On Governance

“Directors should be accountable to shareowners and management accountable to directors.”

— California Public Employees Retirement System, Global Principals of Accountable Corporate Governance, Core Principals., 2009

“Everywhere shareholders are re-examining their relationships with company bosses — what is known as their system of ‘corporate governance.’ Every country has its own distinct brand of corporate governance, reflecting its legal, regulatory and tax regimes… The problem of how to make bosses accountable has been around ever since the public limited company was invented in the 19th century, for the first time separating the owners of firms from the managers who run them…”

— The Ecomomist, January 29, 1994

“A director’s greatest virtue is the independence which allows him or her to challenge management decisions and evaluate corporate performance from a completely free and objective perspective. A director should not be beholden to management in any way.…”

— Robert Rock, Chairman of the National Association of Corporate Directors, 1996

“Harvard University found that portfolios of companies with strong shareowner-rights protections outperformed portfolios of companies with weaker protections by 8.5% per year.”

— Lucian Bebchuk, Alma Cohen, and Allen Ferrell, “What matters in Corporate Governance,” 2004

“Even amid the global financial crisis, executive compensation remains a central aspect of investor concern. Many companies continue to pay their top executives soaring amounts of compensation even when performance ranges from mediocre to downright dismal…”

— “Pay Dirt” Glass Lewis & Co 2008