Directorship 100 2009 I •
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Directorship 100 2009 I • -. •£ • .I-, Directorship Welcome to the third edition of the Directorship 100, the who's who of the eorporatc gov- ernance community, or, more accurately defined, the most influential people in the hoardroom. When we set out three years ago to identify those 100 individnals who exert the most profound influence on the boardroom agenda, it seemed like a daunting task: so many stakeholders in business, government, and the shareholder community, but too fewplaeeson the rosterby order of magnitude. What we also discovered in putting the list together was that in some instances, it beeame impossible to separate the captain from the team. This year's DlOO is a case in point: Our editors and hoard of advisors were nearly unanimous in our seleetion of Pres- ident Barack Obama as this year's most powerful corporate governance influence. And yet, to do justice to the seismic shift his policies have brought about in the boardroom, we also had to recognize the many other "New Voices" in the Administration who are now leading tbe greatest financial reform of .\inerican business since tbe 19^0s. So, we ask that in tbe pages ahead you pay more attention to who counts, and less to how we count, in arriving at our final selection of individuals and institutions tliat have met tbe requirement to he "most influential." We think you'll agree it's an intricate and impressive mosaic where tlie wbole equals much more than the sum of its parts, which may or may not be greater than 100. 22 Directorship October/November 2009 The Most Influential People in the Boardroom I'. ~ J I. October/November 2009 www.directorship.com 23 Directorship 100 2009 RKCULATORS AND RULE MAKERS Team Obama It is often written tliat reasonable people may disagree, and witli role ofthe corporate direetor. Preeminent Americans and their Presidents, it is practically a way of life. Bnt among tliem was the choice of Rahm even an nnreasonable person could only conclude that this Presi- Emanuel as chief of staff. Described as a dent and his Administration are having a profound and lasting veritable "influence machine," within the influence over the boardroom. President Baraek Obama has Administration and Congress, the fonner demonstrated an enormous eapaeity for calm in nncertain times. Congressman from Obama's home state His relative youth leads to freqiieut comparisons to johu F. of Illinois is known as a hard-charging, Kennedy and his communications skills to those of Ronald Reagan. brutally eandid, sometimes combative, But it is his aggressive response to the unparalleled économie chal- acutely intelligeut man who can get lenges that greeted him at the dawn of his young presidency that things done and knows the ways of the Mary Schapiro harkens back to an earlier figure of towering influence. Franklin D. Capitol and the boardroom. Roosevelt. FDR's massive social and Rnaneial reform programs —the cre- The Enforcers ation of Social Seenrity as part ofthe New Deal, the establishment Perhaps second only to Obama in terms of her inflnenee on boards and corporate governance, career regulator Mary Schapiro heads up the 75-yearold SKC. Before the crisis, the agency's very exL-i- tenee was in question: "Obsolete," "out of touch," and "behind the times" were just some ofthe many terms uttered by detractors. The Commission, under fonner chairman Christopher Cox, was pillo- ried for missing the Madoff scandal. As former SEC chairman and Directorship 100 Hall of Famer, Arthur Lxvitt deseribed her: "She has the skills, the intellect, and the character to be a snperb SKC chair." Bnt Schapiro will face a new kind of challenge in the role, not just that of proving her own qualifications, bnt also institnting a significant remodeling ofthe SEC itself, as she works to bring it into the new regulatory era. arack Obama talks Moving swiftly to address regnlatory concems in the wake ofthe Mef_of Staff Rahm financial crisis, tlie SEC has rolled outa series of proposals that could e Oval Office embody the biggest change to the mies ofthe game for direetors in some time. Schapiro, who i.s no straiiger to the bo;irdrooni, liaving served on die boards of Duke Energy aud Kraft Foods, has overseen of tlie Securities and Kxehange Commission (SKC) and the Fed- proposed rule changes on proxy access, broker voting, say on pay, eral Deposit insurance Corp. (FDIC)—helped restore eonfidence and new reqnirements for disclosure on execntive compens;ition and in the nation's banking system coming out ofthe Creat Depres- director qualifications. It's now up to her and fellow commissioners sion. One conld plausibly take major portions of FDR's New Deal Katlileen Casey, Elisse Waller, Lnis Aguilar, and Troy Paredes to and substitute his name with President Obama's. The implemen- determine the final regulations that emerge fi-om the proposals. tation ofthe $787 billion American Keonomic Recovery Act one Other key players Schapiro has brought into the SEC include month after Obama took ofBce, coupled w ith his handling of the Senior Advisor Kayla CHlan, Chief Accountant James Kroeker, and Troubled Asset Relief Program (TARP), which sought to strength- Direetor of Knforcement Robert Kliuzarni. Cillan was a founding en the finaneial seetor by bnying up assets and equity from trou- board member of tlie Public Company Aecounting Oversight Board bled banks, has elearly helped the nation avoid further finaneial (PCAOBl and fomier general counsel to CalPF,RS. Kroeker joined disaster and put the economy on the path to recovery. the SKC as deputy ehief aeeountant in 2007 from Dcloittc and And finally, turning again to the FDR playbook, Obama assem- Touche where he had Ix'en a parhier in the fimi's national account- bled a team of wise men and women, fomiidable economic and ing services group. Kroeker recently said that the proposed road map business minds, whose decisions are having a lasting effect on the for the convergence of International Financial Reporting Standards, 24 Directorship October/November 2009 The Most Influential People in the Boardroom pnshed to the back burner amid the larger issues of market refonn, have failed, creating a new challenge: how to replenish the fund. would be restored as anotlier top prioHt)-. Kluizami, a fomier federal Bair has also been an integral part of the team overseeing TARP. pritsecutor, has pledged to improve the SIi!Cs enforcement per- Neil Barofsky is a former New York assistant attorney general con- formance by creating specialized units to provide "structure and firmed by the Senate in December as special inspector general. resonrces for staff to 'get smart' about certain products, markets, reg- Dubbed the "TARP Cop," his job is to figure out how and where ulatory regimes, practices, and transactions." the $700 billion TARP fu?ids arc spent, reporting directly to the Pres- ident and providing updates to the Congressional Oversight Panel, TARP Overseers chaired by bankruptcy expert and Harvard Law School professor, Another e\am|)lc of Obaina's preference for brains over politics was Elizabeth Warren. COP's first report, released in February, casti- his reappointment of Sheila Bair to chair tlie l''DIC. Anotlier fiscally gated then-Treasnr) Secretar)- Uenr\ Paulson for his performance conservative Republican, on Bair's watch alone tliis year, 94 banks and lack of transparency, reporting that the Treasuiy Department Vcd to the Rescue To prevent American capitalism from spiraling deeper into the and ensure that the President's economic policy agenda is car- abyss, nine months after President Obama made his first Cabinet ried out. announcement, he re-nominated Ben Bernanke as Federal Reserve Rounding out the team, Paul Volcker, the former Fed chief chairman. The former Princeton economics professor was selected under Clinton, was selected to chair the president's economic by Bush in 2005 to succeed Alan Greenspan. In 2008 after the mar- recovery advisory board. And Christina Romer, a former UC ket aashed, Bernanke invoked emergency powers, slashed interest Berkeley economist, who administration sources suggest is well- rates, and spent trillions of dollars to right the financial system. Just regarded by both parties, chairs the Council of Economic Advis- last month, he declared the recession "likely over." Though he sel- ers. Her appointment was seen as a further triumph of brain dom gives interviews, Bernanke is never far from the public eye and over politics in Obama's approach to talent has been a stalwart in the transition between presidential adminis- recruitment. trations and in the effort to stem the economic slide. When then President-elect Obama named his economics team, it included players who, like Bernanke, were already steeped in the crisis details, demonstrated a studied understanding of Depression-era economics, or some combination of both. Enter Treasury Secretary Timothy Geithner and Chief White House Eco- nomic Advisor Lawrence H. Summers, Geithner, who is currently pushing legislation to provide more systematic regulation of financial institutions. Including new limits on executive compen- sation, recently told one interviewer that he is optimistic major reforms will be passed. Prior to his appointment replacing Henry Paulson, Geithner was president of the Federal Reserve Bank of New York and part of the team central to the critical negotiations that resulted in Bear Stearns being tucked into JPMorgan Chase, Merrill Lynch going to Bank of America, Lehman Bros, disappearing, and Citigroup and other struggling banks getting a lifeline. Summers, the former Harvard University economist who became its president following his tenure as Treasury Secretary to President Clinton, is director of the Cabinet's National Eco- nomic Council. The group was established in 1993 to coordinate Left to Right: Christina Romer, Timothy Geithner, Lawrence Summers, and Obama directorship REGULA1X)RS AND RULE MAKERS had overpaid by $78 billion for the assets it bought from banks.