Best overall governance, compliance and ethics (large-cap): Microsoft.
Often, it’s not what you do but how you do it that grabs people’s attention. Transparency has always been an integral part of Microsoft’s governance, compliance and ethics programs, but the company has continued to evolve to meet the needs of its stakeholders.
Last year, some of the tech giant’s innovations regarding governance and compliance were so well received that it emerged as the winner of the best overall governance, compliance and ethics accolade at the Corporate Governance Awards 2011.
Microsoft has always had a strong reputation for transparency when it comes to disclosures – it was one of the first big companies to make a large amount of shareholder information accessible on its website. ‘We believe good corporate governance encourages accountability and transparency, and promotes sound decision-making to support our business over decades,’ the company says.
Tying transparency to profit and loss is a best practice that others may want to adopt.
Last year Microsoft relaunched its investor relations website, offering more corporate governance and corporate citizenship content that is easier to navigate. All types of disclosures, from CSR to political campaign contributions, are accessible on the site.
‘Transparency is an important corporate value of ours,’ said Microsoft vice president, deputy general counsel and assistant secretary John Seethoff when asked about the benefits of listing disclosures on the company’s website. ‘We are happy to be open about it.’
Microsoft also offered additional video content aimed at shareholders in 2011.
The company gets special praise for its director video series, which provides videos of Microsoft directors discussing the different approaches they take to handling their responsibilities. There is no better way to know who your directors are and what they stand for than hearing it from them directly.
When it comes to compliance, Microsoft has built on the establishment of its Anti-Corruption Program Management Office in 2010 with the implementation of enhanced vendor and partner due diligence measures, heightened scrutiny of invoices and stepped up anti-piracy enforcement activities in 2011. The new higher standards have had immediate affect – the company has stopped doing business with 113 vendors as a result of its new vetting processes.
Regarding compensation issues, Microsoft received more than 90 percent shareholder approval of its say-on-pay executive pay proposal and its compensation committee adopted a ‘no-fault’ compensation recovery policy that applies whenever there is a payment of incentive compensation based on erroneous financial information. Such relentless attention to governance best practices will no doubt ensure that Microsoft’s compliance and ethics program remains one of the industry’s best for years to come.
