Each year, the Corporate Secretary Awards recognize the trailblazers and established leaders in the world corporate governance. In this special issue, we talk to the winners for 2009.
Great corporate governance and effective risk management have always been ideals most companies strive for, and recently the attention on best practice has intensified. But what constitutes an outstanding governance program? Corporate Secretary went some way to answering this question at its second annual awards dinner, where the leading practitioners in the diverse field of corporate governance were recognized. The following pages feature interviews with all the winners of these prestigious awards, and will provide rare insight into the elements that make up the best corporate governance programs in the country.
On the way up
Abigail Jones found her entry into Questar after acting as a litigator for the natural gas-focused company. She has been at Questar for seven years, and now serves as corporate secretary and vice president of compliance.
Jones was a high-flying trial lawyer from 1987 to 2002. ‘I came to this job from quite a different place,’ she says. ‘By the time everything landed on my desk it had already become a crisis and I was almost exclusively a defense lawyer. Sometimes I miss the courtroom because it’s exhilarating. But the beauty of what I do now is that it is about preventing problems, so you avoid ending up in court.’
Her nomination to the Corporate Secretary Magazine Awards was submitted by Keith Rattie, the company CEO, chairman and president. Questar was so impressed when Jones helped lead it to a victory in a piece of complex litigation that it offered her the job in-house in 2002. ‘We convinced her to forgo a promising career as a litigator to join the Questar team, and she hit the ground running,’ Rattie explained in Jones’ entry. Being new to the scene, Jones trained with her predecessor for a year as assistant corporate secretary; in 2005, she was promoted to the position of corporate secretary. She quickly won recognition internally for her diligence, attention to detail and consensus-building skills. She was primarily responsible for Questar’s 2008 proxy statement and dealing with a number of shareholder proposals.
She also rewrote the compensation discussion and analysis section of Questar’s proxy statement and helped create new disclosure tables, working in collaboration with the finance and human resources departments. Rattie recalls how rapidly Jones got to grips with SEC rules. ‘Abby quickly made the transition from litigator to SEC expert and, over the past few years, has coordinated six debt offerings totaling $1.6 billion,’ he says.
Jones also took on the laborious task of revising the company’s articles of incorporation. According to Rattie, she pored over more than seven decades of Questar corporate records in order to identify the history of the company’s provisions and conflicts within its articles. ‘She proposed and obtained approvals for necessary revisions to the articles, and then guided the proxy process through to shareholder approval of her recommended revisions,’ Rattie explained.
Jones modestly puts an element of her success down to favorable circumstance and receptive investors. ‘I feel lucky with our shareholder base,’ she declares. ‘We had two proposals last year and one the year before so we don’t have too many problems to deal with.’
Far from the madding crowd
Being located in Salt Lake City can have its drawbacks in terms of networking with other corporate secretaries – but it hasn’t held Jones back. ‘Unlike many of my peers, I’m not in New York, so I listen to a lot of webcasts and read Corporate Secretary to try to keep up to speed,’ she says. ‘There are only two people in this city who do what I do, including me, so I try to get to society meetings when I can, although it’s not always easy.’
Her CEO praises her ‘close attention to evolving best practice in corporate governance.’ Jones also wins admiration for her routine preparation of ‘issues briefs’ for management and the company’s board of directors. ‘I was stunned to be nominated by my CEO and I consider myself very lucky to have a great management team,’ she says. ‘I work with a group that knows the importance of corporate governance.’
She thinks there have been a lot of changes since she started at Questar. ‘In the last four years, things have become more and more complex,’ she notes. ‘We are starting to see more shareholder proposals and more governance issues and we also became part of the S&P 100, which gets you more attention.’
Looking to the future, Jones is eyeing developments in Washington with interest. ‘The interesting thing from my standpoint is the legislation coming from Washington and what the SEC is going to do regarding shareholder access,’ she says. ‘There is a lot coming at corporate secretaries right now that we have to take to our boards.’
Jones thinks she benefits from a high level of management buy-in, but concedes that not all top executives get it. ‘You need to stress the importance of corporate governance to the whole picture,’ she explains. ‘Some companies see only the need to pay attention to strategic matters. You need to help them see that corporate governance is part of the bigger picture.’
A people person
Prior to joining EMC Corp in 2007, Rachel Lee, senior corporate counsel at the firm, served as senior counsel at Computer Associates in New York. Before that she worked as an M&A lawyer and an associate at Chadbourne & Parke, where she concentrated on general corporate, governance and securities law compliance, and disclosure matters.
Lee joined EMC in a governance-focused role, ideally suited to a people person like her. ‘Like my boss says, governance is a relationship business, so I spend a lot of time engaging with stakeholders in this role,’ she says.
She has found herself doing increasing amounts of governance work as her in-house role has developed. ‘What is fascinating about governance is the dynamics, the communities, and reassuring investors that the board can hear and is listening to them,’ she says. ‘There is a huge opportunity to convey the great aspects of the role, and to communicate what works well.’
Lee regularly speaks to institutional investors regarding governance and compensation matters, and also arranges semi-annual calls with a small group of investors. Sometimes she organizes these calls in conjunction with EMC’s investor relations team, especially if investors want to talk business. Most of her time, however, is spent talking to governance experts about governance issues. Lee says she uses the calls as a chance to get feedback on hot topics like say on pay and proxy access. ‘We also give investors a chance to comment on our compensation disclosures,’ she notes.
In addition to these scheduled calls, Lee also holds calls with activist investors. ‘Governance can be tough, but it really is a challenge and an opportunity to shape things,’ she says. She describes her calls with investors as ‘very collaborative. We reach out to them and ask them what they would like to discuss. Sometimes it is just with management, sometimes with the chair or chief executive, and this affects the subject matter. It’s a productive exchange. In this environment it’s important to keep communications open.’
Looking ahead, Lee, like Jones, sees the biggest hurdles coming out of Washington. ‘It’s a tough regulatory environment and there are divergent views about what is best for corporate America,’ she says. ‘I am particularly interested in the proposed rules on director elections.’ She believes looking to other countries can help make sense of the corporate governance landscape, though she recognizes the sizable nuances between jurisdictions. ‘With say on pay we have looked a lot at the UK experience, but it’s just another piece of the puzzle,’ she notes.
Lee points out that it is important to communicate with fellow corporate secretaries as well as investors. She is a member of the Association of Corporate Counsel and the Society of Corporate Secretaries and Governance Professionals and its corporate practices committee. ‘The association has been invaluable to me,’ she notes. ‘There have been some great discussions among boards in the country, and it’s good to share these where possible.’
She also likes the fact that she can pick up the phone when an issue arises. ‘It’s great to be able to speak to people who are aware of the challenges going on,’ she explains. ‘I think more corporates should be sharing information. There needs to be more networking; it’s about working out the corporate viewpoint and having a legitimate voice.’
Lee adds Corporate Secretary’s rising star award to her already impressive list of achievements. This is not even her sole recognition this year: she was also named as a 2009 Rising Star of Corporate Governance by the Millstein Center for Corporate Governance and Performance at the Yale School of Management.
