Ready For Their Close-Up: Corporate Secretaries and “The Shape of Things to Come”

Part One of Three

The TakeAway: The recent annual conference of the Society of Corporate Secretaries and Governance Professionals focused on “The Shape of Things to Come”—that is, key issues and trends affecting corporate accountability and sustainable prosperity. In so doing, it provided further evidence of the importance of these underappreciated (and under-resourced) governance professionals, who are pivotal intermediaries in the restoration of trust in business enterprise and capital markets. Part One looks at how and why corporate secretaries matter. Part Two briefly summarizes what the conference covered. Part Three examines more closely the interrelated themes of psychology / behavioral science; education and learning; and moral reflection and judgment that undergirded conference proceedings—with ongoing implications for professional practice.

Okay, I know it’s vacation time, but here’s a pop quiz: Who’s the most underrated influence on promoting sustainable, accountable, and just business enterprise?

(A) Dissident shareholders;

(B) Prosecuting attorneys;

(C) Consumer activists;

(D) Jon Stewart and Stephen Colbert;

(E) Corporate secretaries;

(F) Whistleblowers.

If you picked (E), you get to ring the bell. (The others, of course, are influential too, but they get far more attention.)

Bell ringing is what the Society of Corporate Secretaries and Governance Professionals[1] did yesterday at Nasdaq, where Society President and CEO Ken Bertsch rang the closing bell. Nine days earlier, the Society wrapped up its hugely informative, entertaining, and cutting-edge national conference, the 66th in its history. More than 800 paid attendees, sponsors, speakers, and guests descended upon Washington, D.C. (the first time in that city) to learn from presenters and each other about how best to address “The Shape of Things to Come”. They tackled an eclectic array of governance matters likely to occur over the next five years, affecting public, private, and nonprofit organizations of all shapes and sizes.

Why does this matter? Because corporate secretaries now play a significant but vastly underappreciated role in promoting corporate responsibility, sustainability, and good governance. They’re the link among owners, boards, and management, between internal and external stakeholders. As such, they’re pivotal intermediaries in reconciling complex and sometimes competing claims, and operate within a highly volatile environment featuring heightened public expectations about the right thing to do.

This is a far cry from days of old (that is, ten years ago, pre-Sarbanes-Oxley), when the corporate secretary’s job was far less dynamic, dominated by record-keeping more than anything else, within an adversarial operating environment.

The job has come a long way since 2002, a transformation on vivid display July 11 – 14, through both formal conference proceedings and offsite meetings and exchanges. “It’s the biggest conference we’ve had in a long time,” said conference chair Doug Chia, Assistant General Counsel and Corporate Secretary at Johnson & Johnson. “We’ve managed to jam in a lot in just 2½ short days, with over 120 speakers.”

Jam in a lot, indeed. This Post, the first of three parts, touches upon key changes in the nature of the corporate secretary’s job. This is something CSR and sustainability professionals, mainstream media (both legacy and emerging), and the general public needs to understand.

Part Two summarizes briefly what the conference covered, in sessions devoted to key issues affecting shareholder engagement, board decision making, management operations, and professional skill building. Political and policy trends were on the agenda, too, including upcoming SEC rulemaking. (Ning Chiu of the law firm Davis Polk also provides an excellent overview.) Many of the sessions were recorded, presumably for access at some future point. Conference planners assembled an illustrious group: many were authors of recently published books on conference topics.

Part Three delves more deeply into three meta-themes I detected running throughout many of the presentations. They include the importance of psychological insights, educational pedagogy, and moral deliberation in making corporate enterprise more accountable and productive.

Chia, the planning committee, and the Society team received well-deserved praise for successfully organizing and running such a uniformly high-quality affair, which included separate tracks for spouses and families. While it was impossible to sample everything, they offered up tantalizing topics worth pursuing even after the proceedings ended.

Indeed, the Society might consider ways in which ongoing engagement and collaborative learning on conference topics might occur, offsite and online. That’s a juicy opportunity facing next year’s planners, chaired by Jim Brashear, Vice President, General Counsel, and Corporate Secretary at ZixCorp. The 2013 conference is slated for Seattle, from July 10 – 13.

“There are so many conference experiences you can have within this one conference. That’s what we intended to create from the beginning,” Chia said.

Nota bene: an overview of conference-related Tweets with the hashtag #Society12 can be seen at the Storify page curated by Fay Feeney, Founder and CEO of Risk4Good and a “digital whisperer” to boot.

Evolution and Growing Pains

The corporate secretary’s role has changed significantly over recent years, as have expectations for what it takes to do the job well. Ken Bertsch’s appointment in the fall of 2010 signaled as such, as I wrote in October 2010.

In addition to being Type A organizers and good notetakers, they now need to possess intellectual, temperamental, and communication skills that enable them to work well with a wide range of ideals and people.

They must anticipate and help the firm address profound changes within the business operating environment having a material impact (where the definition of “materiality” is expanding), along with rising expectations from all sides regarding performance accountability and excellence.

They also must manage the tripartite balance among directors, executives, and owners, as well as interface between internal and external corporate stakeholders.

No longer the silent scribe, corporate secretaries now play multiple roles—trend spotter, educator, mediator, traffic cop, player-coach, shuttle diplomat, to name a few. They’re key agents in the movement toward more sustainable, just, and accountable enterprise. Yet their roles remain underappreciated and under-resourced in the more visible (and expanding) constellation of “good governance” professionals and players.

Doug Chia, in a web interview conducted during the July conference, reflected on the job’s evolution and growing pains, particularly given escalating demands for broader engagement with shareholders and other stakeholders.

“It’s put a lot more time demands on the job,” he said. “The corporate secretary’s job now is becoming a combination of the traditional corporate secretary, in terms of doing board work, general governance work and securities work.

But now you also have a role to play in investor relations. You have a role to play in public relations, government relations. You’re really being put at the crossroads of many decisions at the company, that involve parts of the corporate function that the corporate secretary probably didn’t have that much interaction with before. All of a sudden, they’re saying, We need the corporate secretary in the meeting, or you’re saying, I need to be in that meeting because I have stakeholders who really care about this issue.

I think that’s happening more than ever before. And therefore, a corporate secretary’s calendar can get filled up very quickly with all kinds of after-school assignments, if you will.

Meanwhile, as greater attention is focused on corporate boards, they’re leaning on corporate secretaries for information and counsel. But there are real implications for how the rest of a company responds, too. Changes in the corporate secretary’s job have a ripple effect, which affects how they’re perceived in the organization.

“It’s the director, but it’s also the management,” Chia told interviewer T.K. Kerstetter, President of Corporate Board Member, who, along with the Society, co-produces the “Governance Minutes” on-demand web show series. Governance Minutes launched last March; other segments include an interview with CSR pioneer Tim Smith, Senior Vice President of Walden Asset Management, on 2012’s environmental, social, and governance [ESG] proxy proposals; longtime governance expert Sarah Teslik’s take on broader proxy trends and patterns; audit firm rotation; and an interview with Anthony Horan, corporate secretary of JPMorgan Chase.

“I think that management is realizing that, or having to understand, that certain issues actually are corporate governance issues, where they might not have thought that before,” Chia said. “Your role is to be there to explain why or why not something is a corporate governance issue. So a lot of it is really educating your own colleagues that you work with every day, in terms of why is it that the corporate secretary is finding his or her way into so many areas of the corporation.”

Shuttle Diplomacy

This process of educating management is likely to grow, Chia believes, posing the biggest challenge to corporate secretaries over the next 18 months. That’s because “a lot of boards already understand corporate governance issues. They have a pretty good feel for this kind of thing. Many of them have been in positions prior, where they saw this, they had an external role.”

He acknowledges that different companies face different situations, that scale and scope affect priorities. Nevertheless, in addition to making room on calendars to meet with external stakeholders, corporate secretaries must help insiders understand why things like greater disclosure are important.

“People inside the company, they’re not quite sure, Why are people asking for additional disclosure? Why should we give it to them? If it’s not required, what is the advantage?” Chia said. “People are always going to find the downside of additional work, additional disclosure.

And there you have to play shuttle diplomat. You have to explain to people internally, why this is important on the outside. And explain to the people on the outside why disclosure is not just this kind of snap your fingers and numbers appear, and we can just disclose whatever we want in whatever form you wanted it.

So it’s really, you end up playing that shuttle diplomat, of trying to explain to the outsiders what the inside view is, and to the inside what the outside view is.

 

Next: A rundown of enduring standout moments at The Shape of Things to Come


[1] About Society of Corporate Secretaries and Governance Professionals: Founded in 1946, the Society is a professional association of over 3,000 attorneys, accountants and other governance professionals who serve 1,800 public, private and not for profit organizations of most every size and industry. Its members support the work of corporate boards and executive management regarding corporate governance and disclosure, compliance with the corporate and securities laws and regulations, and stock exchange listing requirements. The Society provides educational programs, develops best practices and provides data and constructive comments in response to legislative and regulatory requests for information about the practical implications and likely effectiveness of proposed changes in governance practices or regulations.

 

 

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