Leading the Society of ‘doers’
The annual Society of Corporate Secretaries and Governance Professionals national conference marks a changing of the guard when one board chairman steps aside to make way for the next. This year Bill Mostyn will move over for Lydia Beebe.
Both say the position of Society chairman is an interesting job to have for a host of reasons, some expected and some not. Perhaps the most remarkable aspect is that the role puts them in charge of the Society board after years of assisting others in their careers as corporate secretaries.
Mostyn, who is deputy general counsel and corporate secretary of Bank of America, says he’s had the chance to try out a few strategies with the 24-member Society board he learned at the hand of corporate chairmen. ‘You pick up hints,’ he says. ‘You try to replicate things you thought were good.’
One thing he knew to avoid was surprises on important actions. ‘You don’t want wait for a board meeting,’ Mostyn says. ‘You know you need to work it behind the scenes before you actually get to the meeting.’
Both Mostyn and Beebe, who is corporate secretary at Chevron, say running the board of a non-profit trade association differs quite a bit from that of a corporation, but the basics are the same: setting a strategic plan, providing oversight, and selecting and compensating senior management.
No shortage of ideas
One quirk of the Society, though, is that it is made up entirely of people in the governance business. ‘There’s always a different governance idea someone wants to try,’ Mostyn says.
Beebe is familiar with how opinionated her fellow board members can be on certain topics. ‘It’s not a challenge at all to get input,’ she says. ‘Unanimity is probably unlikely but broad consensus is very doable.’
In spite of its challenges, they both agree the position of Society chairman (to which they were nominated by anonymous vote of fellow board members) is one worth holding. Mostyn, who will continue to serve on the board this year as chairman emeritus, says he has enjoyed being ‘in the vanguard’ of those at the center of governance issues and playing ‘utility infielder’ when the Society needed him to represent it in public forums.
Beebe says she looks forward to being chairman, even though she’s unsure what shape the role will take for her: ‘I have not finalized any particular priority or emphasis. I’ll talk with all the board members before I nail that down.’
The Society has been a bit of a lifeline to her since she was promoted to lead Chevron’s governance team in 1995. ‘It’s an organization I went to when I unexpectedly became a corporate secretary,’ she says. ‘I think it’s the organization for a corporate secretary to go to first to get some sort of direction.’
The research and best-practices material produced by the Society were key to her mastering the core of the corporate secretary job, but Beebe says she still frequently seeks advice of people she has gotten to know through the association. In turn, she gets many calls from others wanting her opinion. Mostyn’s experience is similar. ‘The networking opportunity is one of the biggest assets,’ he says. ‘Everybody from the biggest to the smallest companies is willing to share their experience.’
He also says the Society provides some of the best advice on issues like how to run an annual meeting, taking minutes and methods to deal with shareholder proposals. ‘It’s difficult to get this information in other places,’ he says. ‘The legal venues can be somewhat academic or not on point. We try to make it more nuts and bolts.’
During his tenure, Mostyn says there were still lingering problems over the decision to expand the membership base beyond corporate secretaries to include the wider governance professional community. The issue had been taken to the membership as a whole, resulting in reams of commentary about who should properly be targeted for recruiting. Such a ‘wide open’ debate added to the confusion, and Mostyn says it’s a decision that should have stayed with the board.
One of his goals was to make the membership comfortable about going in this new direction, which he feels he accomplished. ‘The Society needed closure on the issue of who (in terms of job function) should be members of the Society. I think we’ve come to grips with that now.’
Other achievements were growing the number of members, in part through alliances with the New York Stock Exchange and Nasdaq that the Society put in place to improve visibility among new companies that are listing on the exchanges. Mostyn also notes the opening of the first international chapter in Mexico City (Toronto is also in the early stages of forming the first Canadian chapter) and the potential for alliances with governance groups in the UK and Europe.
Both the current and former chairmen note the dramatic change in the profile of the corporate secretary with the focus on corporate scandals and the legislation that followed. Beebe says, ‘People are recognizing it’s a much more substantive role when historically it has been seen as more administrative.’
Mostyn says the new scrutiny of boards has ‘energized a cottage industry’ of good governance advocates. ‘Pension fund-types and academics like [Harvard Law School’s] Lucian Bebchuk all have their own pet ideas.’
‘It’s a full-time profession,’ he continues. ‘Their job is to come up with these ideas. It’s a platform for attention. And they’ve got this endless cycle of new fixes for corporate governance problems.’
Directors don’t have a lot of time to sit and discuss every theory when they are trying to run a business, he adds. Indeed, boards have not even had the opportunity to fully absorb the shifts wrought by Sarbanes-Oxley and other rule changes. Now, they are also contending with having to disclose more information about executive compensation which is adding fodder for the governance activists. ‘They’ll be picked apart,’ Mostyn says.
In any case, corporate secretaries still have allies at the SEC’s Division of Corporation Finance, with whom Society board members meet twice a year. ‘They look at us as a very useful connection to the real world,’ Mostyn says. ‘We’re their actual doers. We carry out the rules.’
When needed, the Society conducts surveys about proposed rule changes at the SEC. ‘That’s very valuable information for them to have,’ he says. ‘We’re not theoreticians. We’re in the trenches.’
In her year as chairman-elect Beebe spent some time shadowing Mostyn. And he will still be on hand in the coming year for consultation. ‘Lydia’s not going to need help,’ he says. ‘But if she does, I’ll be there.’