Signalife engaged outside CPA firms to perform its accounting functions during Ms. Provencio’s tenure on the board. The CPA firms included Robert C. Scherne, CPA, PC and Pickard & Green. Both CPA firms provided accounting and other management consulting services for small companies, including preparing required SEC filings for public companies.
Ms. Provencio has followed the criminal case against Mr. Stein and believes that the matter was handled appropriately.