Exxon has long had its own way of doing things – from exploration policy to public, government and shareholder relations. Exxon invites comparison with other companies based on its record. The company says simply – we are better than everyone else according to every system of measure, why should we listen to anybody telling us to do anything different. This line of argument compels the ancient wisdom – he who knows what he knows knows, he who knows not what he knows not knows not. The experience of participating in Exxon’s Annual Meeting is a classic of people talking past each other – Exxon management simply does not comprehend what its shareholders are trying to tell them. And, here’s the rub – lack of understanding results in failure to try to understand and that is why I persist.
The Yale School of Management has recently concluded that best practice for American corporations is to have a separate individual as Chairman of the Board from the Chief Executive Officer. Senator Schumer of NY has recently introduced legislation that would require as a matter of federal law that all corporations should separate Chair and CEO. There is, therefore, much current wisdom learning and agreement on this subject – enough that I will not attempt anything beyond the very simple question – how can you have a “real” board without having an energy separate from the management to compile its agenda, assure availability of appropriate information, conduct the meetings? How can you monitor CEO conduct? One size does not fit every company, but American publicly traded companies universally are required to have boards of directors in order to represent the interests of owners. Does this not necessarily mean a “real” board?
Robert A.G. Monks — Co-Founder
