Report: Corporate Secretaries See Limited Value in Publicly Disclosing Board Matrices
NEW YORK, April 4, 2018 /PRNewswire/ -- Today, The Conference Board's Governance Center released a report detailing the role and expectations of corporate directors from the perspective of corporate secretaries. Among the findings, several corporate secretaries are not convinced that publicly disclosing formal board skill matrices – a request some investors are increasingly demanding – will improve board composition and functioning.
In the report, Just What is the Corporate Director's Job?, the viewpoints featured result from a panel discussion with lawyers who are currently serving in the corporate secretarial function at public companies. Doug Chia, the Executive Director of the Governance Center and the former corporate secretary for Johnson & Johnson, moderated the panel. In addition, the Governance Center interviewed several other public company corporate secretaries. Insights from the report include but are not limited to the following:
- The most important facet of directors' interaction with management is the information they receive, analyze, and respond to as they carry out their oversight responsibilities. Corporate secretaries who participated voiced their concern over asymmetric information risk regarding management's communications with directors and ways to mitigate this inherent risk.
- "Ruffling feathers" can have its benefits, but directors must do so with respect. Corporate secretaries have a unique position to assess whether a board is "too collegial" with directors, who often fear upsetting the chair and CEO. Corporate secretaries who participated agreed that having directors with a tendency to "ruffle feathers" can have value as long as all directors maintain an appropriate level of respect for each other.
- How to carry out effective oversight of company strategy remains up for debate. While some corporate secretaries who participated encouraged specific strategy-focused sessions or retreats in addition to regular board meetings, others stressed that strategy should be consciously integrated into every board meeting, not limited to an annual strategy meeting or retreat with management.
"Corporate secretaries and general counsel represent one stakeholder that can provide an unbiased perspective of what goes on in the boardroom since they technically represent the company, not management or the board," said Gary Larkin, the report author and a Research Associate at The Conference Board. "Many with whom we spoke stressed that while boards generally endorse using matrices to measure their competency and effectiveness, they don't believe they should be made public because it risks undermining the credibility of directors and revealing weakness in a board's composition."
"Many people don't realize the corporate secretary is often the only non-board member in the room during board and committee meetings," Chia said. "Other than the CEO, the corporate secretary is the one person at the company who spends the most time interacting directly with board members. This gives these people a truly unique perspective on board dynamics and what the job of a corporate director actually entails from both a practical and substantive point of view."
The report marks the fifth of several Governance Center reports that feature insights from boardroom stakeholders about the role of the corporate director. In addition to highlights from conversations and interviews with corporate secretaries, the report includes a hypothetical corporate director's job description from the perspective of a corporate secretary; a sample board matrix; and, a form letter from the New York City Pension Funds that it sent to the chair of nominating/governance committees of some of its portfolio companies about initiating a discussion regarding board refreshment.
Media can e-mail Joseph DiBlasi or Carol Courter for a copy of the report. Learn more about The Conference Board's Governance Center here. The conversation continues on Twitter: @TCBCorpGov & @ConferenceBoard.
About The Conference Board's Governance Center
The Conference Board's Governance Center draws upon authoritative research from The Conference Board. Our mission is to work in the public interest to provide knowledge and thought leadership on global corporate governance issues for boards and c-suite leaders, investors, and other leading organizations.
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.
SOURCE The Conference Board
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