Leading by example

Identifying the best corporate governance systems and processes is a very difficult task because no two companies ever have exactly the same structure. Even more difficult is selecting the best governance experts in any given year, but that is exactly what the esteemed panel of judges at the Corporate Secretary Magazine Awards had to do.

The awards for corporate secretary of the year provided insight into how well-honed governance experts measure corporate secretary performance in governance matters and what qualifies as outstanding action in today’s landscape of increasingly active shareholders and heightened demands for governance disclosure.

Lydia Beebe, corporate secretary and chief governance officer at Chevron, has been with the company for 32 years and was first elected corporate secretary in 1995. During her tenure, she has experienced many of the defining changes that have shaped the corporate secretary role in recent history. Most notably, Beebe mentions Sarbanes-Oxley and augmented listing standards, both of which resulted in increased disclosure requirements and a more elaborate process of documentation for companies.

‘The basic duties for corporate secretaries have essentially remained the same: you serve the board and the executive committee, and have responsibility for how the company governs itself,’ Beebe explains. ‘What has changed is the method for doing this, which has become a lot more sophisticated. There is much more process and documentation involved, and a far greater effort toward transparency.’

Beebe oversees a team of a dozen lawyers, including three assistant corporate secretaries. Her group includes a few unique governance functions like a team devoted to managing the distribution of lawsuits and subpoenas and an assistant corporate secretary focused solely on subsidiaries, of which the energy company has thousands. ‘The strength of our company – and many others – lies in its dedication to doing the right thing year after year,’ notes Beebe. ‘You don’t see dramatic changes because we are not a company that has been in trouble with Wall Street or our stockholders.’

Stepping up
According to the judges, what made Beebe stand apart as a model for other corporate secretaries was a combination of her strong governance track record and several initiatives she carried out in 2009. Those actions included stepping up investor outreach, completing governance due diligence for several M&A transactions totaling billions of dollars, and refining board and governance programs. ‘We stay very active with our shareholders and work to negotiate when appropriate,’ says Beebe. ‘We’ve also changed our bylaws to allow shareholders to hold special meetings.’

Beebe was also lauded by the judging panel for her role as past chair of the Society of Corporate Secretaries and Governance Professionals and as current chair of the governance committee for the Council of Institutional Investors. She led the society in 2007-2008 and spearheaded several important and ongoing initiatives, including succession planning and development for the board as well as various technological improvements. ‘We tried to do things to continually improve the society’s governance, to create more process around how it governed itself, and to make it as responsible as possible to its members,’ she recalls.

For Beebe, it was a great honor to lead the organization, and she feels it played a key role in her career development. ‘My first advice to anybody new is to participate in the society because it is an organization of people willing to share what they know and what they have learned, and it helps you stay abreast of what is going on legislatively,’ she says. Groups like the Council of Institutional Investors are also helpful for keeping updated on what is happening in the shareholder community, she adds.

Two weeks after the awards ceremony, Beebe was busy getting ready for a December board meeting where one of the main topics up for discussion was Chevron’s three-year business plan. Her group was also preparing for a management change, with CEO and chairman David O’Reilly retiring at the end of December to be succeeded by former executive vice president John Watson. Meanwhile, Beebe is keenly following proxy access rules and other legislative developments that would result in additional shareholder rights.

It’s clear that while she is honored by her recognition at the Corporate Secretary Magazine Awards, Beebe’s greatest reward comes from her ongoing governance work at Chevron. This fits with her view that the most critical role for corporate secretaries is to understand the inner workings of their companies. ‘You need to understand your corporation, its board and the company culture, and try to figure out a constructive way to help all those people,’ she says. Managing governance is a pivotal behind-the-scenes role that provides its professionals with lots of opportunities to put out fires but very few chances for public glory, she adds. ‘As my boss likes to say, the role of corporate secretary is like being a goalie: there are lots of chances to be scored against, but not many to score,’ she concludes.