How Graybar stays current on governance trends
In the four years since the introduction of this category, this is the third time Graybar Electric Company has won the award for best overall governance for a private company. But then it has been working on governance – and doing so as a private firm – for a long time: it celebrated its 150th anniversary during the week of the awards and is in its 90th year of employee ownership.
Its employee and retiree shareholders number more than 7,300, which means that despite being a private company, Graybar is registered with the SEC and as such has to make various filings, including annual reports. That discipline helps keep the company on its compliance toes, as Matthew Geekie, senior vice president, secretary and general counsel, explains.
The company also works to stay up to date with the latest in governance trends. Its board members now sit on public company boards to broaden their experience and learn whether there are any developments Graybar should be adopting, Geekie says. That’s in addition to the training directors must complete every three years.
Graybar keeps tabs on ISS and other governance bodies, too, to benchmark itself against their best practices. An example of this is that Graybar has a third party conduct board evaluations by interviewing directors. This approach has taken off at public companies over the last couple of years, replacing the more traditional approach of having directors complete questionnaires.
Governance professionals say interviews generate more detailed and useful feedback that can help a corporate secretary more effectively plan meetings, for example, as well as in tackling broader issues a board may be facing.
Another trend Graybar has taken note of is board diversity: two women sit on its nine-person board, including chair, president and CEO Kathleen Mazzarella. The firm is also taking a closer look at the skills matrix it wishes to have so board members are assessed on specific core skills. Given technological developments in Graybar’s industry, it has added competency requirements to ensure board members understand the opportunities and challenges of using new tools.
Graybar recently renewed its voting trust agreement, which enables it to execute long-term planning, and has embarked on greater collaboration with former employees and retirees, Geekie says. In addition, the company recently amended its by-laws to require that board decisions take into account the best interests of all constituents, including shareholders, employees, customers, suppliers and the communities Graybar serves.
‘This broader perspective leads to a more comprehensive analysis of the impact of each decision and minimizes unintended consequences,’ Graybar explains.
At a time when public companies face growing pressure on ESG issues, Graybar’s board has integrated sustainable philosophies into the firm’s business practices. Employees are encouraged to participate in the annual ‘Graybar Green Challenge’ and, following advice from the sustainability committee, the firm has taken steps such as cutting annual electricity use by 15 percent.
This article originally appeared in the latest Corporate Secretary special report. Click here to view the full publication.