The changing of the guard at the American Society of Corporate Secretaries (ASCS) has a serendipitous quality this year. Last June, when Gwenn Carr stepped in as ASCS chairman, her day job at Metropolitan Life Insurance Company was unusually demanding. The insurance giant demutualized in the spring of 2000 and Carr became vice president and corporate secretary of a group with the largest number of shareholders of any company in the world. Believing in serendipity, Carr fully embraced her posting at the helm of the ASCS. ‘Opportunities come your way when they do,’ she says. ‘It was a very satisfying year but if I could have picked the timing, I probably would not have been chairman at the same time the company went through an IPO.’
Carol Ward, Carr’s replacement as ASCS chairman, takes on the position at an equally demanding point in her career. As corporate secretary and chief compliance officer of Cigna Corporation, Ward wears two hats.
As chief compliance officer, she makes sure the company adheres to various legal requirements related to Cigna’s business. ‘The two roles are somewhat unrelated except that [as chief compliance officer] you fall under a really big corporate governance umbrella because you are organizing how to do things right,’ explains Ward. Juggling both positions is simply ‘a lot of hard work’, she confesses.
Unlike Carr – who had several corporate postings at companies including American Natural Resources, AT&T and ITT before taking on her current position – Ward has spent most of her career at Cigna. After joining the company’s investment and group insurance law departments in 1983, she moved into the role of corporate secretary in 1992. Then in 1999, the role of chief compliance officer was added to her responsibilities. When asked how she plans to handle three hats in the coming months, Ward is straightforward: ‘Just by continuing to work hard and organize things well – the same way Gwen [Carr] did.’
With approximately 4,200 representatives from around 2,800 private and public companies in the US and Canada, the ASCS is the lifeblood of the corporate secretaries community. Members of the ASCS are involved in a number of corporate arenas including corporate governance, records management, the regulation and trading of securities, proxy solicitation and other shareholder activities.
High standards, low cost
In a year that saw many corporate budgets slashed in half, corporate secretaries are facing a challenge to instill good practices at a low cost. ‘We share the challenge of our business compatriots who are trying to be efficient, effective and productive,’ says Ward. ‘At the same time, we are trying to make sure we continue to meet the needs of our various constituencies.’
Carr, on the other hand, does not think the mavens of records management are being affected by tighter corporate budgets. ‘For the last ten years, companies have had a heightened focus on cost, so corporate secretaries have always been challenged to incorporate governance structures in a cost-effective way.’ According to Carr, new technologies are providing alternatives, helping hold down costs and provide information to shareholders.
In an effort to promote sound corporate governance practices, the ASCS has been active on a number of issues this year. In February, the society sent a letter to the SEC, NYSE and Nasdaq-Amex commenting on the SEC’s proposed rule for shareholder approval of broad stock option plans. The ASCS clearly wants to encourage constructive debate on this topic. It points out that while many larger and older public companies already look to secure investor approval for stock option plans, a mandatory requirement on this would prove a burden to all public companies, regardless of size or age. ‘Emerging public companies may be limited in the cash compensation it can pay to employees,’ the letter observes, ‘thus compensation payable in stock enables the issuer to attract qualified employees to secure its success and allow all employees to participate in that success.’
Carr says US corporate secretaries have faced new SEC disclosure requirements this year: ‘Companies must now report auditor fees separately; fees for audit services are reported separately from fees for non-audit services.’ This reporting structure comes in the wake of the SEC’s recent review of auditor independence and follows an earlier SEC requirement that companies include a report of their audit committees in their proxy materials. ‘As a service organization, we brought these new requirements to the attention of the members and included samples of disclosure formats on our web site,’ adds Carr.
Ward notes that the majority of corporate secretaries have made the necessary changes to their disclosure practices in this past proxy season. And she adds: ‘If the SEC changes the rules again, we will learn to comply once more.’
Retrospective
Looking back on her year at the helm of the ASCS, Carr says the most important goal she accomplished was revamping the organization’s web site. ‘We redesigned it from a visual perspective to make it more user-friendly and added a lot more information for our membership.’ Hits to the ASCS site have now quadrupled, she reports.
Throughout her tenure, Carr appointed a number of task forces to work on specific projects. One important initiative was a re-examination of the society’s corporate governance practices. ‘As a corporate governance organization, this was an essential project for us to undertake,’ she says. A second project involved analyzing the society’s chapter structure by retaining an outside consulting firm to conduct focus groups.
‘This was a very productive year,’ Carr summarizes. By working with staff at the society’s national headquarters in New York and the board of directors, she was able to accomplish her initiatives and ‘put in place processes which will benefit the society in the future.’ Carr makes special note of the commitment she received from her fellow board members in working on projects. ‘Their dedication made me appreciate how gifted my fellow corporate secretaries are, and it was a pleasure to have the opportunity to work with them.’
Looking ahead
In the coming year, Ward would like to continue leveraging technology: ‘We will make greater use of e-mail and perhaps offer online training sessions in the future.’ Ward is conscious of the importance of having a finger on the pulse of current issues affecting the role of corporate secretaries. ‘We have to make sure we give support and education to our members as these various issues arise,’ she says.
Ward is also aware of new demands on corporate secretaries. ‘Corporate secretaries are having to do more and do it efficiently – we can help them do their job.’ The new chairman also plans on enlisting the society’s national staff to help her reach these goals. ‘If you look at what they have accomplished this year with Gwen, they are very competent professionals, and I plan on asking on a lot of people for help.’
Ward has always taken an active interest in sharing information and experience with her colleagues. Along with her involvement with the ASCS, she is a member of the Connecticut and Georgia Bars, the American Bar Association, the American Corporate Counsel Association’s Securities Law Committee and the Stockholder Relations Society of New York.
Ward first became interested in the corporate secretary’s function in 1986, when she was invited to become the assistant to Cigna’s then corporate secretary. She became a member of the ASCS in 1992, the same year she took over as Cigna’s corporate secretary. By that time Ward had participated in ASCS events and regional activities, and had written several speeches for her predecessor.
After working at Cigna for almost two decades, Ward says she has an evolutionary view of her company’s governance structures. ‘We are always looking for ways to improve our processes and so we tend to tinker rather than make radical changes,’ she explains. ‘Things really evolved at Cigna; so rather than being revolutionary, we have remained consistent with the needs of the business and the shareholders.’
The title of this year’s annual ASCS conference, to be held in Colorado Springs, is ASCS: Governance Across the Board. Ward says ‘across the board’ refers to senior management, the board of directors and shareholders. ‘Governance covers a lot of topics and we are trying to address the needs of our various members. We have members from Nasdaq and NYSE-listed companies as well as folks who practice mostly securities law and others who are involved in serving the shareholder population.’ In order to accommodate the interests of its wide membership, this year’s ASCS conference includes numerous breakout sessions to address the particular needs of different professionals.
For more information, visit ascs.org.
