Kellogg School keeps its focus on corporate governance
Annual conference brings experts, ideas for two-day summit By Matt Golosinski
5/1/2004 - The 13th annual Kellogg School Corporate Governance Conference proved once again that Kellogg remains on the cutting edge in thinking strategically about this essential aspect of business.
The May 3 to 4 event continued the tradition demonstrated by Kellogg in making corporate governance one of the areas of focus at the school. Bringing more than 200 top board directors to the James L. Allen Center, the conference debated many important issues surrounding governance, including the impact of adverse publicity on the decisions of compensation committees; the growing liabilities of board members; the implications of shifting power from the CEO toward independent directors and shareholders; and the impact of the Sarbanes-Oxley legislation in changing the role and responsibility of audit committees.
In addition, at the annual event Board Alert bestowed Outstanding Directors Awards on seven esteemed board members: Barbara T. Alexander, executive fellow, Joint Center for Housing Studies, Harvard University; Norman R. Augustine, chairman of the executive committee, Lockheed Martin; William Bowen, president, The Andrew W. Mellon Foundation; Dr. Michael Brown, professor of molecular genetics and internal medicine, and Distinguished Chair of Biomedical Sciences, University of Texas, Southwestern Medical Center; Barbara Hackman Franklin, president and CEO, Barbara Franklin Enterprises; Robert H. Jenkins, retired chairman and CEO, Sundstrand Corp.; and Claudine Malone, president and CEO, Financial & Management Consulting Inc.
During the two-day conference, several panel discussions presented the latest thinking about governance trends, as well as a retrospective on corporate jurisprudence of the Delaware Supreme Court, whose decisions have a wide-ranging impact on corporate governance.
While panelists generally embraced the Sarbanes-Oxley law as a positive step in helping balance the power in the boardroom, some experts questioned whether the law would curb innovation in American business.
“We are on the verge of having the best-governed, worst-managed corporations in the world. We need a more entrepreneurial approach now more than ever, especially because of the looming threat of China,” said Kenneth Langone, chairman of Invemed Associates LLC, and co-founder of Home Depot.
Langone also stated that the biggest challenges facing boards involved a “lack of courage, not a lack of power, and Sarbanes-Oxley is not going to change that one bit.”
To this point, some experts applauded the trend requiring boards to meet in executive session without the CEO present, encouraging directors to speak more freely and ask more “what if” questions. In addition, increased publicity has made the general public’s reaction to business leadership a part of directors’ decision-making process. And others believe that this legislation will lead to more questioning of the CEO.
Directors now must consider how a board’s decisions will play in the pages of the nation’s leading newspapers, according to some conference participants.
“Kellogg has always been ahead of the curve with our interest in board governance,” said Kellogg School Dean Emeritus Donald P. Jacobs. “We have long recognized the importance of this area and have always placed a lot of attention on governance, and we will continue to do so, leading the way for others.”
This conference originated in 1991 over a lunch conversation between Don Perkins, retired chairman of Jewel Companies Inc., and Dean Jacobs, where they discussed the evolving changes in governance among independent directors, senior management and institutional investors.