The Conference Board Task Force on Corporate/Investor Engagement
Latest News from the Task Force
|You can now download the recent Director Notes, The Separation of Ownership from Ownership: Concerns Arising from Institutional Investors as Intermediaries, based on the second Task Force Briefing paper prepared by Cleary Gottlieb Steen & Hamilton.|
|A new Director Notes, Global Trends in Board-Shareholder Engagement, looks at potential benefits and complexities of the board-shareholder engagement process, reviews global trends in engagement practices, provides insights into engagement activities at U.S. companies, and highlights developments in the use of technology to facilitate engagement.|
|Governance Center Executive Director Donna Dabney discusses the work of The Conference Board Task Force on Corporate/Investor Engagement on This Week in the Boardroom with TK Kerstetter, Chairman, NYSE Governance Services / Corporate Board Member.|
|View the latest Insight Minute from The Conference Board on the topic of Board/Investor Engagement.|
|You can now download the recent Director Notes, The Underpinnings of Corporate Governance Approaches and the Shareholder Value Model, based on the first Task Force Briefing paper prepared by Cleary Gottlieb Steen & Hamilton.|
Task Force Mission Statement
Public corporations have been an engine of growth and economic prosperity for Americans, driving a 20thcentury expansion of the middle class and unprecedented opportunities for increasing standards of living.
Since the turn of the 21st Century, there have been high profile scandals at some public companies—from the accounting improprieties at companies such as Enron and WorldCom, to the unsustainable investments made by financial institutions that were major players in the recent global financial crisis. These events had a devastating impact not only on the companies involved, their employees, shareholders, retirees, partners and other stakeholders, but in the case of the global financial crisis, on entire societies
These events also have contributed significantly to distrust of business in general. Globally, according to a recent Edelman survey, less than 20 percent of respondents trust business leaders.
Regulators and many others have concluded these events were a result of governance failures. For most of the 20th century, public corporations were largely run by professional management with relatively limited oversight by the board of directors and investors. After the accounting scandals of the early 2000s, Congress increased the role and responsibilities of independent directors in the oversight of management through the Sarbanes-Oxley legislation. At the same time, there was a growing and successful movement to increase the power of institutional investors in their oversight of publicly held corporations. In the aftermath of the financial crisis, Congress gave significant support to this movement under the Dodd-Frank legislation through requirements such as “say on pay”.
These shifts in the relative governance roles of management, directors, and investors in public companies have occurred reactively as a response to specific events, rather than as a result of a thoughtful strategic analysis of how each action affects the total allocation of roles and responsibilities in our system of corporate governance. What is missing is a thoughtful and objective analysis of the best governance system to maximize the potential of public companies where boards and investors are aligned to pursue common goals.
The Task Force will examine the facts, the issues, and the policy implications of the current state of US corporate governance with the objective of addressing the following questions:
- What is the optimal balance in the relative roles of management, directors, and investors in the governance of public corporations?
- What are the gaps between the optimally balanced system and the current system?
- How should boards and investors engage with one another to lead to an optimally balanced system?
In examining these questions, the Task Force will consider how the current system and alternative approaches impact long term sustainable growth of companies and society at large and public trust in business.
The Task Force intends for its research and recommendations to influence corporate directors, investors in public corporations, and public policy makers in decisions regarding investor engagement in the governance of public corporations.
For more information on the Task Force on Corporate/Investor Engagement, please see the Task Force's membership pages, the corporate/investor engagement resources page, or download the Background on the Task Force. You can also read the Task Force press release here.