'Chairmen's Forum' Convened by the Millstein Center Issues Policy Briefing Linking Independent Chairmanship to Restoration of Market Trust; Group Gathers Endorsements for Voluntary Adoption of Independent Chairmanship

New Haven, Conn., March 30, 2009—A group of more than 50 prominent current and former corporate board chairmen, directors, chief executives, investors, and governance experts has endorsed a policy briefing issued today calling on publicly traded companies to separate the roles of chairman of the board and chief executive officer.

The policy briefing was issued by The Millstein Center for Corporate Governance and Performance at the Yale School of Management and The Chairmen’s Forum, a peer organization of independent chairmen of corporate boards convened by The Millstein Center last year. The briefing documents the global trend of increasing independence of corporate boards, outlines why ensuring the independence of a board chair is a key factor in good corporate governance and the protection of shareholder interests, and notes that in the context of the current economic crisis, the establishment of an independent chairmanship by corporate boards is an important element in restoring market trust.

While there has been an increasing trend of U.S. public companies separating the roles of chairman and CEO over the past decade, the U.S. still lags behind other countries in implementing this reform. More than 60% of the S&P 500 companies have boards that are chaired by their chief executive. In the UK, only 5% of the FTSE 350 companies have a combined role. Additionally, a 2003 study revealed nearly two-thirds of 300 surveyed Canadian public companies had separated the chairman and CEO roles.

“The current economic crisis has appropriately fueled strong support among shareowners, directors, the public and policy makers for more robust oversight of management by independent-minded boards, and more management accountability to investors,” said Harry Pearce, who chairs the Forum and has a track record of service as non-executive chairman and director at several public companies. “The leaders who have endorsed the call for independent chairmanship have observed first-hand the potential for conflicting interest when a single person acts as both chair of a company’s board and as its CEO. Addressing this issue is fundamental to enhancing corporate governance and we encourage others to join us in urging public companies to adopt the independent leadership model.”

“The independent chair model has been adopted successfully by many companies in many regions of the globe as a means to further ensure and empower board independence,” said Ira M. Millstein, Senior Associate Dean for Corporate Governance at the Yale School of Management and Chair of the Millstein Center. “The time has come for the independence of a board’s chairman to become the default. We believe voluntary adoption of this model is the best way of accelerating such reform in board rooms throughout North America and have established a process for tracking progress and considering additional initiatives to encourage adoption of our suggestions.”

“Too many boards are still led by the CEO — the one person who is obviously conflicted in fulfilling the essential duty of providing oversight and monitoring the CEO and senior management team,” said Gary Wilson, Former Chairman of Northwest Airlines Corporation, current director at Yahoo! and CB Richard Ellis and participant in the Chairmen’s Forum. “Separating the roles of chairman and CEO is the critical missing piece in the evolutionary path of boards and directors towards more independence, engagement, and monitoring and if the voluntary approach doesn’t generate sufficient progress, I will suggest that the Forum work with the stock exchanges to adopt a listing rule.”

Specifically, the Chairmen’s Forum is calling for public companies to appoint an independent, non-executive chairman of the board upon succession of any combined chairman and CEO. In exceptional circumstances where specific company conditions may warrant a different approach, the Chairmen’s Forum believes boards should explain to company shareowners why, in their view, combining the chairman and CEO responsibilities in one person, or naming a non-independent chair, represents a superior approach to optimizing shareowner value.

While pursuing voluntary adoption of this model, the group has outlined a process that could lead to stronger approaches if boards fail to respond. In addition to securing endorsements from additional market institutions and individual leaders for the recommendations in the policy briefing, the Chairmen’s Forum will track and publicly disclose the take-up of independent chairmanship among North American listed companies. The group intends to convene a roundtable in July 2009 to assess progress and, if appropriate, could suggest further steps including calling on the New York Stock Exchange and Nasdaq to adopt listing rules on the matter.

The policy briefing, entitled Chairing the Board: The Case for Independent Leadership in Corporate North America, finds that having an independent chairman is a means to ensuring chief executives are accountable for managing public companies in close alignment with the interests of shareholders, while recognizing that managing a public company board is a separate, time intensive responsibility. The report notes that the differences between a lead director and a non-executive chairman are few, but paramount. Splitting the roles of CEO and chairman is not a panacea for ensuring board independence, but independent board leadership is a critical element.

For a complete list of endorsers, a copy of the policy briefing, and more information about this initiative and how you can support it, please visit: http://millstein.som.yale.edu/chairmensforum.shtml.

About The Millstein Center for Corporate Governance and Performance at the Yale School of Management
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.

About the Chairmen’s Forum
Founded on February 26, 2008, the Chairmen’s Forum is an organization comprised of non-executive chairmen of corporate boards whose companies are incorporated and stocks are traded on exchanges in the United States and Canada. Participants meet for the purpose of addressing steps that enhance the accountability of corporations to owners, discussing matters of common interest, promoting deeper understanding of independent board leadership practices and reaching out to the wider market on effective practices of board chairmanship. The Chairmen’s Forum intends to help create an international hub of national and regional forums of non-executive chairmen to encourage peer exchanges worldwide.

The founding Chairman is Harry Pearce, Non-Executive Chairman of Nortel Networks Corporation and Chairman of MDU Resources Group, Inc. For more information visit: http://millstein.som.yale.edu/chairmensforum.shtml.

Stephen Davis, senior fellow, Millstein Center, +1-203-432-9689 or +1 617-230-2277; stephen.m.davis@yale.edu