What we also discovered in putting the list together was that in some instances, it became impossible to separate the captain from the team. This year’s D100 is a case in point: Our editors and board of advisors were nearly unanimous in our selection of President Barack Obama as this year’s most powerful corporate governance influence. And yet, to do justice to the seismic shift his policies have brought about in the boardroom, we also had to recognize the many other  “New Voices” in the Administration who are now leading the greatest financial reform of American business since the 1930s.

So, we ask that in the pages ahead you pay more attention to who counts, and less to how we count, in arriving at our final selection of individuals and institutions that have met the requirement to be “most influential.” We think you’ll agree it’s an intricate and impressive mosaic where the whole equals much more than the sum of its parts, which may or may not be greater than 100.

Regulators & Rulemakers

Team Obama
It is often written that reasonable people may disagree, and with Americans and their Presidents, it is practically a way of life. But even an unreasonable person could only conclude that this President and his Administration are having a profound and lasting influence over the boardroom. President Barack Obama has demonstrated an enormous capacity for calm in uncertain times. His relative youth leads to frequent comparisons to John F. Kennedy and his communications skills to those of Ronald Reagan. But it is his aggressive response to the unparalleled economic challenges that greeted him at the dawn of his young presidency that harkens back to an earlier figure of towering influence,  Franklin D. Roosevelt.

FDR’s massive social and financial reform programs—the creation of Social Security as part of the New Deal, the establishment of the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Company (FDIC)—helped restore confidence in the nation’s banking system coming out of the Great Depression. One could plausibly take major portions of FDR’s New Deal and substitute his name with President Obama’s.  The implementation of the $787-billion American Economic Recovery Act one month after Obama took office, coupled with his handling of the Troubled Asset Relief Program (TARP), which sought to strengthen the financial sector by buying up the assets and equity from troubled banks, has clearly helped the nation avoid further financial disaster and put the economy on the path to recovery.

And finally, turning again to the FDR playbook, Obama assembled a team of wise men and women, formidable economic and business minds, whose decisions are having a lasting effect on the role of the corporate director. Preeminent among them was the choice of Rahm Emanuel as chief of staff. Described as a veritable “influence machine,” within the Administration and Congress, the former Congressman from Obama’s home state of Illinois is known as a hard-charging, brutally candid, sometimes combative, acutely intelligent man who can get things done and knows the ways of the Capitol and the boardroom.

The Enforcers
Perhaps second only to Obama in terms of her influence on boards and corporate governance, career regulator Mary Schapiro heads up the 75-year-old SEC. Before the crisis, the agency’s very existence was in question: “Obsolete,” “out of touch,” and “behind the times” were just some of the many terms uttered by detractors. The Commission, under former chairman Christopher Cox, was pilloried for missing the Madoff scandal.

As former SEC chairman and Directorship 100 Hall of Famer, Arthur Levitt described her: “She has the skills, the intellect, and the character to be a superb SEC chair.” But Schapiro will face a new kind of challenge in the role, not just that of proving her own qualifications, but also instituting a significant remodeling of the SEC itself, as she works to bring it into the new regulatory era.

Moving swiftly to address regulatory concerns in the wake of the financial crisis, the SEC has rolled out a series of proposals that could embody the biggest change to the rules of the game for directors in some time. Schapiro, who is no stranger to the boardroom, having served on the boards of Duke Energy and Kraft Foods, has overseen proposed rule changes on proxy access, broker voting, say on pay, and new requirements for disclosure on executive compensation and director qualifications. It’s now up to her and fellow commissioners Kathleen Casey, Elisse Walter, Luis Aguilar, and Troy Paredes to determine the final regulations that emerge from the proposals.

Other key players Schapiro has brought into the SEC include Senior Advisor Kayla Gillan, Chief Accountant James Kroeker, and Director of Enforcement Robert Khuzami. Gillan was a founding board member of the Public Company Accounting Oversight Board (PCAOB) and former general counsel to CalPERS. Kroeker joined the SEC as deputy chief accountant in 2007 from Deloitte and Touche where he had been a partner in the firm’s national accounting services group. Kroeker recently said that the proposed road map for the convergence of International Financial Reporting Standards,pushed to the back burner amid the larger issues of market reform, would be restored as another top priority. Khuzami is a former federal prosecutor, has pledged to improve the SEC’s enforcement performance by creating specialized units to provide “structure and resources for staff to ‘get smart’ about certain products, markets, regulatory regimes, practices and transactions.”

TARP Overseers
Another example of Obama’s preference for brains over politics was his reappointment of Sheila Bair to chair the FDIC. Another fiscally conservative Republican, on Bair’s watch alone this year, 94 banks have failed, creating a new challenge:  how to replenish the fund. Bair has also been an integral part of the team overseeing TARP. Neil Barofsky is a former New York assistant attorney general confirmed by the Senate in December as special inspector general. Dubbed the “TARP Cop,” his job is to figure out how and where the $700-billion TARP funds are spent, reporting directly to the President and providing updates to the Congressional Oversight Panel chaired by bankruptcy expert and Harvard Law School professor, Elizabeth Warren. COP’s first report, released in February, casti-  gated then-Treasury Secretary Henry Paulson for his performance and lack of transparency, reporting that the Treasury Department  had overpaid by $78 billion for the assets it bought from banks.

Interestingly, while Obama sponsored and was a strong proponent of  “say on pay” legislation while a senator, since appointing Kenneth Feinberg special master of compensation, he has appeared unwilling to make the issue a top priority. Feinberg, who has immersed himself in some of the country’s most troublesome and high-profile cases, is considered a superb choice, both in terms of skill and temperament, by Capitol Hill insiders. His most noteworthy case was the 33 months of pro-bono work he did following the 2001 terrorist attacks to determine how much each victim would receive from the federal government’s September 11th Victim Compensation Fund.

Feinberg may in fact be perfectly suited for a job that most compensation specialists see as thankless, and possibly as a “no win” situation. As the Obama Administration’s comp expert, Feinberg was called on to monitor the compensation of executives in what were once some of America’s most prestigious corporations, now TARP recipients, including American International Group (AIG), Bank of America, Citibank, Chrysler, GMAC, and General Motors.

Fed to the Rescue
To prevent American capitalism from spiraling deeper into the abyss, nine months after President Obama made his first Cabinet announcement, he re-nominated Ben Bernanke as Federal Reserve chairman. The former Princeton economics professor was selected by Bush in 2005 to succeed Alan Greenspan. In 2008 after the market crashed, Bernanke invoked emergency powers, slashed interest rates, and spent trillions of dollars to right the financial system. Just last month, he declared the recession “likely over.” Though he seldom gives interviews, Bernanke is never far from the public eye and has been a stalwart in the transition between presidential administrations and in the effort to stem the economic slide.

When then President-elect Obama named his economics team, it included players who, like Bernanke, were already steeped in the crisis details, demonstrated a studied understanding of Depression-era economics, or some combination of both. Enter Treasury Secretary Timothy Geithner and Chief White House Economic Advisor Lawrence H. Summers. Geithner, who is currently pushing legislation to provide more systematic regulation of financial institutions, including new limits on executive compensation, recently told one interviewer that he is optimistic major reforms will be passed.

Prior to his appointment replacing Henry Paulson, Geithner was president of the Federal Reserve Bank of New York and part of the team central to the critical negotiations that resulted in Bear Stearns being tucked into JPMorgan Chase, Merrill Lynch going to Bank of America, Lehman Bros. disappearing, and Citigroup and other struggling banks getting a lifeline.

Summers, the former Harvard University economist who became its president following his tenure as Treasury Secretary to President Clinton, is director of the Cabinet’s National Economic Council. The group was established in 1993 to coordinate and ensure that the President’s economic policy agenda is carried out.

Rounding out the team, Paul Volcker, the former Fed chief under Clinton, was selected to chair the president’s economic recovery advisory board. And Christina Romer, a former UC Berkeley economist, who administration sources suggest is well- regarded by both parties, chairs the Council of Economic Advisers. Her appointment was seen as a further triumph of brain over politics in Obama’s approach to talent recruitment.

The shareholder activist group, the Sisters of St. Dominic, had previously sent proposals to both Exxon and industry peer Chevron, but withdrew the Chevron proposal yesterday.

“Basically these companies are night and day in terms of the distinctions on how they are handling and preparing for the future,” said Patricia Daly, who represents the Sisters.

Exxon has announced plans to improve its energy efficiency through changing its operations, but has come short of changing its product offerings. Exxon advised its investors to vote against the minority proposal made by the Sisters.

Skyrocketing summer oil prices were responsible for profits throughout the oil industry, with oil peaking at $147/barrel in July. Even when oil subsequently nosedived to sub-$40/barrel levels, the industry still retained record profits for the year.

Bloomberg reported that the combined revenues of Exxon Mobil and competitor Chevron surpassed the gross domestic product of all but 16 of the world’ nations.

Exxon’s Q4 profits of $7.82 billion were less than a third of last year’s profits during the same quarter.

Under the changes, a presiding director is selected by non-employee directors from among their members and would generally be expected to serve a minimum term of two years, according to a MarketWatch report.

“The board recognizes that corporate governance is of broad interest and has received input from a wide array of shareholders through the company’s ongoing engagement and dialogue efforts,” said Exxon CEO Tex W. Tillerson in a statement.

The presiding director has the authority to call and chair executive sessions of non-employee directors and chair all board meetings in the absence of the chairman. The presiding director will also review board meeting topics, agendas, and schedules with the chairman prior to distribution to the board, which currently is comprised of one employee and 10 non-employee members.

Exxon Mobile this week sent a new round of emails to its shareholders urging them to oppose an independent chairman. Rex Tillerson currently holds both the CEO and chairman positions.

However, the decision to split the chairman and CEO position is not the only issue Exxon is lobbying shareholders to reject. The oil company has also asked shareholders to vote against a proposal which gives investors more input on how much the top management is paid.

Exxon says that the email was sent out in response to the media articles, according to The Wall Street Journal. In making its case in its annual proxy statement, Exxon said it believes there is “no one-size-fits-all model of corporate governance”  and its board believes it is in the company’s best interest for Tillerson to continue serving as both chairman and CEO. 

]]> http://www.directorship.com/exxon-to-shareholders-just-say-no/feed/ 0 http://www.directorship.com/rockefellers-want-change-at-exxon/ http://www.directorship.com/rockefellers-want-change-at-exxon/#comments Thu, 01 Jan 1970 00:00:00 +0000 Joseph McCafferty http://www.directorship.com/?p=2406 An independent chairman and a greater role for the board of directors at Exxon Mobil are among the changes being sought by the Rockefeller family, the longest continuous shareholder in the oil company.

Descendents of oil baron John D. Rockefeller have scheduled a press conference for tomorrow in New York, according to a report in the Financial Times. 

Family shareholders are concerned about the oil company’s direction underChief Executive Rex Tillerson and support a bid to split hisjob, and name an independent chairman to the board. They have sponsoredfour shareholder proposals this year that raise a range ofconcerns about Tillerson’s failure to address the future ofenergy and related industry hurdles, they said.

The family is also pushing for a bigger role for Exxon’sboard of directors. The family’s stake in the company was notimmediately known, according to a spokesman.

Rockefeller founded the Standard Oil Co in 1870, which wasa precursor to Exxon Mobil. Exxon Mobil is the world’s largestpublicly traded oil company based on market capitalization.

“The board believes that the most effective leadershipstructure for Exxon Mobil Corporation at the present time isfor Mr. Tillerson to serve as both Chairman and CEO,” Exxonsaid in response to the proposal for an independent director inits annual proxy statement.

]]> http://www.directorship.com/rockefellers-want-change-at-exxon/feed/ 0 http://www.directorship.com/wal-mart-tops-fortune-500/ http://www.directorship.com/wal-mart-tops-fortune-500/#comments Thu, 01 Jan 1970 00:00:00 +0000 Joseph McCafferty http://www.directorship.com/?p=3893 The giant retail company Wal-Mart has topped the chart on the Fortune 500 list for the second year in a row. Despite the slow economy, or perhaps because of it, Wal-Mart continued to attract shoppers with it’s low-price strategy. Though it has slowed its expansion recently, it still reigns as the largest company in the United States by revenues. 

Exxon Mobil was second and oil group Chevron third on the list. The other top ten companies in order were Conoco Phillips, General Electric, Ford Motor, Citi Group, Bank of America, and AT&T.

While Wal-Mart is the biggest, Exxon Mobil stood as the most profitable company for the fifth year on the Fortune list, good news for its shareholders. GE came in as the second most profitable corporation on the list.

The biggest mover on the list was the new ranking of AT&T. The company was ranked 27 on the list last year, but jumped to the 10th spot this year.Size isn’t always a plus however. As Directorship found, sometimes size can make companies vulnerable to concerted attacks by activists, regulators, and the media. (See “The Perils of Being Number One.”)

Advisory or “precatory” proposals aren’t binding on companies, but they are a popular vehicle for shareholders to express their views on issues from climate change to executive compensation.

The Free Enterprise Action Fund (FEAOX) in Bethesda, Md., is seeking to close off that option and has filed proposals with Exxon Mobil and Schwab targeting what it calls “nuisance shareholders.”

Specifically, the fund wants shareholders at both companies to vote this year on amending the companies’ bylaws to preclude shareholders from offering non- binding proposals in the future.

“Shareholder proposals have simply become a way to harass companies,” said Steven Milloy, co-head of the $11.5 million FEAOX.

Labor unions, environmental groups and socially conscious investors supply the vast majority of non-binding shareholder proposals, and “we don’t consider them real shareholders,” Milloy told Dow Jones Newswires. “They just use these proposals to gain influence over the companies. We’d like to see that stuff go away.”

Exxon Mobil faces dozens of “nuisance” proposals from shareholders each year, said Milloy. He added that Schwab has been “besieged” by labor unions because the online brokerage firm’s chief executive, Charles Schwab, supported the Bush administration’s call for Social Security reform.

Companies ought to close the door on “nuisance” shareholders now, because if a Democrat is elected president, it all but ensures the Securities and Exchange Commission will favor increasing shareholders rights, not decreasing them, Milloy asserted.