Corporate Governance Awards winners

Winners' summary

Rising star
Irving Gomez - Intel
Rick Hansen - Chevron

Most innovative CSR disclosure
Timberland

Most effective shareholder communication
Intel

Best legal team in an M&A transaction
Kraft Foods

Best proxy statement
UnitedHealth

Corporate governance team of the year (small to mid-cap)
Constellation Energy

Corporate governance team of the year (large-cap)
Best Buy

Lifetime achievement
Fred Krebs - Association of Corporate Counsel

Governance professional of the year (small to mid-cap)
Steve Shapiro - Cole Taylor Bank

Governance professional of the year (large-cap)
Carol Ward - Kraft Foods

Best overall governance, compliance and ethics program (small to mid-cap)
Pride International

Best overall governance, compliance and ethics program (large-cap)
Cisco

Why the winners won

Rising star
Irving Gomez - Intel
Rich Hansen - Chevron

Traditionally the most hotly contested category, this year’s rising star award is no different. For the third year in a row the judges were unable to split the two winners, so the prize is once again shared between two outstanding candidates.
Gomez is an assistant secretary and senior attorney in Intel Corporation’s corporate legal group. Perhaps his most outstanding achievement is his contribution to making the company’s groundbreaking virtual meeting and online voting system a reality. This process is now being widely imitated by other issuers.
Hansen has helped Chevron’s corporate governance group systematize internal governance processes and enhance the group’s ability to rapidly consider and address developments in governance, including changes in federal and state law, SEC rules, exchange listing requirements, corporate governance standards and proxy advisory firm voting guidelines. He is extensively published and is a regular speaker at governance events, 
despite his relatively short time in the profession.

Most innovative CSR disclosure
Timberland

A standout winner in this category, Timberland ‘presents an innovative approach to traditional communication of social and environmental performance’. The company made a deliberate change in strategy and 
execution in its current disclosure to ensure it reaches new and diverse stakeholder audiences.
The company does an outstanding job of tying CSR performance to ongoing financial performance. Conference calls regarding CSR and company performance are conducted on a quarterly basis, allowing clear and ongoing assessment of success of the program. Analysts and the public have access to the most comprehensive analysis of the impact various CSR factors have on performance across a range of time periods.
Disclosure documents are available in a range of formats and venues, including many retail outlets both in the US and internationally.

Most effective shareholder communications
Intel

The judges were impressed with Intel’s virtual annual meeting, in addition to its small in-person annual event. The simple and effective online voting platform makes voting cheap and easy. The system allows for broader 
participation and voting, especially among geographically diverse retail investors. Another important plus is the significant reduction in carbon footprint achieved by reducing travel costs for analysts, management, directors, journalists and other stakeholders.
To ensure stockholders have the most up-to-date information on the company’s business prior to voting, Intel holds an institutional investor/analyst meeting a week prior to the annual meeting. Those presentations are archived on the company’s website and linked to the annual meeting website. Intel also boasts one of the most advanced and multi-faceted social media disclosure programs of any US corporation.

Best legal team in an M&A environment
Kraft Foods

Described as possibly the most legally and logistically complicated cross-border US/UK takeover in history – and certainly the largest of its kind in the consumer sector – the judges were impressed by the carefully crafted filings and the well-orchestrated disclosure on both sides of the Atlantic.
In addition to significant shareholder unrest during the initial stages, particularly on behalf of Cadbury shareholders, the company had to contend with the UK’s Takeover Panel and a lack of clear precedent on which to base the deal.
Throughout the process, the Kraft legal team ‘showed the utmost dedication and professionalism, functioning simultaneously as both a highly skilled in-house legal department and a boutique M&A firm.’

Best proxy statement
UnitedHealth

Possibly the most substantive compensation discussion and analysis (CD&A) of any proxy statement in the country, the document provides a surprisingly frank discussion of nearly all areas important to shareholders.
The judges were particularly impressed with the disclosure of performance measures, notwithstanding the fact they were retrospective. ‘The UnitedHealth CD&A gives the clearest explanation of the relationship between performance and pay that I have seen to date,’ highlights one judge. ‘The unique process of engaging shareholders on a semi-annual basis to solicit input on what they would like to see in the disclosures is obviously paying dividends,’ says another.

Corporate governance team of the year (small to mid-cap)
Constellation Energy

In the face of an extremely tough regulatory environment, and more than a little controversy, the team at Constellation completed the sale of $4.5 billion of its nuclear generation business to overseas buyer EDF, essentially creating a 50/50 joint venture.
Under very tight deadlines, other operations, including those of Baltimore Gas and Electric – requiring coordination between the two groups’ boards – were ring fenced in order to satisfy strict regulatory requirements. In 
addition, the governance team oversaw the acquisition of two gas-fired generation plants in Texas in May 2010.
Impressively, all this was achieved during the same period in which the firm implemented notice and access for the first time in connection with the delivery of proxy materials for the 2010 annual meeting. Constellation’s careful and intelligent management allowed it to maintain voter representation while simultaneously saving approximately $300,000.

Corporate governance team of the year (large cap)
Best Buy

A standout winner, Best Buy’s team was described as ‘the ultimate all-rounder’. The passionate, professional and small team, led by Todd Hartman, racked up a list of remarkable achievements throughout the 2009/2010 time period, not least of which was managing considerable board succession. This included the appointment of a CEO, four new directors and the retirement of three long-term directors. In addition, the company took great steps in developing global anti-corruption and compliance systems by creating a new reporting network.
Perhaps most significantly, Best Buy made great advancements in shareholder communications and transparency. The judges were impressed by the multi-channel dialogue with stakeholders that includes new technologies such as a hybrid annual meeting and virtual shareholder forum.

Life achievement
Fred Krebs

All in-house lawyers owe Krebs a debt of gratitude. While he may not be the most well-known man in the industry, he has made significant behind-the-scenes contributions to the advancement of the in-house counsel role and to the development of corporate governance in a broader sense.
Krebs was president of the Association of Corporate Counsel (ACC), the largest organization of corporate lawyers in the world, for almost 20 years. In announcing his resignation, Patricia Hatler, ACC board chair and also 
Nationwide Insurance and Financial Services’ executive vice president, chief legal and governance officer, wrote: ‘Fred has been an invaluable leader for ACC. The entire in-house community is indebted to him for his commitment and his contributions to the profession and the association.’
During his tenure as president of the ACC, Krebs made many significant contributions to the governance landscape. He advocated strongly for protection of the attorney-client privilege and multi-jurisdictional practice reform, and created powerful professional opportunities for members such as the mini-MBA, Corporate Counsel University and CLO ThinkTanks.
Krebs and the ACC elevated awareness of the importance of the in-house counsel role and provided opportunities for general counsel to become the focal point of strategic governance with listed companies. His work has improved information flow to management, board members, investors and the broader public about important legal and governance issues facing US companies. By doing so, he has improved the way companies are managed, in turn improving shareholder value and the lives of in-house counsel everywhere.

Governance professional of the year (small to mid-cap)
Steve Shapiro - Cole Taylor Bank

In a difficult year for smaller financial institutions, Shapiro orchestrated a range of changes that not only protected the company but also advanced the performance of the board and management. He successfully defended the company in a class action lawsuit and guided a new CEO and CFO through the complicated art of investor relations, which greatly improved shareholder communications.
In addition, by reviewing the system and strategy for managing outside counsel, Shapiro significantly reduced the company’s legal budget.

Governance professional of the year (large-cap)
Carol Ward - Kraft Foods

Ward took a leading role in negotiating and overseeing one of the largest deals of the year: Kraft’s $18 billion acquisition of Cadbury. At the same time, she was responsible for the related financing transaction and the company’s ongoing disclosure requirements.
The need to satisfy conflicting US and UK legal disclosure requirements was a challenge Ward managed through the annual report and proxy season. For the second year running she also led the team that implemented the notice and access process for distributing proxy materials to investors. This created significant cost savings for the company and shareholders and yet had little or no impact on voter turnout. In addition, she was responsible for overseeing the orientation of two new board directors, who were elected during the merger process.
As the judges said: ‘Carol had one of the busiest and most challenging years of any corporate secretary but dealt with it in the most professional manner possible. The sheer size of what she achieved is incredible.’

Best overall governance, compliance and ethics program (small to mid-cap)
Pride International

A runaway winner in this category, Pride made what some judges felt was the best response to shareholder concerns of any company they had seen and has gone from below-average governance practices to being a market leader in less than a year.
During the previous annual meeting, several directors – including the chairman – received significantly high ‘no’ or ‘withhold’ votes. The company immediately engaged shareholders to discuss their concerns. These 
discussions led to a raft of governance changes including: increased independence of consultants; improved benchmarking of policies and practices to peers; extensive analysis of and disclosure regarding potential use of poison pills; separation of the roles of chairman and CEO; and overhauling compensation practices and policies.
‘The wide-ranging steps it took in terms of governance reform, and the short timeframe in which the changes were made, is impressive. It proves that sometimes such deficiencies are not just problems but real 
opportunities for improvement,’ cited one judge.

Best overall governance, compliance and ethics program (large-cap)
Cisco

Just as the global marketplace and potential business risks are ever-
changing, so too must an internal governance, compliance and ethics function strive for continuous improvement and responsiveness. Over the last year, the Cisco team has made infrastructure changes to improve integration across the governance and learning functions, and has created a centralized policy management function. The ethics office continued to build on a robust communications and training program with the addition of new videos for managers and use of internal social media.
‘Not only does Cisco exhibit outstanding internal compliance but it is also among the best around in communicating its processes to shareholders, the media and regulators,’ highlighted one judge. ‘It truly understands that great governance can lead to great business.’