CORPORATE GOVERNANCE

CED Releases Built to Last: Focusing Corporations on Long-Term Performance, Urges end to “Short-Termism”

An increasingly short-term focus by many business leaders is damaging the ability of public companies to sustain long-term performance. This trend is hampering growth in the American economy. That is the message of a new report, Built to Last: Focusing Corporations on Long-Term Performance, from CED. The report was released at an event on June 27, 2007 in New York City that featured a keynote speech by William Donaldson, former SEC Chairman.  Mr. Donaldson, a CED Trustee is the Chair of CED’s Subcommittee on Corporate Governance, which produced the report.  A panel of corporate governance experts took part in the release event.  The report offers recommendations for corporations to improve performance by focusing on long-term goals and Former Chairman Donaldson believes an end to “short-termism” is necessary.  “Short-termism” is defined as an undue focus on meeting quarterly forecasts and a lesser emphasis on long-term planning.

The CED panel at the release event: William Donaldson, Patrick Gross, Cono Fusco, and Jeff Diermeier, with Charles Kolb at the podium.
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The panel at the Built to Last: Focusing Corporations on Long-Term Performance release luncheon:

Cono Fusco
Managing Partner of Strategic Relationships, Grant Thornton LLP
CED Trustee

Pat Gross
Chairman, The Lovell Group
CED Trustee

Jeff Diermeier
President and CEO, CFA Institute

Moderator: Charles Kolb
President, Committee for Economic Development


Keynote Speech  |  Press Release  |  Full Report

CED Releases Recommendations for Improving Corporate Governance
Private Enterprise, Public Trust: The State of Corporate America After Sarbanes-Oxley

The highly visible accounting scandals that surrounded the collapse of Enron, WorldCom and several other major companies -- together with the revelation of fraud and other acts of malfeasance by corporate executive -- have aroused public outrage, called into question the values and ethics of business leaders, and undermined the public's confidence in public companies. CED is concerned about the reality, as well as the appearance, of corporate impropriety.

March 21, 2006, CED released Private Enterprise, Public Trust: The State of Corporate America After Sarbanes-Oxley, a policy statement that examines the state of corporate governance in the United States and offers practical recommendations for restoring public trust in business. The report was released at Washington, D.C. forum that featured remarks by the Honorable Christopher Cox, Chairman of the U.S. Securities and Exchange Commission (SEC).

SEC Chairman Christopher Cox addresses the CED luncheon as CED Co-Chair - and former SEC Chairman - Roderick Hills listens.

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Additional remarks were heard from CED Co-Chair Roderick M. Hills, Partner, Hills Stern & Morely LLP; Joseph Minarik, Sr. Vice President & Director of Research, CED; Cono R. Fusco, Managing Partner - Strategic Relationships, Grant Thornton and Patrick McGurn, Executive Vice President, Institutional Shareholder Services.

Sarbanes-Oxley regulations and other new government-imposed rules, though beneficial on balance and deserving of time to become fully effective, are not sufficient to restore trust in business, notes the CED statement. CED recommends additional practical and effective changes -- in financial statements, executive compensation, selection of corporate boards, and other matters -- that do not require new government mandates.

CED's recommendations include:

For more information, please contact Amy Morse at 202-296-5860 ext.24 or amy.morse@ced.org.

Full Report  |  Summary  |  Press Release
 

William McDonough Addresses CED Corporate Governance Forum

Public Company Accounting Oversight Board Chairman William McDonough (center) with CED Trustee Roderick Hills, Chairman, Hills & Company, (right) and CED President Charles Kolb (left).
William McDonough addresses luncheon audience on corporate governance reform. 
A keynote speech by William J. McDonough, Chairman of the Public Company Accounting Oversight Board (PCAOB) highlighted the CED corporate governance reform forum held at the Willard Hotel in Washington, DC on April 13th. Chairman McDonough outlined the work of the PCAOB (created by the Sarbanes-Oxley Act of 2002) and touched on reforms that he thinks are necessary to improve corporate governance and restore shareholder confidence. McDonough said he believes that excessive CEO compensation is a serious problem and that the practice of predicting corporate earnings must be reconsidered. The luncheon speech attracted 150 attendees from Washington business and political circles.
 

Corporate Governance Forum in New York City

CED Trustee Dr. Clifford R. Wharton, Jr., Former Chairman & CEO, TIAA-CREF, spoke at CED's Corporate Governance Forum. He was joined by CED Trustee Dolores D. Wharton (right), Former Chairman and CEO, The Fund for Corporate Initiatives, Inc. and W. Bowman Cutter, Managing Director, Warburg Pincus.
 
CED Trustee Roderick M. Hills, Partner, Hills & Stern, speaking at CED's April 16th Corporate Governance Forum.
 
On April 16, 2003, CED hosted a Corporate Governance Forum in New York City. Numerous CED Trustees joined CED President Charles E. M. Kolb and Trustee Roderick M. Hills, Partner, Hills & Stern, to discuss the issue of corporate governance in America. Alex Berenson, reporter from the New York Times and author of the recently released, The Number: How the Drive for Quarterly Earnings Corrupted Wall Street and Corporate America, spoke to the group about his perception why US companies commit corrupt acts. CED Trustees have decided to form a subcommittee to further explore the issue of corporate governance. For more information, please contact Everett Ehrlich at (202) 296-5860 or everett.ehrlich@ced.org.