How Guardian targets best practices as a private company

Jan 24, 2020
The Guardian Life Insurance Company of America recently received the 2019 Corporate Governance Award for best overall governance for a private company

The Guardian Life Insurance Company of America is a mutual company, with policyholders instead of shareholders. ‘People count, and we want to do what’s best for our policyholders,’ says Harris Oliner, senior vice president and corporate secretary.

The company puts great effort into having top-class governance, going far beyond what it is required to do. For example, Guardian publishes its corporate governance framework, essentially as a form of proxy statement, Oliner says. The focus is on having governance with transparency and doing the right thing, he explains.

Guardian’s corporate governance is grounded in fundamental practices behind good public company governance. For example, the board currently comprises 10 independent directors and one Guardian officer, who is the president and CEO. But Guardian goes beyond the basics and continues to evolve its governance in line with best practices. During the past two years, it has added three new independent directors to the board, and more than one third of its directors are now female.

When looking for a new director, Guardian takes into account an array of qualifications, but also considers diversity of gender, race, ethnicity, age, cultural background and professional experience. ‘We believe the board is cognitively diverse and that a variety of viewpoints contributes to a more effective decision-making process and ultimately to better outcomes for policyholders,’ the company states.

Over the past year, the office of corporate secretary (OCS) improved the onboarding process for new directors by taking steps such as: expanding the director orientation sessions and changing the agenda to center on key strategic/cross-functional issues; creating a buddy/mentor program; giving board members books on board-related matters; and supplying a list of board education courses and seminars.

The OCS also enhanced the board meeting process by developing, alongside the communications team and general counsel Eric Dinallo, a guide to presenting to Guardian’s board. It organizes practice presentations for each meeting cycle. Advice for presenters includes assuming that directors have read the materials they have been given and making sure the presenter is up to date on current affairs that may impact the company, Oliner explains, adding: ‘It’s been a tremendous help.’

As part of the company’s compliance and ethics program, Guardian recently introduced a code of business conduct and ethics for directors, employees, vendors, independent contractors, consultants and employees of the company’s India-based subsidiary. This year, the OCS has worked with the company’s compliance team to beef up the independence analysis process and annual conflicts-of-interest check for all board members.

All employees must complete compliance training on issues such as privacy, record retention and the code of business conduct and ethics. This year, the OCS introduced a new mandatory compliance training program for directors, under which they take a selection of the units that employees complete. For directors, these include ‘overcoming ethical obstacles’ and ‘bursting corporate ethics myths.’ ‘They loved it,’ Oliner says.

The firm also addressed the potentially thorny issue of subsidiary governance by creating a Guardian India operational risk committee and forging closer connections between other subsidiaries and Guardian’s business unit risk committees and corporate risk-management committee. ‘Governance continues to improve with strong engagement across all risk-management committees,’ the firm states. ‘Risk-management committees’ charters will continue to evolve, focusing on driving improved accountability, clearer escalation processes and robust dialogue on emerging risks.’

This article originally appeared in the latest Corporate Secretary special report

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