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Walden Asks Companies to Consider an Independent Board ChairSubmitted by: Ted Allen, Publications

Walden Asset Management is asking Chevron and more than 30 other companies to consider appointing an independent board chair

In letters to the companies, Tim Smith, senior vice president of Boston-based Walden, points to a recent policy paper prepared by the Millstein Center for Corporate Governance and Performance at the Yale School of Management. The paper concludes that appointing a separate, non-executive chair allows a CEO to focus on managing the company, mitigates conflicts of interest, provides more risk oversight, and can help restore market trust.

Among the other issuers receiving letters are State Street, Becton Dickinson, Staples, Waters Corp., Medtronic, General Mills, AT&T, and 3M. Walden is asking the companies to provide their views on the pros and cons of having an independent chair, and to indicate whether their boards have studied the idea within the past five years.

Meanwhile, investor support for independent board chairs has been growing. So far this year, shareholder proposals seeking that reform have averaged 36.7 percent support across 30 firms, up from 29.3 percent in 2008, according to RiskMetrics Group data.

Among S&P 1,500 firms, 21.1 percent now have independent board chairs, while another 22.7 percent of companies have an insider, employee, or affiliated outsider chairing the board, according to RiskMetrics data.

Full post as published by Institutional Shareholder Services -- Corporate Governance Blog on September 01, 2009 (boomark / email).