Corporate Secretary Magazine Awards 2008 'Corporate governance team of the year' winner Colgate-Palmolive
In keeping with its team approach, Colgate-Palmolive, the recipient of the ‘Corporate governance team of the year’ award at the Corporate Secretary Magazine Awards, highlights its company-wide approach to governance and the belief that better standards lead to better performance: ‘Governance is an ongoing commitment shared by our board of directors, our management and all Colgate people. At Colgate, we believe strongly that good corporate governance accompanies and greatly aids our long-term business success. This success has been the direct result of Colgate’s key business strategies, including its focus on core product categories and global brands, people development programs emphasizing ‘pay for performance’ and the highest business standards. Colgate’s board has been at the center of these key strategies, helping to design and implement them, and seeing that they guide the company’s operations.
Good governance is the responsibility of all Colgate people. Colgate people worldwide are committed to living our global values of caring, teamwork and continuous improvement in all aspects of our business. By managing with respect, Colgate people create an environment of open communication, teamwork and personal responsibility. A constant dedication to good governance shapes our Colgate culture and ultimately leads to good business results.’
Colgate is no stranger to accolades, having received awards from Wharton/Spencer Stuart, Corporate Board Member’s Champion Board, three nods from Business Week’s Top 10 Boards in the US in addition to getting high ratings from RiskMetrics Groups’ Institutional Shareholder Services and GovernanceMetrics. At the Corporate Secretary Magazine Awards, senior vice president, general counsel and secretary Andrew Hendry and the rest of the corporate governance team were represented by Colgate’s associate general counsel – corporate, Nina Huffman, who accepted the award, sponsored by American Stock Transfer & Trust Company, for the firm.
Circle of governance
Building an outstanding governance environment, and putting together such an effective team to oversee it is no easy task and the company works hard to maintain continuity, even when leading figures depart. The company saw a seamless transition as longtime CEO Reuben Mark retired in July of 2007, and Ian Cook took the reins and maintained the award-winning corporate culture.
A defining feature of its program is the strong relationship between corporate culture and governance at Colgate. The company’s culture includes an extreme focus on a limited number of products; empowerment, partnership and trust; training and communications; a globally focused process; stock-based pay for performance; and shared values such as caring, teamwork and continuous improvement. It’s a well-known fact that corporate culture leads to good results, which leads to good governance. And that, in turn, shapes the overall corporate environment such that the three ingredients become a virtuous circle.
Colgate’s board has embraced this ethos to great effect. In addition, the company is being governed by some central principles: small size; full involvement; ‘real’ independence; well-organized and well-planned information flow; self-evaluation and CEO evaluation; written guidelines on board procedures, and regular review of the organization’s health, all of which are detailed on the company’s website.
Although the company has been honored in the past for its governance achievements, relative to other noted companies, Colgate’s excellent program has been a bit of a secret. Yet its stand-out team enabled it to surpass the exceptional companies also nominated in the category: Baker Hughes, Chevron, Wyndham Worldwide and Sunoco. And with such a strong group covering all the bases from ethics training to shareholder communications, it was impossible not to expose Colgate as a leader in governance.
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