Corporate secretary of the year (small to mid-cap)
Wendy Hallgren, Fluor
Wendy Hallgren, winner of corporate secretary of the year in the small to mid-cap category, underlines the importance of understanding your corporate culture and using internal resources.
‘We have set up our entire compliance program to leverage our internal resources, including communications, human resources and legal departments,’ explains Hallgren, vice president of corporate compliance at Texas-based Fluor. ‘Our business units get involved quite a bit as well, so it’s really a collaborative effort.’
Hallgren, who has been with the construction services firm since 2002, was very excited to receive this award. ‘It is just great to have an external recognition system validating your program and your work, and it is nice to think it might influence other companies to behave in the same way,’ she says. In addition to Hallgren’s win, Fluor received recognition with the award for best overall governance, compliance and ethics program in the small to mid-cap category this year.
Judges spoke highly of Hallgren’s work in developing Fluor’s compliance program and creating a useful handbook for new directors. They were equally impressed with her work in revamping the company’s governance post-Sarbanes-Oxley and pushing for greater transparency and disclosure as well as board-level awareness of compliance, ethics and sustainability.
Seven years on, Hallgren feels the initiatives she put together post-SOX might not be considered progressive today but certainly set the stage for the company’s current governance success. ‘A lot of it has to do with being transparent with your board and executive committee about issues that come up, and involving these groups so they can make better decisions about the business and strategy in the future,’ she says.
Hallgren considers herself lucky to have a group of directors who are interested in sharing ideas on ethics and compliance. She meets once a quarter with her audit committee to discuss these issues and feels this access is pivotal to the strength of her program. ‘We have a board that is really actively engaged, and this has changed the way we run the business,’ she reports.
As part of the governance changes she headed post-SOX, Hallgren revamped Fluor’s director handbook to be in line with the company’s renewed focus on compliance and ethics. ‘We pulled all the pieces together, including insider trading requirements and plans for committee meetings,’ she recalls.
In addition, Hallgren upgraded the company’s director orientation process to include a thorough explanation of its business and director meetings with various departments, including sales and investor relations. ‘What naturally flowed from our new orientation program and our handbook was a desire for directors to be updated regularly,’ she adds.
Rooting out corruption
Along with her compliance responsibilities, Hallgren heads the company’s disclosure committee and is responsible for the integrity of its financial statements. ‘Disclosure is our hallmark – we are very transparent,’ she comments. It was the company’s disclosure practices that earned it a top 10 place in Forbes magazine’s America’s Most Trustworthy Companies list in 2008. ‘The culture at our company, from the top all the way down, is really about doing the right thing,’ she adds.
In fact, Hallgren credits Fluor CEO Alan Boeckmann’s work on rooting out corruption as the catalyst for the company’s proactive stance on business ethics. Boeckmann helped found, and continues to lead, the World Economic Forum’s Partnering against Corruption Initiative (PACI).
‘His view is that we have to take action against corruption because it is the right thing to do and it affects our business,’ comments Hallgren, ‘so he started this group and began challenging other firms in the engineering and construction sectors to join in.’ Hallgren’s own work on PACI was also noted by the judges.
Taking on risk
Recently Hallgren was given the additional responsibility of heading up Fluor’s enterprise risk management program, for which she reports to the audit committee. She’s been taking a similar approach as she did with ethics and compliance by using her internal resources to develop the most efficient and effective risk management system possible. ‘I don’t do it all by myself – there is really good support here,’ she comments. ‘My job is more about managing, prioritizing and handling different issues as they arise, and leveraging other employees and departments.’
Hallgren sees governance professionals and corporate secretaries as being at a kind of crossroads, with shareholders and regulators pushing for greater transparency at a time when many companies are more transparent than ever. She is unsure whether new proxy disclosure rules will result in improved transparency for shareholders or actually encroach on management and the board’s ability to govern. ‘Transparency is definitely a good thing but I worry that some of the regulations, depending on what gets adopted, may dip into the management of a company at some point and might slow things down,’ she says.
What’s clear for Hallgren is the importance of maintaining internal governance processes and communicating effectively with her board, management and other employees. ‘If you have good governance controls it leads to more success and profitability, and we have good support at the company for this through our collaborative effort,’ she concludes.
