Corporate Secretary – Corporate Governance Awards Yearbook – Winter 2019

Governance, risk and compliance. Corporate Governance Awards Edition

Corporate Governance Awards 2019<tt>: </tt> The winners’ stories

From disclosure and technology to compliance and ESG, read about what set this year’s winners apart

Editor’s note

Good governance is timeless…

…but our winners have changed with the times

This year marks the 12th annual Corporate Governance Awards, and my fourth. When I joined the Corporate Secretary editorial team back in the fall of 2016, it was during the week of the awards. One of my first tasks for the publication was to interview Bob Lamm, who had just been presented with the lifetime achievement award in recognition of his distinguished career at Pfizer, Gunster, Deloitte, WR Grace, CA Technologies and other companies.

Lamm, who is a mentor to many readers and a friend to many more, left a strong impression on me about the role corporate secretaries and general counsel play in being strong custodians of a company’s corporate governance standards. In 2016 he told me: ‘The notion of living life in a fishbowl and needing some degree of transparency is something some people have trouble understanding emotionally.’

This year’s nominees embody the governance standards required for life in the fishbowl of the public markets. And yet, as custodians of good governance, they are faced with a myriad of challenges they have dealt with adeptly. In the profiles of this year’s award winners you will read about shareholder activism, proxy contests, mergers and acquisitions, data security and innovative uses of technology. Every year there are many high-profile examples of what happens when public companies have governance lapses, but not as much time spent on the good news stories. We’re thrilled to celebrate the biggest success stories of the year.

And in the spirit of recognizing significant achievements, I would like to congratulate Carol Ward for winning this year’s lifetime achievement award. Ward has had a distinguished career at Cigna Corporation and Mondelez International: later in this issue she reflects on her career highlights.

As is customary in the Corporate Governance Yearbook, we also review this year’s proxy season and take a look at the trends that may emerge around the world next year. Rounding out this issue, we have a Q&A with Jonas Kron, senior vice president of shareholder advocacy at Trillium Asset Management, about how the firm views ESG and issuer engagement. Lastly, Joseph Moreno, partner at Cadwalader Wickersham & Taft, looks at the impact the California Consumer Privacy Act may have on companies across the US.

As ever, if you have any questions, comments or suggestions for future issues, please do get in touch.

Ben Ashwell
Editor, Corporate Secretary
+1 212 430 6869
ben.ashwell@corporatesecretary.com

Editor Ben Ashwell
Editor-at-large Ben Maiden
Managing editor & chief copy editor Kathleen Hennessy
Contributor Joseph Moreno
Design and production executive James Noden
Head of marketing Marie Paul

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Award winners Adapting to your audience

Best ESG reporting AT&T

Adapting to
your audience

Best ESG reporting

AT&T

AT&T has been reporting on its ESG performance for the last 12 years. And just as the focus on ESG among investors and companies has grown and evolved, so too has AT&T’s approach to reporting on the issues involved – notably by creating a modular disclosure structure that enables different stakeholders to
take information at the level of detail they need.

At the top of the reporting triangle is the company’s corporate responsibility summary, which gives stakeholders that have general-level interest a high-level overview of AT&T’s work and the underlying strategy behind it. The summary includes broad data tables with narrative and quantitative metrics on a variety of topics that are material to the company.

AT&T in 2018 found itself facing what it calls ‘unprecedented interest in our data analytics’. In response, it began using a new format for the 2018/2019 corporate responsibility summary. It continues to include CSR program achievements, progress toward long-term goals and key performance indicators, but now additionally features analysis of urgent global
ESG trends as well as challenges facing the company and its plans to tackle them. Such topics include human capital management, human rights, climate change, customer privacy and media pluralism.

The second layer of the reporting triangle comprises detailed, topic-specific reports, including 20 issue briefs. These offer a more granular analysis of the company’s managerial and programmatic approach to the most material topics facing the business. They include select content from the Sustainability Accounting Standards Board, CDP and Task Force on Climate-related Financial Disclosures, as well as rankings and ratings. Finally, AT&T publishes issue and region-specific reports on topics such as Latin American CSR, UN sustainable development goals, diversity and inclusion, political engagement and transparency.

‘We wanted to make sure we are speaking to the right audience,’ says Ben Kruse, director of global CSR reporting & insights at AT&T, in describing the approach to reporting. He explains that the team uses web traffic metrics to keep track of whether the disclosures are finding the right targets and makes the reports search-engine-optimized to attract eyes. Most of the traffic goes to the mid-level reports, he notes.

When investors look for ESG disclosure, one of the key factors they take into account is materiality. AT&T takes this seriously, basing its approach on the Global Reporting Initiative’s definition of materiality. This entails a focus on topics ‘that reflect the organization’s significant economic, environmental and social impacts, or substantively influence the assessments and decisions of stakeholders.’ A major part of this is a project undertaken every two to three years – the latest taking place from early in fall 2019 – to engage stakeholders in a formal materiality assessment process that seeks to identify the issues most relevant to AT&T’s value chain.

The assessment in 2016 involved
more than 1,400 people – including employees, consumers and professional stakeholders – completing surveys and interviews. This year, the project will include stakeholders of the WarnerMedia
and Xandr units, reflecting the company’s move into the media, advertising and entertainment industries. Put together, the feedback from the review helps inform how AT&T focuses its efforts, resources
and reporting around ESG issues.

Over the past year, Kruse and his colleagues have improved how the company discloses the results of the materiality assessments and the alignment across its value chain by deploying a portal that offers interactive maps to explain the relationships between material topics and AT&T’s business. In addition to these review projects, Kruse’s team has a close working relationship with the company’s investor relations team, through which they learn about the issues investors are interested in and help prepare responses.

Bruce Goldfarb (right), president & CEO of Okapi Partners, presents the award for best ESG reporting to Ben Kruse, director of global CSR reporting & insights at AT&T

Award winners Crunching the numbers on compliance

Best compliance and ethics program (large cap) VF Corporation

Crunching the numbers on compliance

Best compliance and ethics program (large cap)
VF Corporation

VF Corporation is in the creative business of clothing, with a portfolio of brands including Vans, The North Face and Timberland, and its approach to compliance and ethics is imaginative. For example, the team has been working with VF’s data analytics people to create models that use historical data and demographics to enable the company to concentrate its resources on high-risk areas and create bespoke training and compliance efforts.

Global operations manager for ethics and compliance Justin Jones says Kellye Gordon, vice president for ethics and compliance, saw behavioral science as a means to leverage the data VF holds. The team has so far released a model that takes in information in areas such as the helpline and employee travel to see whether there are areas or groups that generate a greater number of corroborated complaints. For example, it might spot a correlation between employees who don’t complete compliance training on time and a higher incidence of violations, Jones explains, adding that two models have now been developed.

The team has also invested in the company’s ethics helpline. Jones says firms need to have a culture that promotes the use of such facilities and makes clear that there will be no retaliation against those who raise concerns; he notes a decrease in the proportion of anonymous calls from employees. Not only is this ‘a sign of trust in the organization to do the right thing’, but it also provides better material for data analytics and tends to lead to better and more accurate reports, he adds.

From July 1, 2018 through June 30, 2019, the ethics helpline received 869 reports, with 60 of these requesting guidance. The team has trained more than 100 employees on investigating colleagues’ concerns and the company states that, through investigator training, the average number of days needed to close an inquiry has decreased from 32 in 2016 to 25 in 2018.

In terms of educating the VF workforce, the team has issued more than 29,000 ethics and compliance training assignments during 2018/2019 to company associates on topics
including ethical leadership, intellectual property, the company code of conduct, anti-corruption, antitrust and trade compliance – and all with a 98 percent completion rate. Internationally, the training program is administered with help from a compliance and ethics team employee in the Asia-Pacific region, a member of the HR team in Europe and the Middle East, and colleagues in the legal department elsewhere.

The team has updated VF’s code of business conduct twice over the course of 2018 and 2019. The first time, the changes were intended to make the code more engaging to employees by adding context and color. The second refresh was designed to reflect the spin-off of VF’s jeans-wear organization as Kontoor Brands. In each case, the team added new items including real-life scenarios, links to company policies and resources and employee statements on what VF describes as ‘living with integrity’. The code is available in 24 languages.

Among other recent initiatives, the team has created a process that requires employees to report potential conflicts. By mid-2019 this had led to the identification and resolution of more than 50 potential issues, according to the company. The team launched the Principled Podcast in 2018, featuring employees who have dealt with real-life ethical dilemmas in areas such as preventing counterfeiting and declining a bribe. It also presents an ‘Integrity in action’ award that recognizes employees or teams that show integrity through their actions and words.

Marion Lewis (right), CEO of BoardBookit, presents the award for best compliance and ethics program (large cap) to Kellye Gordon, vice president of global ethics & compliance at VF Corporation

Award winners A data-based approach to compliance

Best compliance and ethics program (small to mid-cap) Comscore

A data-based approach to compliance

Best compliance and ethics program (small to mid-cap)

Comscore

Comscore is a great example of using technology to move a compliance and ethics program forward. Centralizing and automating its training program over the past year has brought benefits in terms of improving the timely uptake of courses, being able to spot areas that need attention and fostering a compliance-focused culture. Our judges appreciated Comscore’s use of data analytics as part of a ‘comprehensive’ program.

Comscore’s more than 1,500 employees across 20 countries receive compliance and ethics training that meets their respective needs and reflects local regulations. Skillsoft Compliance provides 13 mandatory training courses and 49 multi-modal optional compliance training units in English, French, German and Spanish. The training covers topics such as the code of conduct, anti-harassment, anti-corruption, data governance, disaster preparedness, privacy and security.

In August 2018 Comscore launched company-wide compliance training administered via Workday and delivered through Skillsoft’s learning platform. Ray Williams, vice president for compliance at Comscore, says the implementation process involved building relationships across teams, including HR. The company had to make sure everyone in the firm was signed up to the new system. Letting people know how important the system was and giving visibility and transparency to the process had an impact, Williams says, adding: ‘You could see the culture of the organization change.’

The new central learning-management system enables Comscore to automate the assignment of compliance training to new hires, existing employees and contractors. It can also differentiate between different groups’ needs. Administrators can schedule automated reminders before training is due and an overdue notice for those who do not complete the training. Employees who are behind schedule now receive an automated email telling them they will be denied access to all systems if they don’t complete the training on time. As a result, the average number of days overdue has been cut from 50 to eight.

The new platform also enables Comscore’s compliance team to run complex data analysis in 10 minutes or less, where previously it might wait hours or days for a simple data inquiry. This means compliance can create pivot tables and dashboards, giving it insight into non-compliance in different locations, business lines and teams. The level of data at the compliance team’s fingertips further means it can report to the general counsel and chief compliance, people & privacy officer on which risk areas or areas of going concern have been tackled.

‘As we [implemented the system], we recognized the need to improve monitoring,’ Williams says. The compliance team uses data analytics to improve awareness of comprehension and retention gaps among employees. In August 2018 it began using a new surveying tool developed by the company’s survey insight team. These surveys enable the firm to measure employees’ awareness of risk areas, understanding of how that risk relates to Comscore’s business and their ability to remediate that risk. The compliance team can then respond to areas that need a push in terms of awareness or training.

Together, these changes have led to ‘a tangible culture shift,’ according to the company. ‘Employees from all countries, departments and business units are proactively engaging with the compliance team, completing assignments and willingly taking surveys,’ it states. ‘Overall, Comscore has noticed a much more aware employee base that expresses interest in the training topics and appreciation for the knowledge.’

Rose Marie Glazer, deputy general counsel & secretary of AIG, presents the award for best compliance and ethics program (small to mid-cap) to Ray Williams, vice president of compliance at Comscore

Award winners Always looking to improve

Best overall governance – international Royal Bank of Canada

Always looking to improve

Best overall governance – international

Royal Bank of Canada

Canada’s Office of the Superintendent of Financial Institutions (OFSI) in September 2018 issued a revised corporate governance guideline that was more principles-based and contained fewer prescriptive elements. In doing so, OFSI granted boards at financial services firms greater discretion over how they meet its corporate governance expectations.

Royal Bank of Canada’s (RBC) corporate secretariat and the corporate and oversight functions used this increased flexibility to improve the board’s oversight of strategy and RBC’s corporate governance practices. The secretariat went back to the drawing board and reviewed what is required of the board and each committee, according to Martin-Pierre Boulianne, senior legal counsel, special governance adviser and assistant secretary. The team interviewed committee chairs and other board members to find out what they would like to improve.

A key resulting improvement was enhanced board and committee effectiveness via meetings, forward agendas and materials. This was done in part by looking at what actions could be taken ahead of meetings to avoid spending time on unnecessary discussions. The team also looked at the documents management gives to board members to focus them on key information. The aim was to avoid meetings involving repetition of what is in those materials and instead make strides toward constructive discussions, Boulianne explains. Despite great progress having been made, he describes the review as a continuing effort, noting that there is always a way to improve a board’s effectiveness and efficiency.

Another improvement under the review has been to increase directors’ focus on key issues such as strategy, risk and talent. The governance committee has also continued to improve board and committee reporting on conduct and culture matters. The aim is to proactively monitor emerging trends and best practices ‘to help refine a holistic approach to overseeing these critical issues,’ the company points out.

Over the past year, the board has overseen improvements in RBC’s approach to climate change. These include: creating an enterprise climate-change strategy; improving the bank’s capabilities in climate risk-management by conducting portfolio, client and scenario analysis and ramping up the bank’s capacity, data and analytics to assess risks; enhancing climate-related disclosures to bring them closer in line with the Task Force on Climate-related Financial Disclosures’ recommendations by integrating them into the annual report and RBC’s ESG performance report and public accountability statement. The governance committee also recruited a third-party consultant to help identify skills and experiences needed on the board to support RBC’s future strategic objectives and review the board matrix to ensure it focuses on talent the board will need.

In addition, RBC undertook a major revamp of its proxy circular. The changes include structural, drafting and design updates intended to engage institutional investors and enhance the circular’s accessibility to retail investors. Boulianne explains that the process included talking to people at RBC to review the entire text of the proxy and reframe it with plain language using simplified text, shorter sentences and less technical language. He notes that there was also an increased use of graphics, tables and workflows to take the burden off the text. ‘We got some positive feedback from shareholders,’ he says.

RBC takes a proactive and broad approach to shareholder engagement, which it says leads to constructive exchanges and often helps clarify the goals of governance advocates who submit shareholder proposals. This approach has led to the withdrawal of 64 shareholder proposals by their proponents over the past nine years, the bank says.

Cristine Carpluk (left), regional vice president of customer success at Diligent, presents the award for best overall governance – international to Maria Douvas, senior vice president, US general counsel & global head of litigation at Royal Bank of Canada

Award winners Doing the best for policyholders

Best overall governance for a private company The Guardian Life Insurance Company of America

Doing the best for policyholders

Best overall governance for a private company

The Guardian Life Insurance Company of America

The Guardian Life Insurance Company of America is a mutual company, with policyholders instead of shareholders. ‘People count, and we want to do what’s best for our policyholders,’ says Harris Oliner, senior vice president and corporate secretary.

The company puts great effort into having top-class governance, going far beyond what it is required to do. For example, Guardian publishes its corporate governance framework, essentially as a form of proxy statement, Oliner says. The focus is on having governance with transparency and doing the right thing, he explains.

Guardian’s corporate governance is grounded in fundamental practices behind good public company governance. For example, the board currently comprises 10 independent directors and one Guardian officer, who is the president and CEO. But Guardian goes beyond the basics and continues to evolve its governance in line with best practices. During the past two years, it has added three new independent directors to the board, and more than one third of its directors are now female.

When looking for a new director, Guardian takes into account an array of qualifications, but also considers diversity of gender, race, ethnicity, age, cultural background and professional experience. ‘We believe the board is cognitively diverse and that a variety of viewpoints contributes to a more effective decision-making process and ultimately to better outcomes for policyholders,’ the company states.

Over the past year, the office of corporate secretary (OCS) improved the onboarding process for new directors by taking steps such as: expanding the director orientation sessions and changing the agenda to center on key strategic/cross-functional issues; creating a buddy/mentor program; giving board members books on board-related matters; and supplying a list of board education courses and seminars.

The OCS also enhanced the board meeting process by developing, alongside the communications team and general counsel Eric Dinallo, a guide to presenting to Guardian’s board. It organizes practice presentations for each meeting cycle. Advice for presenters includes assuming that directors have read the materials they have been given and making sure the presenter is up to date on current affairs that may impact the company, Oliner explains, adding: ‘It’s been a tremendous help.’

As part of the company’s compliance and ethics program, Guardian recently introduced a code of business conduct and ethics for directors, employees, vendors, independent contractors, consultants and employees of the company’s India-based subsidiary. This year, the OCS has worked with the company’s compliance team to beef up the independence analysis process and annual conflicts-of-interest check for all board members.

All employees must complete compliance training on issues such as privacy, record retention and the code of business conduct and ethics. This year, the OCS introduced a new mandatory compliance training program for directors, under which they take a selection of the units
that employees complete. For
directors, these include ‘overcoming ethical obstacles’ and ‘bursting corporate ethics myths’. ‘They loved it,’ Oliner says.

The firm also addressed the potentially thorny issue of subsidiary governance by creating a Guardian India operational risk committee and forging closer connections between other subsidiaries and Guardian’s business unit risk committees and corporate risk-management committee.

‘Governance continues to improve with strong engagement across all risk-management committees,’ the firm states. ‘Risk-management committees’ charters will continue to evolve, focusing on driving improved accountability, clearer escalation processes and robust dialogue on emerging risks.’

Paul Lockhart (left), vice president of sales at Passageways, presents the award for best overall governance for a private company to Harris Oliner, senior vice president and corporate secretary of The Guardian Life Insurance Company of America

Award winners Back-to-back wins

Best proxy statement (large cap) GM

Back-to-back wins

Best proxy statement
(large cap)

GM

GM won the best proxy statement (large cap) category for the second consecutive year at the 2019 awards. Its entry showed clear progression from the previous year’s award-winning proxy statement, and both publications emphasize the growing importance of communicating a cohesive theme through the proxy statement.

In 2017 GM faced a proxy contest with Greenlight Capital in which the investor questioned the company’s capital allocation and the makeup of the board. This meant the 2018 proxy statement had to clearly explain why GM felt it had the right mix of skills and experiences in its boardroom to deliver on its strategy, according to John Kim, lead securities counsel at GM.

This year the context was different, as GM entered proxy season uncontested. The charge for the 2019 proxy statement was to communicate the company’s transformation, which it feels is necessary to deliver on the vision of a future where electric vehicles are ubiquitous. ‘Mary [Barra, GM’s chair and chief executive] has been pushing a culture of winning with integrity, so this year we focused on key cultural and business actions, whereas last year we were much more focused on governance actions,’ Kim says.

The cover of the proxy statement is striking. The first thing the eye is drawn to, in the middle of the page, is GM’s vision for the future. ‘We see
a future with zero crashes, zero emissions and zero congestion,’ the
text reads. It’s larger than the company logo and the acknowledgment that the reader is looking at GM’s proxy statement. This message is immediately reinforced on page two, where the company’s mission and values are laid out.

For the second consecutive year, the GM proxy statement team chose to publish the welcome letter in the form of a Q&A between Barra and a board director – this time the company’s lead independent director Theodore Solso. ‘We continued that practice because we got very good feedback on it from our investors,’ Kim explains. ‘It presents an opportunity to have a slightly more informal dialogue.’ Given the company’s focus on transformation this year, it’s notable that the second question raised in this Q&A is about corporate culture – a burgeoning area of focus for investors.

Kim and the GM proxy statement team clearly know investors are looking for ESG information in proxy statements, having included sections on human capital management, sustainability and political lobbying, in addition to the strong corporate governance focus in the director re-election and CD&A sections. Kim says the proxy statement team benefited from using material that is published in GM’s annual sustainability report and adds that ESG topics – most specifically human capital management – will likely be a big focus for the team as it prepares the 2020 proxy statement.

Another area of the proxy where ESG factors make an appearance is the CD&A section. GM ensures certain components of its executives’ pay packages are based on ESG factors, and this year the team added green leaf icons next to each ESG line item, helping investors to navigate the section more efficiently. In general, the CD&A section is an excellent case study in how to use graphics and text in tandem to tell a clear story of how pay is linked to performance and the company strategy.

One final challenge the proxy team had to navigate this year was to clearly communicate to investors to tune in to the virtual proxy meeting, the first in the company’s history. The team included a statement from the governance chair on page three of the proxy, a bolstered FAQ section and a helpline for investors experiencing difficulties dialing in. And, Kim says, to their surprise and relief, the feedback was almost universally positive.

Ron Schneider (left), director for corporate governance services at DFIN, presents the award for best proxy statement (large cap) to John Kim, lead securities counsel at GM

Award winners A DIY proxy statement

Best proxy statement (mid-cap) NorthWestern Energy

A DIY proxy statement

Best proxy statement (mid-cap)

NorthWestern Energy

As proxy statements continue to evolve into glossier, more visually engaging publications, the number of people involved can increase – as can budgets. But for NorthWestern Energy that isn’t an option. The two-person corporate secretary team is responsible for drafting the language, gathering the data and drawing the charts, says Tim Olson, senior corporate counsel and corporate secretary at the company.

Olson says he and his colleague Emily Larkin, assistant corporate secretary, ‘try to make incremental progress each year’ by looking at the nominees for each Corporate Governance Award and exploring what they could replicate. ‘We’re fans of good design,’ Olson says. ‘If we see something that grabs our attention and makes us want to read it, we will use it.’

But he adds that not everything they see works for them, even if they like it in other contexts. ‘We look for new charts and we really like some of them, but a proxy statement isn’t a one-size-fits-all [publication]. If something doesn’t fit our story, it doesn’t find a place in our report,’ he says.

It’s a strategy that has consistently worked for the firm. NorthWestern Energy won the best proxy statement (small to mid-cap) category in 2014 and has been short-listed four more times. The DIY approach means drafting the proxy statement takes Olson and Larkin about nine months. During the summer, Larkin begins to gather peer data that will be used in the following year’s pay-for-performance section of the CD&A. By November, Olson and Larkin are drafting the full document to present to the board in December. Then there are various rounds of feedback with the board in January
and February, before the statement is filed in March.

Olson says board input is crucial to the development of the proxy statement, especially given the small team. He praises the company’s prior chair of the compensation committee, who he says was very progressive in asking for detailed pay-for-performance data.

‘A lot of the visual elements in our proxy statement are as a result of his request many years ago to help the compensation committee make decisions about pay for executives,’ Olson explains. ‘When we moved from the boring, technically compliant proxy statement and converted to something more visually appealing, we could turn to those charts we were already producing on an annual basis for our compensation committee.’

One example of a progressive data point NorthWestern Energy has reported on is the CEO pay ratio, which it has included since 2010; last year it became mandatory for public firms to include this in their proxy statement.

While all nominated proxy statements are elevated by design components that would have been unfamiliar to proxy readers even five years ago, it’s also important that the publications are easy to read. The judges praised NorthWestern Energy’s readability and plain English disclosure. Olson says this has definitely been a focus for him and Larkin in recent years.

‘Two years ago we focused on how to make the proxy statement easier to read by using smaller words and shorter sentences,’ he says. In practical terms, this has meant looking at every word closely and thinking about the simplest way to say it.

'For example, the proxy statement now refers to pay rather than compensation and the compensation committee rather than the human resources committee. The latter change was adopted based on reading other successful proxy statements.

As Olson and Larkin turn their attention to next year, their goal is to find ways to add more ESG-focused material into the proxy statement, and to further enhance the storytelling with the use of photographs as well as charts and tables.

Ron Schneider (left), director of corporate governance at DFIN, presents the award for best proxy statement (mid-cap) to Tim Olson, corporate secretary of NorthWestern Energy

Award winners Reaching for a higher standard

Best proxy statement (small cap) Coeur Mining

Reaching for a higher standard

Best proxy statement (small cap)

Coeur Mining

As a small-cap company, Coeur Mining doesn’t have the same resources that many past winners and nominees of the best proxy statement award have had. But this year, for the first time,
the Corporate Governance Awards recognize the best proxy statement among small caps, rather than grouping their entries with mid-cap ones.

While the legal team at Coeur Mining may have a small budget and fewer resources than some companies, it
has looked at the trends adopted by
the large-cap leaders in proxy disclosure and thought carefully
about what it could emulate. Back in 2015 the company’s proxy statement was very dry: it clocked in at more
than 100 pages, featured very little visual stimulus and was written like
egal document.

In a short space of the time, the company’s legal team has made significant improvements. This year, for instance, the company focused on how to disclose more about ESG factors. In the opening letter to shareholders, signed by Mitchell Krebs, the company’s president and CEO, the very first point is about how the company has signed up to comply with 10 of the UN’s Sustainable Development Goals. The opening letter goes on to discuss how the company has invested in retaining and rewarding its staff, as well as discussing recent business performance. In a clear illustration of Coeur Mining’s legal team taking inspiration from other proxy statements, the opening letter articulates the theme for this year’s proxy: ‘We pursue a higher standard’.

The opening letter also outlines a unique effort to drive shareholder participation in the proxy voting process. Krebs explains that for every shareholder that casts a vote, $1 will be donated to Hire Heroes USA, a non-profit that supports unemployed and underemployed veterans who are seeking work.

One of the ways the company reinforces the theme of the proxy statement is through the inclusion of a proxy summary – and, again, this is something the legal team had recognized as a best practice in proxy statements at larger companies. The nine-page proxy summary clearly outlines the different sections of the proxy, includes page numbers for easy navigation, and has charts and graphs for easy reading.

Continuing the motif of easy reading, Coeur Mining’s CD&A is easy to follow, due – at least in part – to the macroeconomic outline published on its first page. The legal team was keen to highlight the extent to which executive compensation is linked to business performance and strategic goals, and by including the macroeconomic outline it helps steer the reader through.

There are also links drawn between business results and the ultimate impact on executive pay. In several instances this is clearly displayed through the charts and tables – perhaps most effectively in the opening to the CD&A, which is broken into two columns: ‘What we do’ and ‘What we do not do’. The company received a 96 percent approval rate during its say-on-pay vote in 2019.

One aspect of board governance that is likely to face greater scrutiny in the coming years is the board refreshment, evaluation and director selection process. Coeur Mining’s proxy statement clearly outlines the director nomination process, as well as providing meaningful disclosure about why two new directors were appointed to the board.

In addition, the board composition section of the proxy opens with a chart displaying the variety of skills and experiences the board directors have. This chart diverges from the skills matrix that is commonly included in proxy statements because rather than being a tick-the-box exercise, it explains why each skill or experience is relevant to Coeur Mining’s board and, therefore, its shareholders.

Ron Schneider, director of corporate governance at DFIN, presents the award for best proxy statement (small cap) to Robyn Koyner, vice president, assistant general counsel & assistant secretary at Coeur Mining

Award winners In-house tools make the difference

Best use of technology Salesforce.com

In-house tools make the difference

Best use of technology

Salesforce.com

Our judges’ comments on Salesforce’s use of technology in the governance space range from the impressed – ‘outstanding’ and ‘transformative’ – to the envious: ‘I wish I’d had those tools when I was a corporate secretary.’

From the second half of 2018 into 2019, Salesforce’s corporate, securities and governance (CSG) team, led by Scott Siamas, vice president and associate general counsel for corporate, securities and global governance, found ways to use the firm’s own technology to its advantage.

The company has been growing quickly and the CSG team was asked to think of ‘moon shots’ to keep up with demand. Firstly, the team automated the restricted stock release process amid a rapidly growing number of M&A-related key employee stock releases.

According to Salesforce, the firm over the past five years has bought more than 30 companies and, in almost every case, the founders and key employees of those companies received Salesforce restricted stock that vests periodically for retention purposes. The CSG team processes all these vests, which involves co-ordinating with the key employees, their representatives and Salesforce’s transfer agent, then issuing individually tailored legal opinions. The rate of acquisitions meant the CSG team was becoming buried in paperwork and concerned about potential human error in the accompanying manual data entry.

The solution was that in late 2018 the team partnered with the company’s M&A legal team and legal operations team to build an automated solution from scratch based on Salesforce’s Lightning Platform. The new process includes useful elements for the CSG team, such as alerts that a vest is coming up. Team members can automatically generate the required representation letter, with the recipient and share amounts automatically populated. Once signed, the platform automatically generates a legal instruction letter to the transfer agent. The result is that Siamas can now do a stock release in three seconds – a process that used to take an hour – with a much-reduced chance of error.

The second innovation involved the team creating a ‘community’ cloud destination – a little like a Facebook page – where employees have their insider-trading questions answered. Instead of having to answer endless individual emails often asking the same questions, the team can now provide real-time answers and
updates that the entire Salesforce employee population sees. ‘These Q&As are searchable, encourage employee self-help, decrease the amount of time the team spends answering questions and reduce employee confusion around insider-trading matters,’ the company says.

A third improvement was moving away from the process of alerting all employees of trading-window openings and closings via mass emails from the general counsel. The general counsel received many questions from employees, and responding to all of them was an inefficient use of time. The solution was to use Salesforce’s marketing cloud to create personalized email notifications with relevant links and to create an email alias that routes questions directly to the team that is best able to handle them.

The CSG team has also started using a Salesforce product – a collaborative document-creation and project-management tool – to help prepare for the AGM. The switch has led to much less email traffic and fewer in-person meetings in the run-up to the meeting, which saves time and helps productivity.

The team doesn’t only use Salesforce technology, however. For example, this year it improved its D&O questionnaire process by replacing long, legalistic paper questionnaires mailed to directors with a streamlined version via a service provider’s online facility. Siamas says this time around he received the first director response within an hour, where previously it had sometimes taken weeks.

Martyn Chapman (right), executive director at the Nasdaq Center for Corporate Governance, presents the award for best use of technology to Scott Siamas, vice president & associate general counsel for corporate, securities and global governance at Salesforce.com

Award winners Year-round engagement efforts

Best shareholder engagement IBM

Year-round engagement efforts

Best shareholder engagement

IBM

For IBM, shareholder engagement is nothing new. Evan Barth, senior counsel at the company, says that when he joined IBM in 2008, there was already a robust proxy season engagement plan in place – long before the term ‘shareholder engagement’ was mainstream.

In March, once the proxy statement has been filed, IBM’s in-season engagement efforts kick in. In 2019 the firm engaged with more than 100 institutional investors, representing more than 70 percent of the company’s institutional ownership, and reached out to more than 250,000 retail investors and registered shareholders.

But it’s outside of proxy season that IBM’s shareholder engagement efforts really stand out. In 2017 the company began a much more concerted off-season engagement campaign, run by the corporate secretary’s office. This year the team started its off-season engagement in September, just a couple of weeks after the proxy meeting, and it ran all the way through until February. During this time, the team met with investors representing more than 30 percent of shares that voted at the 2018 proxy meeting, and contacted investors representing more than 50 percent of shares voted.

The longer this off-season engagement goes on, the more sophisticated it becomes. ‘In the last year we created our own internal database for feedback from each investor [meeting],’ Barth says. ‘We track whether it agrees with our positions or not, and also what its perspectives are. That means we can have a customized approach to our engagement, where investors can meet with different leaders from IBM.’

For instance, if the team knows an investor is likely to ask questions about executive compensation, it will ensure the vice president of compensation and benefits is in the meeting, to enable a deep dive. This strategy reaches right across IBM’s leadership; the team has facilitated investor meetings with IBM’s chair and CEO, lead director, CFO, general counsel, chair of the executive compensation and management resources committee, vice president of corporate and environmental affairs, vice president of corporate citizenship and many others.

Natalie Wilmore, senior attorney at IBM, also points out that the team keeps an eye out for investors’ articles and thought leadership on certain topics that are published outside of meetings. ‘If we see an article by
one of our top investors explaining its position on cyber-security, for
xample, we will take that to our team
to see how it aligns with what we’re doing,’ she says.

One of the key aspects of shareholder engagement is that companies are seen to respond to the feedback they receive. In this spirit, Barth points to an ESG webcast IBM hosted last year for its investors. ‘In the last year we started getting more E and S questions,’ he says. ‘What we found is that people were interested in a deeper dive than we were giving in meetings, so we launched the webcast as an even deeper dive. It’s been wildly successful.’

Wilmore adds that the webcast format allows the team to be flexible with emerging topics that are on investors’ minds. She cites ethics in artificial intelligence as one of those topics that has recently emerged, and that will be addressed in this year’s webcast. Other examples of recent changes discussed during off-season engagement include: changing the title of the presiding director to lead director and adding an IBM revenue metric to the annual incentive program.

Finally, Barth says, it’s important to explain your shareholder engagement efforts clearly in the proxy statement – articulating why it’s important, how it’s done and what the outcomes are. ‘Proxy statements are 90 pages long, but only five pages are read,’ he says. ‘That’s why the shareholder engagement section matters to us.’

Larry Miller (right), managing director at Innisfree, presents the award for best shareholder engagement to Frank Sedlarcik, vice president, assistant general counsel & secretary at IBM

Award winners A passion for governance

Governance professional of the year (large cap) Hope Mehlman, Regions Financial Corporation

A passion for governance

Governance professional of the year (large cap)

Hope Mehlman, Regions Financial Corporation

Regions Financial Corporation in Birmingham, Alabama, has in recent times adopted best practices across a range of governance areas. In doing
so, it owes much to Hope Mehlman, executive vice president, chief governance officer, assistant general counsel and assistant corporate secretary, and her team. ‘This is not
just a job – it’s a passion for us,’ Mehlman says.

Just one example is a ramped-up focus on ESG over the past year. Mehlman has led an expansion of the company’s corporate sustainability report into a full-scale ESG report that uses Global Reporting Initiative guidelines and includes information on climate change, human capital management, sales practices, privacy & data security and corporate culture. She also created an environmental sustainability policy statement designed to show the company’s commitment to operating in a sustainable manner and make it easier to introduce pro-sustainability practices such as recycling. Not content with just having nice policies, she also set up an environmental working group that meets quarterly to discuss ways to tackle issues including the company’s use of Styrofoam.

The team approached the board about adopting a Rooney Rule to include diverse candidates in director searches. Mehlman says the board was already doing so and felt that formally adopting the policy would be a good signal to investors. ‘We feel the board should reflect our employees, communities and customers,’ she says. ‘We want to be proactive and ahead of the game from a governance perspective.’ She advocated for the compensation committee to include in its charter responsibilities for overseeing human capital and talent management, diversity and inclusion practices and management succession. At board level, she also helped in the transition to an independent board chair this year.

Regions Financial was also short-listed for this year’s shareholder engagement award, and with good reason: Mehlman’s team takes a year-round approach to keeping in touch with investors and puts in a lot of miles to meet with them. She points to the importance of knowing and understanding investors. She wants to give unfiltered feedback to the board – and to do that she gets to know investors personally.

An important part of Mehlman’s engagement work involves getting to industry conferences to meet face to face with shareholders. This year the team’s efforts have included attending Harvard Law School’s Corporate Governance Roundtable, Stanford Law School’s Institutional Investor Forum, the investors forum at the Society for Corporate Governance’s 2019 national conference and the Council of Institutional Investors’ (CII) 2019 spring conference. Mehlman is one of only two corporate members of the CII board, where she sits on the policy committee. And she is vice president of the Society for Corporate Governance’s southeastern chapter. ‘People get to know you, and a lot of this is about trust,’ she says.

Another important aspect of the engagement program has been getting more director involvement. For example, Mehlman arranged for 10 investors to meet with the chair and three committee chairs from the Regions board. Her team has also invited investors to come to board meetings, meet with committees and share their views on corporate governance – which the board appreciated, she says.

Elsewhere, she ensures the company’s proxy statements discuss important issues as they arise. In 2018 that included disclosure about Region’s actions regarding corporate culture, the #MeToo movement and sexual harassment in the workplace. This year the statement explained how the company’s corporate purpose aligns with its long-term strategy, discussed board oversight of culture and included new ESG disclosures.

Dorothy Flynn (right), president of corporate issuer solutions at Broadridge, presents the award for governance professional of the year (large cap) to Hope Mehlman, executive vice president and chief governance officer at Regions Financial Corporation

Award winners Taking board refreshment seriously

Governance professional of the year (small to mid-cap) Adam Kokas, Atlas Air Worldwide

Taking board refreshment seriously

Governance professional of the year
(small to mid-cap)

Adam Kokas, Atlas Air Worldwide

Adam Kokas is a man with his hands on many governance levers. As executive vice president, general counsel and secretary at Atlas Air Worldwide, he leads the company’s governance program and takes charge of initiatives ranging from year-round shareholder engagement and keeping directors up to date on the latest trends in corporate governance to board refreshment and the company’s proxy statement.

Over the past three years, Kokas has led a process of board refreshment that has led to the arrival of five of the nine current directors. The process has been characterized by a quest for diversity. ‘We focus on having the right people,’ Kokas says, noting that this entails looking at directors’ skills, expertise, gender and racial diversity. Current members of the board have backgrounds in cyber-security, finance, the military and even space: Charles Bolden served as the 12th administrator of NASA.

Women represent 30 percent of the Atlas Air board and 50 percent of the board are now ‘diverse members’, which the firm describes as ‘consistent with the view of many of [our] shareholders and governance studies indicating that a more diverse board should result in better shareholder returns over the long term.’

All that board refreshment requires a lot of onboarding. Kokas describes it as a process that is undergoing continuous improvement. It begins with a tour of Atlas Air’s command center and, among other things, he looks for opportunities to bring new directors to the company’s operations in Miami and Cincinnati, Ohio.

Tragically, the company this year witnessed an accident in which two Atlas Air pilots and one passenger lost their lives. It was the first such event in the company’s history and, aside from the focus on caring for the families of the deceased, the company has taken steps to address safety and compliance. For Kokas, it has also meant working with safety, regulatory and operational teams amid a continuing National Transportation Safety Board (NTSB) investigation. Alongside outside counsel, he has helped prepare employees for interviews with the NTSB and, alongside other team leaders, he has helped keep the board updated on the process, including risk and insurance matters.

Indeed, Kokas is focused on keeping directors up to date on a variety of issues. He briefs the board and various committees, including the audit and nominating and governance committees, on topics such as shareholder activism, litigation, proxy access, SEC disclosure rules, CEO succession and talent development.

Over the past year, Kokas’ team has continued to improve the company’s proxy statement. Changes include greater use of graphics, such as a new board skillsets/qualifications matrix, and the addition of ESG-related disclosures. Other recent work he and his team have been involved in includes:

Amending the nominating and governance committee’s charter to state that diversity, including gender and ethnicity, should be taken into consideration in assessing the board’s core competencies as a whole
Amending the company’s corporate governance principles to limit directors to serving on a maximum of four public company boards, including Atlas Air’s board, to avoid potential over-boarding, and create a lead independent director position.

In addition to his work for Atlas Air, Kokas takes his role in the industry and profession seriously. He was elected in June 2019 to the board of the Society for Corporate Governance and is a member of its audit and finance committees, having served as secretary to the board last year. He was also a panelist last November as part of an SEC roundtable on the proxy process.

Lou Vega (left), senior vice president of business development at Alliance Advisors, presents the award for governance professional of the year (small to mid-cap) to Adam Kokas, executive vice president, general counsel & corporate secretary of Atlas Air Worldwide

Award winners Improving governance through ‘trial by fire’

Governance team of the year (large cap) Caesars Entertainment Corporation

Improving governance through ‘trial by fire’

Governance team of the year (large cap)

Caesars Entertainment Corporation

Caesars Entertainment Corporation this year wins the award for governance team of the year (large cap) after making strides on governance while undergoing what one of our judges called ‘trial by fire’. Michelle Bushore, leader of the governance team, joined Caesars in October 2018. She was promoted in June 2019 from deputy general counsel to executive vice president, general counsel, chief legal & risk officer and corporate secretary, succeeding Timothy Donovan, who had been Caesars’ general counsel for 10 years.

The team spent the first part of 2018 dealing with Caesars’ emergence from bankruptcy in October 2017. Next came a sharp drop in the company’s share price following the second-quarter earnings call on August 1, 2018. This triggered a round of shareholder activism as investors voiced concerns to the board and management. In February 2019 activist investor Carl Icahn started to build a stake in Caesars. Negotiations with him led the company the following month to add three new directors to its board, while three directors stepped down. A new CEO, Anthony Rodio, joined the company and the board in May 2019. Then in June Caesars agreed to merge with Eldorado Resorts in a deal valued at $17.3 billion.

For the governance team, this period demanded careful and extensive investor engagement. The team began this process after the company had emerged from bankruptcy and it took the initiative to deal with investors wanting change at the company even before Caesars was aware of Icahn’s interest. ‘By the time we knew he was building a stake, we were ready,’ says Renee Becker, vice president, chief counsel for corporate and securities and assistant secretary.

During this time, it was important for the governance team to ensure the board was on the same page in terms of investor engagement. Members of the team looked at communications policies at other companies and consulted with directors about their experiences on other boards to establish best practices, Becker explains. As a result, the team created a policy directing that all communications regarding the company between directors and shareholders, the media and other outside parties are funneled through the board chair, with the expectation that the chair will consult with the CEO and general counsel ahead of making such communications. The team also began to develop a more formal shareholder outreach program, something that had not previously been necessary given that 60 percent of Caesars’ shares were held by two private equity firms.

The governance team last year also saw that a lack of female representation on the Caesars board needed to be addressed, and by the end of 2018 it had onboarded two female directors. In total, the team dealt with the onboarding of six new directors in less than six months. It helped create a formal training program for new directors that educated them about their role as board members and familiarized them with the company’s senior leaders and operations.

In addition, ahead of what was expected to be a tough 2019 proxy season, the governance team further improved shareholder engagement, establishing a formal outreach program for the 2019 AGM.

In recognition that Caesars was no longer a controlled company, the team opted for a total overhaul of the proxy statement along the lines of modern disclosure – adding a summary section, color, director photos and tables and charts. Among other things, the company’s compensation program was enhanced in response to investor requests that it include more performance-based measures and new metrics. In the end, all proposals at the 2019 AGM passed comfortably.

Christopher Hayden, chief operating officer for the US at Georgeson, presents the award for governance team of the year (large cap) to Michelle Bushore, executive vice president, general counsel and chief legal & risk officer at Caesars Entertainment Corporation

Award winners An expert helping hand

Governance team of the year (small to mid-cap) Chesapeake Utilities Corporation

An expert helping hand

Governance team of the year (small to mid-cap)

Chesapeake Utilities Corporation

The governance team at Chesapeake is a small and tight-knit group that, despite its lack of numbers, lends a helping and expert hand to a wide array of projects. Stacie Roberts was promoted in May 2019 to assistant vice president of corporate governance and continues to report directly to the company’s executive vice president, general counsel, corporate secretary and chief policy and risk officer. In terms of full-time staff, her team comprises governance managers Heidi Zanecosky and Darcy White.

The team has remained roughly the same size while Chesapeake has grown from a market capitalization of $395 million in 2010 to $1.58 billion in 2019. At the same time, the team has expanded its roles and responsibilities to take in legal and risk management, environmental and social issues, operational efficiencies, technological advancements, strategy and cyber-security.

‘We have had a lot going on this year,’ Roberts says. That busy schedule
has included everything from looking at the potential for using artificial intelligence to improve the team to helping with employee appreciation efforts.

It is increasingly important for companies to stay current with best practices for the content and presentation of their proxy statements. The Chesapeake team helped enhance the company’s proxy statement by: benchmarking more than 30 other companies’ proxy statements; streamlining sections including the summary of proposals and board recommendations, standing committees of the board and governance trends and director education; designing the brand page to take into account Chesapeake’s culture and employee engagement in the community; and enhancing control documents and audited materials.

ESG is another area of growing importance to both investors and boards. In recognition of that, the team this year spearheaded the collection of data and created a presentation to the corporate governance committee on ESG issues. It also worked on the company’s ‘deep dive’ into ESG practices. This involved generating a more than 60-page presentation on environmental and social practices including general trends, investor views, stockholder proposals, websites, metrics, rating agencies, policies, board and management leadership, public disclosures, executive compensation linked to ESG, legislative initiatives and peer company analysis.

CEO succession is a key responsibility for boards and this year the Chesapeake corporate governance team supported the appointment of Jeffry Householder as president, CEO and director. The team also supported issues relating to the retirement of his predecessor Michael McMasters as a director and as president and CEO after 36 years with the company. Shortly thereafter, the team assisted in the corporate governance committee’s discussions on board composition and succession, including providing an analysis on practices benchmarked against peer companies, the S&P 500 and the top 100 US public companies. The committee took into account factors such as the average age of boards, diversity, refreshment, tenure, corporate culture, ESG, cyber-security and shareholder activism.

Among other things, over the past year the team also:

Benchmarked peer company practices related to year-end materials such as letters to shareholders
Introduced upgrades to the board portal that created an improved director experience and looked at product development on the horizon
Reviewed best practices relating to annual board and committee evaluations as well as helped bring evaluations into line with the company’s culture and practices, added clarity to the evaluations and increased consistency across evaluations.

Tiffany Wooley (left), chief counsel for executive compensation & governance and assistant secretary at Marsh & McLennan Companies, presents the award for governance team of the year (small to mid-cap) to Stacie Roberts, assistant vice president of corporate governance at Chesapeake Utilities Corporation

Award winners Tackling a tough double-header

Rising star Connor Kuratek, Marsh & McLennan Companies

Tackling a tough double-header

Rising star

Connor Kuratek, Marsh & McLennan Companies

It’s been a banner year for Marsh & McLennan Companies’ (MMC) Connor Kuratek, in which he traveled from one side of the world to the other to help with governance issues. Kuratek only joined the firm in 2016 but was handed key roles on two of the most important issues facing MMC: the successful resolution of a governance inquiry by the Australian Royal Commission, and the $6.5 billion acquisition of the UK’s Jardine Lloyd Thompson (JLT), MMC’s largest ever M&A deal.

Highlighting his rise to recognition, Kuratek came to the company as chief counsel for securities and finance and assistant corporate secretary, and now serves as chair of MMC’s disclosure committee, secretary to the audit committee and member of the management ESG committee. In June 2018 he was sent to Australia to help Mercer, one of MMC’s four operating companies, respond to allegations that Mercer put its own interests ahead of those of its customers, allegations that had prompted an investigation by the Royal Commission.

Kuratek’s mission was to assist on governance issues related to the functioning of the independent board managing the Mercer Superannuation Trust, which was providing services to the customers at issue. In doing so, he was able to draw on his experience as secretary to the audit committee and expertise on conflicts of interests and best practices in US governance. ‘We needed someone with the emotional intelligence and personality to support colleagues who were under pressure and strain,’ says Tiffany Wooley, assistant corporate secretary at MMC.

Kuratek spent weeks looking at governance processes, helping prepare and review documents and implementing best practices. For example, MMC noted that there were directors on different boards with overlapping conflicts. Although this was allowed under the rules it was not best practice and Kuratek worked with the local team to simplify these structures and create guidelines for subsidiary governance. He also helped the company respond to three witness statements from the commission, which decided not to call Mercer to testify and closed the investigation.

‘We believe Mercer’s prompt and thorough... response demonstrated its commitment to integrity and good governance. Connor’s brilliance, impeccable judgment and good cheer were central to this success,’ the company says.

Just weeks after he returned from Australia, MMC and JLT launched ‘an insane 11-day sprint to reach a definitive [M&A] agreement.’ Kuratek was part of a four-person in-house legal team on the transaction, and he worked on the deal’s ‘novel’ financing involving a forward exchange hedge that would disappear at no cost to MMC if the deal failed.

The financing plan was reviewed by the board, its finance committee and audit committee. The deal was signed on September 18 and a target set to close by spring 2019, which would require securing regulatory approvals in the US, Europe, Colombia, Russia, Singapore, South Africa and other jurisdictions.

The legal team prepared a quick sale
of the JLT aviation business in case it raised antitrust issues. ‘With MMC’s chief M&A counsel on extended medical leave, Connor spent 10
days in a windowless London conference room to help reach an agreement to sell JLT’s aerospace business,’ MMC states. Kuratek made sure good governance was observed, such as appointing an independent trustee to monitor the divested business for potential conflicts of interest while it was up for sale.

‘We took subsidiary governance seriously, contacting directors on vacation to walk through material
and answer questions when the acquiring entity was changed at the last minute,’ Wooley says. Ultimately, the MMC-JLT deal closed – exactly on schedule – on April 1.

Kevin White (right), senior vice president of MacKenzie Partners, presents the award for rising star to Connor Kuratek, chief corporate counsel and assistant secretary at Marsh & McLennan Companies

Award winners Success in deals and mentoring

Lifetime achievement Carol Ward

Success in deals and mentoring

Lifetime achievement

Carol Ward

Carol Ward is this year’s recipient of the lifetime achievement award as a result of her work both in guiding major firms through times of governance and corporate transformation, and in guiding young professionals on the values of good corporate governance.

‘Carol has been very active in the governance community for the 25 years I have worked in the field, and probably longer,’ says Lydia Beebe, founder of LIBB Advisors and director of Kansas City Southern, EQT Corporation and Aemetis. ‘She makes herself available to others as a sounding board, mentor or just a good listener. She has quietly helped so many of us over the years, without ever seeking attention or glory for herself.’

Ward started life in the governance world with a 23-year stint at Cigna Corporation in Philadelphia, where
she was corporate secretary and chief compliance officer. During that time, she advised the board, executive management and employees on parent and subsidiary corporate governance and headed up the firm’s compliance program. Among other achievements, she worked on important aspects of
the corporate restructuring and regulatory approvals in advance of
the sale of Cigna’s property/casualty business. She also advised Cigna’s group insurance and investment businesses in Connecticut, and
created and implemented strategies
for the corporate and legal affairs departments, including policies
and practices as well as initiatives
to increase efficiency and improve services.

After Cigna, Ward spent 12 years at Kraft Foods as vice president and corporate secretary. In that role, she and her team advised the board, executive management and employees around the world on parent and subsidiary corporate governance, shareholder engagement, securities law and executive compensation. During her time at the company, she played important roles in Altria’s 2007 spin-off of Kraft Foods, Kraft Foods’ acquisition of Cadbury and the 2012 spin-off of Kraft Foods’ North American grocery business, which led to the company’s renaming as Mondelez International. These deals involved implementing effective governance practices, building and refreshing board composition, undertaking shareholder engagement and tackling investor activism.

Ward has been heavily involved in developing talent during her career, acting as sponsor and mentor to many employees both within and outside of her teams. She was a member of Cigna’s financial development program advisory board, created and ran an international mentorship program for Mondelez International’s corporate and legal affairs department and has coached law students during internships with Mondelez. Asked about the importance of mentoring young professionals, Ward says: ‘I think corporate governance is important. If I can expose professionals to it early in their careers, they can bring it with them wherever they go.’

Among other things, Ward is also a believer in diversity. ‘I think diversity of thought and diversity of experience is so important,’ she says. ‘My strongest teams have been my most diverse teams: they came up with the best ideas and did the best work. They were also the teams that liked to learn and grow, which meant they could – and did – continue to do better and better work.’

After retiring from Mondelez, in January 2019 Ward joined Chicago-based Corporate Governance Partners, a corporate governance software
tart-up, as senior adviser. Outside of her day job, she is a founding and continuing member of the advisory board of the University of Delaware’s John L Weinberg Center for Corporate Governance. She is long-time member of the Society for Corporate Governance and was chair from 2001
to 2002. She is also an inaugural member and co-chair of the commission overseeing the society’s certified corporate governance professional credential.

For more on Ward’s reflections on her career, please see A career of governance achievements.

Carol Ward accepts her award for lifetime achievement

The judges The Corporate Governance Awards 2019

Meet the judges

Lydia Beebe

Kansas City Southern

Lydia Beebe is a public company director and corporate governance expert. She is a board
director of Kansas City Southern, a Class A railroad company, and a member of its nominating, governance and compensation committees. She also serves on the board of Aemetis, a renewable fuels and biochemical company based in Cupertino, California. She chairs the company’s compensation, governance and nominating committee and serves on its audit committee. In addition, she advises companies on corporate governance and performs external board evaluations through her consulting firm, LIBB Advisors.

Before its acquisition by Tokio Marine in 2015, Beebe served on the board of directors of HCC Insurance Holdings, a specialty insurance firm in Houston, Texas, where she chaired the firm’s nominating and corporate governance committee. From 1995 to 2015, she served as corporate secretary and chief governance officer at Chevron Corporation. She was senior of counsel in the San Francisco office of Wilson Sonsini Goodrich & Rosati from June 2015 until July 2017.

Beebe is co-chair of the Stanford Institutional Investors’ Forum at Stanford Law School. She has served on numerous non-profit boards of directors, including those for the National Judicial College,
the Presidio Trust – to which she was appointed
by former US president George W Bush – and the California Fair Employment and Housing Commission, to which she was appointed by
former governor Pete Wilson and for which she
was recognized as a civil rights hero by the State
of California.

She is a past chair of the Society for Corporate Governance and its corporate practices and national conference committees, and chair of its northern California chapter. She also served as board chair of the northern California chapter of the National Association of Corporate Directors, and as an advisory board member of the Rock Center for Corporate Governance at Stanford University and the Weinberg Center for Corporate Governance at the University of Delaware.

Douglas Chia

Soundboard Governance and Rutgers

Douglas Chia is president of Soundboard Governance and a fellow at the Rutgers Center for Corporate Law and Governance. Until June 2019,
he was executive director of The Conference Board ESG Center, where he continues to contribute as a senior fellow.

Before joining The Conference Board in 2016, Chia served as assistant general counsel and corporate secretary of Johnson & Johnson. Previously, he was assistant general counsel for corporate of Tyco International and practiced law at Simpson Thacher & Bartlett and Clifford Chance, both in New York and Hong Kong.

Chia has held a number of central leadership positions in the corporate governance field, including chair of the board of the Society for Corporate Governance, president of the Stockholder Relations Society of New York, and member of the NYSE corporate governance commission. He is a member of the corporate laws committee of the American Bar Association and the National Asian Pacific American Bar Association.

Chia has received numerous awards and recognitions in corporate governance and has frequently appeared in the news media, including CNN, NPR’s Marketplace, the Wall Street Journal, the Financial Times and the New Yorker.

Chia received an AB degree from Dartmouth College and a JD degree from the Georgetown University Law Center. He lives in Princeton, New Jersey with his wife and their four children. He is a trustee of the Historical Society of Princeton and the McCarter Theatre Center.

Lucy Fato

AIG

Lucy Fato is executive vice president and general counsel of AIG where she oversees the global legal, compliance and regulatory functions. Prior to joining AIG, she was managing director, head of the Americas and general counsel of Nardello & Co, a global private investigative firm, where she remains on the board.

Previously, Fato was executive vice president and general counsel of McGraw Hill Financial (now S&P Global), and before that she was vice president, deputy general counsel and corporate secretary at Marsh & McLennan Companies. She began her legal career at Davis Polk & Wardwell where she spent 14 years, including five as a partner in the capital markets group.

In 2009 Fato was inducted into the YWCA-NYC Academy of Women Leaders. In 2015 she was a business honoree of Randall’s Island Park Alliance and was named by Ethisphere as one of the Attorneys Who Matter in 2015 and 2017 for her dedication to furthering corporate ethics. In
2017 she was recognized as an Outstanding Woman in the Legal Profession by the New York County Lawyers Association. In 2018 she was included in NACD Directorship’s list of the 100 most influential people in the boardroom community, including directors, corporate governance experts, regulators and advisers.

Fato is a frequent speaker on such topics as corporate governance, risk & crisis management and legal and compliance operations and best practices. She graduated from the University of Pittsburgh with a BA in business and economics and received her JD from the University of Pittsburgh School of Law. She is admitted to the state bars of New York and California.

Matt Geekie

Graybar

Matt Geekie is senior vice president, secretary and general counsel for Graybar, a distributor of electrical and communications products and
related supply chain management and logistics services. Geekie is responsible for corporate governance and the legal and risk management functions of the firm and is a member of Graybar’s board of directors. He also serves as chair of Graybar’s Canadian subsidiary.

Geekie started his career as a trial lawyer at St Louis firm Moser & Marsalek, before moving in-house to Siegel-Robert and later Blackwell Sanders Peper Martin (now Husch Blackwell). From there, he was appointed assistant general counsel at Emerson, and then served as general counsel and secretary at XTRA Corporation, a Berkshire Hathaway subsidiary. He joined Graybar in 2008 as deputy general counsel and was elected to his current position later that year.

Geekie’s broad-based legal experience includes corporate law, corporate governance, commercial and securities law, Sarbanes-Oxley, ethics, intellectual property, product liability, export/import law and risk management. Under
his leadership, Graybar achieved national recognition for excellence in corporate governance in 2015 and 2016.

A native of St Louis, Geekie received both his law degree and undergraduate degree from Saint Louis University. He serves as board chair of The Oasis Institute and sits on its executive and finance committees. He is also chairman of the board of the St Louis Community Foundation, chair of its executive and gift acceptance committee and a member of its finance and audit committee, and serves as a member of the St Louis Zoo Association board and its government relations, investment, finance and major gifts committees.

Carol Strickland

Trireme Energy Holdings

Carol Strickland serves as a director of Trireme Energy Holdings, the holding company for Terra Firma’s US renewable energy assets, and is a member of its nominating and remuneration committee.

From 2008 until 2018 when the company was sold, she served as chief administrative officer of EverPower Wind Holdings, a private wind energy company with 752 MW of spinning assets and a
3.5 GW development pipeline. At EverPower she oversaw the corporate secretarial function, HR,
IT, real estate, corporate policies & procedures
and insurance. Previously, she was corporate secretary and chief of staff of US Trust Corporation, a wealth management firm now owned by Bank
of America. She also headed the US Trust Foundation and the Community Reinvestment Act committee at the bank.

Strickland is a former chair of the Society for Corporate Governance and a past chair of the society’s national conference and budget committees, as well as a former president of its New York chapter. In addition, she is a fellow of the National Association of Corporate Directors and has more than 40 years of experience in the corporate governance arena.

She is a graduate of Skidmore College and New
York University’s Wagner Graduate School of
Public Service. She has served on the board of numerous non-profit organizations including Greenwich House, Martha Graham Dance
Company, Counterpoint Theatre and the Paul Taylor Dance Company.

She was inducted into the YMCA Academy of Women Achievers in 1997 and currently serves on the Skidmore College Presidents Society Advancement Council.

Paul Washington

Conference Board ESG Center

Paul Washington is executive director of The Conference Board ESG Center. Before joining The Conference Board, he served as senior vice president, deputy general counsel and corporate secretary of Time Warner, as well as chief of staff for the company’s chair and CEO after holding positions of assistant general counsel and litigation counsel.

Prior to working at Time Warner, Washington practiced law at Sidley & Austin and served as vice president and corporate secretary of The Dime Savings Bank of New York. A long-time active member of The Conference Board, from 2013 to
2014 he chaired its advisory board on corporate/investor engagement.

Washington’s career also includes extensive work in public service. He served as a law clerk for former US Supreme Court associate justices William Brennan and David Souter, and for circuit court judge David Tatel. In addition, he was the principal staffer on tax matters for former congressman Stanley Lundine and, later, his principal speechwriter when Lundine served as New York’s lieutenant governor.

Washington has served on the boards of numerous cultural, civic and professional non-profit organizations, including the Legal Aid Society and American Folk Art Museum. He is also a former chair of the Society for Corporate Governance. He is a resident fellow at the Fordham University School of Law, where he has taught corporate governance for more than a decade.

Proxy preview No going back on ESG and engagement

The US 2020 proxy season looks set to feature investor pressure on board diversity and political spending amid a variety of ESG topics – and uncertainty over how the SEC will play umpire on some proposals

The US 2020 proxy season looks set to feature investor pressure on board diversity and political spending amid a variety of ESG topics – and uncertainty over how the SEC will play umpire on some proposals. Ben Maiden reports

Industry professionals in the US foresee no turning around from the direction companies and investors have been headed in recent years, with a growing number of shareholder proposals in 2020 on issues under the ESG umbrella. In terms of which proposals end up in votes at AGMs, there is an expectation that the trend toward negotiating the withdrawal of many environmental and other disclosure-based proposals will continue, but also concern about a new SEC approach to deciding which proposals can be excluded.

Brigid Cremin Rosati, a director of business development at Georgeson,
is among those anticipating more political spending/lobbying
disclosure proposals ahead of the
2020 US presidential election. No
such proposals received majority support in 2017 or 2018, but three did so at S&P 1500 companies in 2019, she notes. A variety of sponsors are bringing political spending/lobbying proposals, including unions and public pension funds but also a growing number of conservative groups, according to Rosati.

Board diversity has been a focus of recent proxy seasons and industry professionals anticipate a continued increase in proposals and engagement in 2020. The drive for greater gender diversity has been fueled in part by several large institutional investors. For example, State Street Global Advisors (SSGA) reports that as of June 30, 2019, 43 percent of the 1,350 companies targeted by SSGA’s Fearless Girl campaign had either added a female director to their board or committed to doing so.

SSGA now plans to take a tougher approach to companies that haven’t responded. The firm has said that in 2020 it will vote against the entire nominating and governance committee ‘if we have concerns about the lack of gender diversity for four consecutive years and are unable to engage in productive dialogue.’

PJT Camberview partner Krystal Gaboury Berrini says a confluence of factors is bringing the E and S of ESG issues to the fore in terms of shareholder proposals. These include the Task Force on Climate-related Financial Disclosures (TCFD) gaining momentum, she says, adding that this will gain an additional boost when TCFD-based reporting becomes mandatory in 2020 for the more than 2,300 signatories to the UN-supported Principles for Responsible Investment.

The focus on human capital management will also continue in 2020, Rosati says. Other issues potentially featuring in proposals include gun control and linking executive compensation to ESG-based metrics, she adds.

Getting onto the ballot
A notable feature of the 2019 proxy season has been the extent to which companies were willing and able to negotiate over shareholder proposals such that they were withdrawn. According to Georgeson, 386 E and S proposals were submitted in 2019 but only 160 – 41 percent – were ultimately voted on at AGMs. Meanwhile, 332 governance-related proposals were filed and 236 (71 percent) of them reached a vote.

Peter Kimball, head of advisory and client services for North America at
ISS Corporate Solutions, says governance proposals are less likely to be withdrawn than environmental ones because proponents of the latter – and firms – tend to have room to negotiate the level of disclosure. More firms are focused on making disclosures about sustainability, human trafficking and other E and S issues for their own interests, regardless of investor pressure, he adds, noting that this, combined with a growing number of E and S shareholder proposals, will lead to even more companies willingly negotiating as they’re already
making disclosures.

According to Berrini, the high rate of withdrawals among E proposals reflects that companies are already taking action on sustainability metrics they haven’t previously disclosed. The increase in off-season engagement also helps promote negotiations, she adds.

These high rates of successful negotiation are expected to continue. But getting shareholder proposals onto the ballot faces a new wrinkle going into 2020 following the announcement in September by the SEC’s division of corporation finance of a revised approach to handling companies’ requests to exclude shareholder proposals. The announcement has prompted confusion and concern among corporate attorneys, in-house teams and investors, all of whom are unsure how the agency will act in practice. They fear a wave of niche shareholder proposals, a lack of clear guidance and being forced into litigation to settle disputes.

The key aspects of the statement are the emphasis the division puts on its option not to make a decision on excluding a proposal, and its intention to respond orally in some cases. Division staff will continue to monitor correspondence and provide informal guidance to firms and proponents as appropriate. If a company wants to exclude a proposal, the division will let the proponent and the company know whether it concurs, disagrees or declines to state a view.

But from the 2019-2020 proxy season, the division may respond orally instead of in writing to some no-action requests. ‘The [division] intends to issue a response letter where it believes doing so would provide value, such as more broadly applicable guidance about complying with Rule 14a-8,’ officials write.

If a company wants to exclude a proposal and the division doesn’t state a view, the only option for a determined shareholder proponent is to go to court, said Jonas Kron, senior vice president and director of shareholder advocacy at Trillium Asset Management, shortly after the statement was released. But he added that the effect of the division’s statement will depend on how often it declines to take a view.

‘In the current climate, where there are a growing number of shareholder proposals, companies need a referee more than ever,’ said Betty Moy Huber, counsel with Davis Polk & Wardwell, at the time. The SEC did not respond to a request for comment.