How to run a top-notch corporate governance program
Pinning down a typical day at the office of Pitney Bowes’ corporate secretary is no small feat. That’s because when you’re talking about the corporate secretary’s office, you’re also talking about the corporate governance office, the stockholder services unit, the corporate safety and environmental affairs unit, and the corporate compliance and integrity affairs unit.
Each unit falls under vice president Amy Corn, who holds the dual title of corporate secretary and chief governance officer. She has been at Stamford-based Pitney Bowes for 21 years. The company and its corporate secretary’s office have come a long way since Corn left her job at a large Baltimore law firm and moved to Connecticut.
‘I was looking to replicate within an in-house environment what I had enjoyed at a large law firm: mentors, colleagues and diversity,’ she explains. ‘Pitney Bowes made me an offer when the headquarters were located in the same place as the main plant, and the company was much more involved with manufacturing. It wasn’t what I was looking for, but I was given lots of independence, my responsibility kept increasing, and I had a lot of fun. I’ve been here ever since.’
Today Pitney Bowes is the world’s leading provider of integrated mail and document management systems, services and solutions. Along the way, it has built a strong record on governance, creating the role of chief governance officer a little more than a year ago. The difference at Pitney Bowes is that the title came with two additional units: corporate safety and environmental affairs, and corporate compliance and integrity affairs. Corn sees both appropriately fitting under the broader governance title.
‘Corporate compliance and integrity affairs addresses employee concerns and maintains the employee hotline, as well as inquiries about policies,’ she explains. ‘It also covers a lot of training. It’s a very robust program. The other side of what it does is investigation and security. The corporate safety and environmental affairs unit is a less obvious fit, but it is one where we want to make ourselves a leader. By putting it under governance, it really forces us to focus on these issues.’
That focus has already paid off. In May Pitney Bowes was included in Business Ethics magazine’s list of the ‘100 best corporate citizens for 2004’. Pitney Bowes is one of just 29 companies to have appeared on the list every year for the last five years.
Bringing it all together
At Pitney Bowes, as with many other companies, the stockholder services unit is the area more traditionally aligned with the corporate secretary’s office. That’s one reason why Corn says it’s natural for the assistant corporate secretary, Patricia Johnson, to head up the unit.
‘She has a dual role and is active in helping plan off-site board meetings,’ says Corn. ‘We also have a lot to do with managing director compensation – they get stock grants, a quarterly retainer and a meeting attendance fee.’
Pitney Bowes has 33,000 employees worldwide. Its global scope translates into a busy and complex role for the stockholder services area. The department oversees the company’s dividend reinvestment plan, employee stock purchase program, stock option exercises, Section 16 filings, and other tasks that overlap with the treasury and accounting offices.
In addition to Johnson, the group has three employees focused on stock plan management, taking shareholder calls and managing the transfer agent relationship. A fourth employee is solely focused on managing Pitney Bowes’ subsidiaries database.
Getting governance right
Pitney Bowes is not the only firm to elevate its corporate governance initiative these days, given the tempest over governance shortcomings within corporate America and the passing of Sarbanes-Oxley. But, says Corn, the company has given its governance initiative the resources and attention it needs to succeed.
‘I also hired a paralegal to help me with the governance role,’ Corn adds. ‘We’re not doing a lot of hiring at the moment, but our chairman recognized I had to have someone assisting me – and she has been invaluable.’
Among the areas where the extra assistant’s contribution is evident is director education. Pitney Bowes’ board members consider the education process important but, as Corn says, they’re busy and the administrative end can be burdensome. So the governance paralegal monitors offerings from institutions, which allows the corporate secretary’s office to publish a list of sponsoring organizations as well as the date, cost and location of the classes. A summary is sent out with every board package.
‘We’ve had directors contact us and say, I’m going to be in Boston, is anything coming up I can attend? We’ll know,’ Corn says. ‘We are also active in monitoring the ratings assigned to us from firms like Glass, Lewis & Co, Institutional Shareholder Services (ISS) and GovernanceMetrics International. They try their best but they often have incorrect or out-of-date information. This way, we monitor inputs or ratings being used so we can make sure they have the up-to-date information. We also make sure our governance web site is up to date, including things such as director employment.’
For any corporate secretary tasked with corporate governance, buy-in from the board is critical, notes Corn. In this respect, she has been fortunate. For starters, the person who originally hired her – Michael Critelli – is now the company’s CEO.
Then there’s Corn’s long tenure with the company. ‘I have been able to build solid relationships in key areas,’ she points out. ‘In creating the department, I reached out to constituents in the company including the CEO, CFO, general counsel, chairman of our governance committee and head of HR. They looked at the things I wanted to do and gave feedback. It caused them to buy in in a fundamental way. This was an important and well-thought-out effort, and the end result is very good.’
Reaching out internally and externally
At Pitney Bowes, the corporate secretary’s and general counsel’s offices are split. Corn and her units report up to Michele Mayes, senior VP and general counsel, whom she says has been a mentor to her since Mayes was appointed general counsel in February 2003.
In all, Pitney Bowes has seven board committees, including the executive committee, with Corn functioning as secretary for the governance committee, corporate responsibility committee, e-commerce and technology committee, and executive committee. The human resources VP is the secretary of the executive compensation committee, the treasurer is secretary of the finance committee, and the attorney from the legal department is secretary of the audit committee. Corn attends all but the executive compensation committee meetings.
Her next big initiative is to increase communications with shareholders. She recently set up an e-mail address for shareholders to contact the board along with the investor-to-board communications process it feeds into. New listing standards and an SEC rule now require companies to provide such contact information as well as a documented process for investors and other interested parties wanting to contact the board.
Corn has started working even more closely with the IR department, leveraging off its constant contact with investors. ‘This sort of contact is more difficult for the corporate secretary’s office,’ she notes. ‘We always reach out to stockholders submitting proposals for inclusion in the proxy statement, but it’s better to get to know them outside of that context. I want to do more, so I might accompany the IRO on the road as a way to gain introductions.’
Interaction among different operating units is a major theme behind how Corn runs the corporate secretary’s office. This is true not just in terms of the internal groups at Pitney Bowes, but also of external constituents. ‘One of the most important things to bring to this job is the willingness and ability to reach out to different areas both inside and outside of the company – networking is fundamental,’ says Corn, a member of the Council of Institutional Investors through Pitney Bowes’ pension fund.
Getting to know institutional investors, through the council and other networking, has helped her gain a different perspective, and allowed her to develop helpful relationships she can call upon down the road. ‘I was invited to join a panel for the Practicing Law Institute, and one of my fellow panelists was from the AFSCME Employees Pension Fund,’ she recalls. ‘In the past, we’d had a proposal from the fund challenging our rights plan. Now I know that panelist, which should make communicating and discussing the issues much easier.’
What’s Corn’s best advice on how to stay on top of the job of corporate secretary? One of the keys, she says, is to benchmark: ‘Learn what your peers are doing. I find my colleagues are smart and helpful, and you can learn new things. Different corporate secretaries have different relationships with their boards. But, ultimately, we all support the board. The directors need to know they can rely on you and that you’re knowledgeable, especially on regulatory and governance issues and trends.’
