WASHINGTON, July 12, 2012 /PRNewswire/ -- Ralph Whitworth, Founder and Principal of Relational Investors LLC, delivered the opening keynote address today at the Society of Corporate Secretaries and Governance Professionals 66th annual conference. Relational Investors is a $6 billion private investment fund that seeks to invest in undervalued companies, using engagement strategies to unlock value.
Whitworth opened with a lively discussion on boards, stating that process drives substance in the case of board composition. He stressed that shareowners must have a mechanism to be more involved in the process. As to what makes a "good director" he said it should be "somebody likable" but somebody who is not in the boardroom "to be liked," which he acknowledged is a very tall order. Similarly, the dynamic which makes directors speak up is crucial, but difficult to achieve in his experience.
Whitworth also noted what's to come on executive compensation. He believes that this is the area where owners and managers have the greatest conflict. According to Whitworth, executive compensation research in the future will be focused more on performance hurdles, and he believes that more emphasis should be placed on return metrics such as ROIC, than growth, which can lead to anomalies.
Finally, in response to a question about executive compensation disclosure, "more is better" according to Whitworth, and he urged boards and companies to ask the question "would it be a good idea to disclose this?" rather than merely "are we required to disclose this?"
The Conference theme is The Shape of Things to Come, focusing on likely evolution of corporate governance the next five years. The conference, which began with a reception Wednesday evening and runs through Saturday, July 14, includes addresses from regulators, investors, and political commentators. There are more than 20 breakout panels scheduled on topics including board position and leadership, auditor relationships, shareholder engagement, political spending, and executive compensation.
Charlie Cook, the political analyst, and J. Travis Laster, Vice Chancellor of the Delaware Court of Chancery, are among scheduled speakers today. SEC Commissioner Troy Paredes, and author Bethany McLean, are among speakers later in the conference.
About the Society of Corporate Secretaries and Governance Professionals
Founded in 1946, the Society is a professional association of 3,000 attorneys, accountants and other governance professionals who serve about 1,800 public, private and not for profit companies of most every size and industry. Its members support the work of corporate boards and executive management regarding corporate governance and disclosure, compliance with the corporate and securities laws and regulations, and stock exchange listing requirements. The Society provides educational programs, develops best practices and provides data and constructive comments in response to legislative and regulatory requests for information about the practical implications and likely effectiveness of proposed changes in governance practices or regulations. For inquiries regarding Society membership, services, and activities, please call 212-681-2000 or visit our website at www.governanceprofessionals.org.
SOURCE Society of Corporate Secretaries and Governance Professionals