The Corporate Library Blog

No More Exxon Annual Meetings For Bob Monks

The Corporate Library Co-Founder Bob Monks won't attend any more Exxon annual meetings, according to an essay posted on his blog Friday. He cites a disappointing lack of interaction between shareholders and management as a main reason.

Elizabeth Souder, a Dallas Morning News reporter writing for the Texas Energy and Environment Blog, writes about Bob's decision and her experience at Exxon's recent annual meeting here.

A 'Real' Board for Exxon

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

Bob Monks Discusses Shareholder Activism

Nell Minow's post last week discussed the website set up by The Corporate Library co-founder and board member Bob Monks in support of shareholder proposals at Exxon. Yesterday, Bob discussed the website on the Maine Public Broadcasting Network and talked about corporate governance, accountability and the role of shareholders. Listen to the interview here. 

Exxon: Mutual Fund Voting Should Be Informed By Investors

The AP reports on Salon.com on the website set up by TCL board member Bob Monks and Neva Rockefeller Goodwin in support of the shareholder proposals on climate control, renewable energy, and splitting the chairman/CEO at Exxon.  To my knowledge, this is the first time shareholder proponents have called on beneficial holders to put pressure on their mutual funds to vote against corporate management.

The site allows investors to click on a fund company and send a message that says, in part, "As a mutual fund shareholder, I am concerned about both the future of the environment and the future of my retirement nest egg."

"We intend to watch how these mutual funds respond to this feedback from their customers and then let mutual-fund investors know whether their input was heeded or ignored," Monks and Rockefeller Goodwin said in a statement.

Activist groups often petition funds to vote certain ways, but "it's unusual for activists to try to work through the fund's shareholders," said Mike McNamee, spokesman for the Investment Company Institute, the mutual fund industry's biggest trade group.

TCL reports have consistently shown that mutual funds vote contrary to the interests of investors on executive compensation and other issues.  While the SEC now makes the mutual funds disclose their votes, the information is still difficult to get and holders have very little idea of how the votes of the shares they own are being cast and even less idea of how to direct a better vote.  Instead of (or in addition to) petitioning the funds directly, the people filing these proposals have set up a very user-friendly site that lets investors send their views on to the companies that manage their money.  I hope this starts a trend – and that future such sites disclose how the funds voted on previous votes.

Nell Minow — Editor