Simpson’s appointment follows the appointments of Anne Sausboll as chief executive in December and Joseph Dear as chief investment officer just a week ago. Sausboll, the first female CEO to lead the 77-year-old pension fund, replaced Ken Marzion who served as interim CEO since theretirement in June of Fred Buenrostro.

Simpson served most recently as the executive director of the International Corporate Governance Network (ICGN), which represents investors responsible for $15 trillion in global assets.“In Anne Simpson, we are getting one of the world’s most influential investor activists,” said George Diehr, chair of the CalPERS Investment Committee. “She is widely recognized in the global corporate governance community, which knows her for her many appearances before political, policy and regulatory bodies.”

As first executive director of ICGN, Simpson doubled its size and stepped up its role in policy advocacy and best practice development before such forums as the International Accounting Standards Board, the U.S. Securities and Exchange Commission, the U.S. Senate Banking Committee, the United Kingdom’s Financial Services Authority and the Chinese Securities Regulatory Commission.

With CalPERS, she will oversee the Focus List program, which involves monitoring portfolio companies’ performance related to finance, corporate governance practices and CalPERS strategic issues. Simpson also will help CalPERS respond to ongoing market reform issues before U.S. policymakers and regulators.

“This is a real opportunity for governance,” said Peter Montagnon, ICGN chairman in a statement. “The ICGN has campaigned vigorously for shareholder rights. In particular, we have sought an ability to appoint and dismiss directors in the U.S. and to have a say on remuneration.”

The group represents investors holding approximately $15 trillion in assets.

The ICGN believes that stronger shareholder rights will make boards more accountable for the longer term consequences of their actions. With the increased rights, the ICGN notes there is the need for responsible behavior by shareholders. By being responsible, the ICGN believes that such care and consideration will validate the increase in shareholder rights.

The ICGN also named four main elements that apply to the internal governance of those involved in the investment chain:

• Oversight  Governing bodies should have a structure and constitutions; voting decisions should be made in the interest of the beneficiaries and must not reflect other objectives of those involved.

• Transparency and accountability  Regular disclosure to ultimate beneficiaries about material aspects of governance and organization; governing bodies should be critical in the selection of consultants.

• Conflicts of interest  Those acting as agents should disclose all known potential conflicts of interest to principles and explain how these are dealt with.

• Expertise Decision makers should have adequate experience and skill.

The ICGN will further debate its statement at the ICGN’s conference in Wilmington, Del., on December 10th. The event will examine the future of capital markets after the credit crisis.

Wall Street executives like Peter Kraus, a top executive at Merrill Lynch, who last month accepted a takeover offer from Bank of America, is likely to leave with more than $10 million in compensation, The Wall Street Journal reported. A Merrill spokesperson said that the government did not include Kraus’ job as it wasn’t among the company’s top-five jobs.

Countries are moving to curb executive pay at companies with or without government rescues.

• AUSTRALIA: Prime minister seeking executive-pay rules for finance firms to discourage excessive risk-taking; he will then propose the rules to the international community.

• FRANCE: Business leaders adopted code of conduct that prevents ‘golden parachute’ exit payments for failed executives.

• GERMANY: Compensation for top executives at banks tapping government bailout funds capped at €500,000; bonuses, stock options and severance barred.

• NETHERLANDS: Top executives of ING Groep NV agreed to give up 2008 bonuses and limit severance if dismissed in exchange for government financial injection.

• SWEDEN: Participating banks in proposed bailout must agree with government to limit compensation for ‘key executives.’

• SWITZERLAND: UBS AG agreed as part of recapitalization to use international best practices for executive pay and government monitoring. U.S.: Limits on corporate-tax deductions on executive pay and ‘golden parachutes.’ Firms also must recover awards based on inaccurate results and bar incentives for ‘unnecessary and excessive risks.’

• U.K.: Government is taking board seats at two big banks, permitting more oversight of pay practices; regulator wants investment banks to drop pay practices that may have encouraged risk-taking.

Source: WSJ reporting

Stephen Davis, a senior fellow at Yale University School of Management’s Millstein Center for Corporate Governance and Performance and editor of Global Proxy Watch, told the WSJ that governments need to impose pay limits “to get popular buy-in for these bailouts.”

Of the most restrictive programs, Germany is near the top. In addition to salary limits for top executives, it also prohibits bonuses, stock-option grants, severance payments, and option exercises at banks drawing government funds during the bailout program which will last through 2012.

The U.S. is less severe and holds a middle ground. For the five top executives at participating companies, the Treasury Department is limiting corporate-tax deductions on executive pay and golden parachute payments for departing executives. Some companies will be required to recover awards to executives that were made based on inaccurate results. Incentives that promote executives to take “unnecessary and excessive risks” will also be removed.

Despite these changes, critics are unsure whether this will successfully curb executive compensation. Anne Simpson, executive director of the International Corporate Governance Network, a London network representing more than 500 institutional investors in 40 countries, believes that government pay curbs “might throw some sand in the cogs.” She believes that the problem that will not be fixed is the lack of accountability of corporate boards.

“Why would anyone who is an A player want to come into an institution with all kinds of [pay] restrictions?” asked Thomas Neff, chairman of U.S. operations at Spencer Stuart, an executive-search firm in New York, toWSJ.

The increasing restrictions on executive pay could result in the number of finance professionals seeking work in developing countries without banking bailouts.

The UK’s Shareholder Executive was opened in 2003 as a model to guide the government’s performance as a shareowner. According to GPW, its expanding portfolio of 29 companies range from British Energy to Northern Rock. The agency advises UK officials on topics ranging from governance and strategy to board appointments and remuneration.

The UK Treasury has built this model into its bailout plan. As a result, rules for banks it’s buying into and tasks such as appointing independent non-executive directors and forming dividend policies are built into the model.

U.S. Treasury Secretary Henry Paulson has noted that while stock purchases have been a welcomed action, the plan he announced on Tuesday gives the government limited rights to vote shares or appoint directors.

The question has come up before. Sovereign wealth funds in Asia and the Middle East, which took large stakes in some of the financial sector’s largest firms, have been watched closely for signs of how active or passive they will be as owners and whether or not they would ever put national interests ahead of their interest as shareholders.

The International Corporate Governance Network’s March statement called on state shareowners (sovereign wealth funds etc.) to secure value through responsible approaches to share ownership, including communication between investee companies on strategy and governance and considered voting at general meetings, according to GPW.

The bottomline: empower state owners without muddling the process with politics.

The project will run tandem to a commission the CII agreed to form with the CFA Institute. Expect leading CII funds to advocate for at least three market-wide changes: easier shareowner rights to nominate corporate directors (”access”), say-on-pay votes to align CEO pay with performance, and a swift end to broker voting, which can skew ballot outcomes, according to GPW.

The voice of the shareowner hasn’t been heard much in the scrum over how to rescue U.S. financial markets. That’s partly because investors as a group hve never developed heavyweight political clout. It’s also because the CII,, the chief shareowner group in the U.S., is a jigsaw of corporate, labor, and civil pension funds that don’t always agree with each other. But the crisis has galvanized the CII into action.

At its semi-annual meeting in Chicago, some council members also proposed issuing an urgent collective letter on the financial bailout to ensure that the shareowner perspective forms part of political and regulatory agendas in Washington.

Large funds such as the California Public Employees’ Retirement System (CalPERS) are planning to coordinate its own separate efforts.

The CII also took its first major steps to globalize. Its international committee decided in Chicago to build website profiles of issues, groups, and contacts in major markets as a resource for CII meetings. And it is considering a formal liaison with the International Corporate Governance Network, which the CII helped to create 14 years ago.

Eventually, the CII may engage individual companies in other markets on governance failures, as it does at home. The international panel is headed by Florida State Board of Administration Mike McCauley and Sara Lee general counsel Margaret “Peggy” Foran.

The announcement was made last night at the Changgyeong Palace in Seoul last week where the investor-oriented group is hosting its annual conference.

Minow, one of America’s most recognized corporate governance advocates, is the former president of ISS (now RiskMetrics Group). She founded The Corporate Library in Portland, Maine, with Robert A.G. Monks in 1999 with whom she has also co-authored three business books including the soon-to-be released next edition of the MBA textbook, Corporate Governance.

Minow was named to the inaugural list of the Directorship 100 which noted “the queen of good corporate governance” is known for “her pointed criticism of corporate boards that allow, in her view, CEOs to operate without oversight.”

]]> http://www.directorship.com/corporate-librarys-minow-hailed-by-icgn/feed/ 0 http://www.directorship.com/yale-fetes-rising-stars-of-governance/ http://www.directorship.com/yale-fetes-rising-stars-of-governance/#comments Thu, 01 Jan 1970 00:00:00 +0000 Joseph McCafferty http://www.directorship.com/?p=2330 The Millstein Center’s first list of rising stars recognizes corporate governance professionals under the age of 40 who, nominated by their peers and chosen by a committee, have made “their mark as outstanding analysts, experts, activists, and managers.”

“This is the first year we are recognizing the next generation of corporate governance leaders,” said Ira M. Millstein, senior associate dean for corporate governance at the Yale School of Management and an architect of corporate governance recognized last fall by Directorship magazine in its Directorship 100, an inaugural list of the most influential players in corporate governance. “Every one of this year’s 56 recipients is a rising star in his or her own right. I’m honored to be able to recognize them in this way,” Millstein said.

The rising stars of corporate governance are:

• Sanaa Abouzaid, corporate governance officer, International Finance Corp.
• Tagbo Agbazue, project coordinator, African Institute of Corporate Citizenship
• Steve Alogna, senior manager, corporate governance services, Deloitte & Touche
• Annalisa Barrett, senior research associate, The Corporate Library
• Rachel Beck, business columnist, Associated Press
• Sagarika Chatterjee, senior analyst, F&C Investments (London)
• Warren Chen, managing director, M&A and quantitative analyst, Glass, Lewis & Co.
• Patrick Daniels, partner, Coughlin Stoia Geller Rudman & Robbins
• Andy Eggers, president, Proxy Democracy
• Maureen Errity, firm director, Center for Corporate Governance, Deloitte & Touche
• Todd Fernandez, senior research analyst, Glass, Lewis & Co.
• Jun Frank, senior research analyst (Asia), Glass, Lewis & Co. 
• Nichol Garzon-Mitchell, deputy general counsel, Glass, Lewis & Co.
• Rebecca Grapsas, associate, corporate department, Weil, Gotshal & Manges
• Dan Heitger, associate professor of accounting and co-director of the Center for Business Excellence, Miami University
• Alexandra Higgins, research associate, The Corporate Library
• Quinton Huckeby, analyst, Proxy Governance
• Catherine Jackson, manager, corporate governance and proxy voting, Ontario Teachers’ Pension Plan
• Fianna Jesover, senior policy manager, corporate governance, Organisation for Economic Co-operation and Development
• Bess Joffe, associate director, corporate governance, Hermes Equity Ownership Services
• Jan-Friedrich Kallmorgen, director, Europaische Investorenshutzvereinigung
• John Keenan, senior analyst, pension and benefits policy, AFSCME
• Matt Kelly, editor-in-chief, Compliance Week
• Dan Konigsburg, director of corporate governance, Standard & Poor’s Equity Research
• Claudia Kruse, vice president European Environmental, Social and Governance Research, JPMorgan (London)
• Rakhi Kumar, corporate governance policy analyst, The Institute of International Finance
• Laura Lonsdale, ombudsman, Tyco International
• Allie Monaco, vice president of research, Proxy Governance
• Michael McCauley, senior corporate governance officer, Florida State Board of Administration
• Mary Jane McQuillen, director, socially aware investment, ClearBridge Advisors
• Jason Mefford, vice president, business process assurance, Ventura Foods
• Jeffrey B. Miller, chief compliance officer and counsel, Synthes
• Matt Orsagh, CFA, CIPM, senior policy analyst, CFA Institute Centre for Financial Market Integrity
• Rajesh Parthasarathy, president and CEO, MENTISoftware
• Dan Pedrotty, director of the office of investment, AFL-CIO
• Christian Plath, assistant vice president, corporate governance, Moody’s Investor Services
• Michael Pryce-Jones, senior analyst, Proxy Governance
• Naheeda Rashid, corporate governance and engagement, Hermes Equity Ownership Services
• Tracey Rembert, senior governance analyst, Service Employees International Union
• Joel Rogers, director of consulting services, RedHawk Communications
• Nicole Sandford, partner, board advisory services practice, Deloitte & Touche
• Hege Sjo, European Governance and Engagement, Hermes Equity Ownership Services
• Phillip Spathis, executive officer, governance and engagement, Australian Council of Superannuation Investors
• Alan Srulowitz, vice president, internal controls, CA, Inc.
• Tracy Stewart , corporate governance manager, Florida State Board of Administration
• Scott Stokes, deputy research director, GovernanceMetrics International
• Daniel Summerfield, co-head of responsibleinvestment, Universities Superannuation Scheme
• José Tabuena, vice president integrity and compliance/corporate secretary, MedicalEdge Healthcare Group
• Peter Taylor, head of corporate governance, Aberdeen Asset Management
• Meagan Thompson-Mann, president, MCTM Governance
• Carla Topino, senior research analyst (Europe), Glass, Lewis & Co.
• Dan Wadsworth, senior director of corporate client group, NASDAQ Board Tools
• Kerrie Waring, COO, International Corporate Governance Network
• Mark Watson, partner, Tapestry Networks
• Brittany Wedereit, vice president, proxy research, Glass, Lewis & Co.
• Clarence Yang, associate, Barclays Global Investors

The selected stars were recognized earlier this week during a reception at the 2008 Yale Governance Forum hosted by the Millstein Center.