Millstein Center Announces Launch of First Forum for Independent Chairmen of North American Corporate Boards
New Haven, Conn., June 4 2008 – The Millstein Center for Corporate Governance and Performance at the Yale School of Management today announced the formation of a first-ever peer organization of independent chairmen of North American corporate boards. The kick-off roundtable for the “Chairmen’s Forum” will take place on October 7 at the Yale Club of New York City. The Millstein Center will serve as secretariat to the Forum.
Harry Pearce, chairman of Nortel Networks, is the founding chair of the Forum. The project is co-sponsored by Spencer Stuart, the global director and executive search consulting firm. A pilot meeting convened by the Millstein Center in February laid groundwork for the October event, which is expected to draw independent leaders from large U.S. and Canadian corporations. The Forum is intended for independent chairmen to share peer experiences; test opportunities for collective action on market issues; and form the core of a global network of chairmen organizations. Reports will be issued as appropriate.
Advocates contend that an independent chairman can strengthen a board’s leadership in overseeing a company’s CEO and management, and can open a conduit for dialogue with investors. So far, an estimated 35% of S&P 500 corporations have moved to install a separate chairman rather than combining the job with that of the CEO. Some 13% are independent non-executives, according to Spencer Stuart. However, the Millstein Center projects a significant medium-term upward trend in the number of companies taking this option. Separate chairs have become commonplace in most other markets. Recently, high-profile boards of U.S. companies such as Washington Mutual and Citigroup have chosen to divide the chairman and CEO jobs between two individuals. Canadian boards, responding to shareholder requests, have begun converting to independent chairmen. And shareholders at ExxonMobil last week, for the second year in a row, produced a strong vote in favor of moving that company to the independent chair model.
Pearce intends the inaugural Chairmen’s Forum to consider endorsing policy guidance on the role of an independent chair in a North American context. The Millstein Center is drafting the statement with oversight from Pearce and Ira M. Millstein, senior associate dean for corporate governance at the Yale School of Management and senior partner at Weil, Gotshal & Manges.
“The Chairmen’s Forum will help anchor the model of independent board leadership in real time experience and performance,” said Pearce. “The time is right for the growing number of those actually doing the job to build knowledge on how independent leadership can best work.”
“Board directors will benefit from seeing exchanges amongst real world independent chairs who contribute to performance while avoiding pitfalls,” said Millstein. “Independent chairmanship may not be the right way to go for every company. But the Chairmen’s Forum will help make it a successful choice for those that take that route.”
As part of its mission to incubate needed market institutions, the Millstein Center also recently announced creation of the Conference of Fund Leaders, a permanent body dedicated to peer collaboration among independent chairmen and lead directors of mutual funds.
The Millstein Center for Corporate Governance and Performance at the Yale School of Management is a leading global resource for testing, challenging and advancing the premise that corporations should and can serve society. The Center pursues its mission by convening events; sponsoring empirical research; generating policy briefings; building market capacity by developing training, databases and institutions; and teaching and student interaction.
Harry Pearce, +1 248 647 8122, email@example.com
Ira Millstein, +1 212 310 8100, firstname.lastname@example.org
Stephen Davis, project director at the Millstein Center, +1 203 432 9689, email@example.com.