Corporate Governance Symposium

A daylong symposium on corporate governance, held at the University of Delaware on March 7, focused on issues identified as critically important to boards of directors and investors with the topic of gender diversity singled out for special consideration by both keynote speakers.

The 2017 symposium was hosted by the Universitys John L. Weinberg Center for Corporate Governance and co-hosted by the UD Department of Finance.

The event began with a talk by the John L. Weinberg Distinguished Speaker, Ronald P. OHanley, president and CEO of State Street Global Advisors (SSGA). SSGA is the investment management arm of State Street Corporation and a global leader with $2.4 trillion in assets under management.

The talk, titled Long-Term Value Begins at the Board: The Power and Potential of Active Asset Stewardship, centered on SSGAs focus on effective, independent board leadership.

OHanley discussed the need for boards to resist pressures to sacrifice long-term value creation for short-term results, the crucial role of asset managers in encouraging good corporate governance and the need to incorporate issues of environmental and social sustainability into governance.

The symposium occurred the same day which happened to be the eve of International Womens Day that SSGA publicly called on the 3,500 companies in which it invests its clients money to increase the number of women on their corporate boards. In his Weinberg Center talk, OHanley emphasized that effort by SSGA, saying that having more diverse boards has been proved to benefit companies.

We think boards that embrace a broader range of perspectives are more likely to avoid groupthink and achieve better outcomes, he told the symposium audience. While we believe in and support board diversity on principle, we have been especially focused on gender diversity for a simple reason: Because of the compelling research connecting greater gender diversity with better performance.

OHanley cited a Conference Board report suggesting that the new perspectives women directors bring to a board is the main reason for improved performance.

Notwithstanding this growing evidence, there are still far too few women serving on corporate boards, he said.

Its not only at the board level where gender diversity matters. Evidence is also mounting that shows companies with higher levels of gender diversity in their senior leadership outperform companies with less diversity.

The theme of corporate boards and gender diversity was continued in a luncheon address by Joann S. Lublin, management news editor for The Wall Street Journal.

Lublin, a Pulitzer Prize-winning journalist and one of the Journals first women reporters, is the author of the book Earning It: Hard-Won Lessons from Trailblazing Women at the Top of the Business World.

The book profiles more than 50 executive women who broke the corporate glass ceiling, and in her talk at UD Lublin particularly focused on some of their accounts of serving or unsuccessfully seeking to serve on corporate boards. Despite their own career successes, many women found in the past that they were not even considered for seats on boards.

Today, Lublin said, The picture is a lot brighter, though not perfect.

With more women serving on boards, they are in a position to open doors for others when directorships become available, Lublin said. But still, she noted, four out of five board seats at Fortune 500 companies are occupied by men, and too many male directors fail to recognize the benefit of adding women to their boards.

Many executive women still feel excluded from corporate boards, Lublin said, calling for a concerted effort by men and women to implement change and create more gender diversity to benefit companies and investors.

Diversity of thought leads to diversity of outcome, she said.

Panel discussion on governance issues

Following OHanleys opening talk, a panel that included representatives from the corporate and investor communities discussed current governance issues.

Each of the nine panelists shared what he or she considered to be of critical importance to boards and investors in 2017. The discussion was moderated by Charles M. Elson, Edgar S. Woolard Jr. Chair in Corporate Governance, director of the Weinberg Center and professor of finance at UD.

Topics raised by the panel included the Commonsense Principles of Corporate Governance, a document issued in July by a group of 13 CEOs from some of the largest public companies and leaders from asset managers and pension and mutual funds, setting out guidelines for best practices in how public companies should be run.

Panelists also discussed the more recent release of a set of comprehensive stewardship and governance principles by the Investor Stewardship Group, a consortium of large institutional investors and asset managers that in aggregate invest over $17 trillion in the U.S. equity markets.

Speakers on the panel cited the importance of having members of boards of directors represent a diversity of expertise and background. In recent years, and especially since the 2008 financial crisis, boards have been seen as playing a more significant role than they once did.

Boards today are viewed as partners with company management, they said, not just monitoring and overseeing corporate actions but actively participating in setting business strategy.

The panel consisted of OHanley; Lublin; Amy Bilbija, managing director, Strategic Governance Advisors; Glenn Booraem, principal of the Vanguard Group Inc. and treasurer of each of the Vanguard Funds; H. Rodgin Cohen, senior chairman, Sullivan and Cromwell LLP; Abe M. Friedman, CEO, CamberView Partners; Brian L. Schorr, partner and chief legal officer, Trian Fund Management LP; Linda E. Scott, managing director and associate corporate secretary, JP Morgan Chase and Co.; and Myron T. Steele, partner, Potter Anderson and Corroon LLP, and former chief justice of the Delaware Supreme Court.

Best academic paper competition

Also at the symposium, three academic papers that had been selected as finalists from numerous submissions in response to a Call for Papers were presented, and the Best Paper award was announced.

The award was presented for Captured Boards: The Rise of Super Directors and the Case for a Board Suite, by Kobi Kastiel of the Harvard Law School Program on Corporate Governance and Yaron Nili of the University of Wisconsin Law School.

The other finalists were The Golden Leash and the Fiduciary Duty of Loyalty, by Greg Shill of the Harvard Law School Program on Corporate Governance, and Affiliated Corporate Donations and Director Independence, by Ye Cai of Santa Clara University, Jin Xu of Virginia Tech and Jun Yang of Indiana University.

About the Weinberg Center

The John L. Weinberg Center for Corporate Governance, part of the University of Delawares College of Arts and Sciences, was established in 2000.

It is one of the longest-standing corporate governance centers in higher education and the only center in the state of Delaware, which is the legal home for most U.S. corporations.

The Weinberg Center provides a forum for business leaders, the legal community, academics, practitioners, students and others interested in corporate governance to meet, interact, learn and teach, with the goal of positively impacting and improving the field of corporate governance. It also brings together professionals in corporate governance, law and accounting for conferences and symposia on critical issues.

In welcoming the audience of more than 250 to the 2017 Corporate Governance Symposium, Myron Steele, chair of the centers advisory board, said the center plays an important role as a forum for rational discourse about issues in corporate governance, past, present and future.

Article by Ann Manser; photos by Duane Perry