On Corporate Governance:

“One of the themes coming out of the engagement with financial institutions that we’ve undertaken is the clear need for an independent chair of the board of directors that represent shareholders. This is conventional wisdom among investors, but a practice that is very rare and almost non-existent in the financial sector…We are strong proponents of an independent chair of a board of directors because we believe that risk management requires a forceful board to serve as a check on the CEO. What investors need is a board of directors that will stand up to strong, willful CEOs with a predilection to risk and will say no or draw the line when they see risk management being compromised. We have seen failures of boards to do that, and we think that having an independent chair of the board is a prerequisite or a predicate to an effective check and balance.”
- Bill Patterson, Executive Director, CtW Investment Group

On Washington Mutual:

“Risk management is too important to delegate to a committee chaired by a conflicted director and that’s why we are recommending that shareholders join with us in withholding support and voting against Mary Pugh at next Tuesday’s director election. And I want to note that our conclusion that Ms. Pugh failed to effectively and independently represent shareholders in her role as finance committee is shared by the three major proxy advisory services as well, RiskMetrics, Glass Lewis and Proxy Governance.”
- Mike Garland, Director of Values Strategy, CtW Investment Group

“We believe that [the Washington Mutual human resources] committee acted contrary to the best interest of shareholders by breaking the link between executive pay and performance, and shielding executive pay from the impact of WaMu subprime loss. We believe that a strong link between pay and performance is a fundamental principle of good governance…We believe it is especially objectionable for a compensation committee, this [Washington Mutual’s] compensation committee, to circumspect an objective and measurable pay standard.”
- Rich Ferlauto, Director of Corporate Governance, AFSCME

“What you’re hearing today on Washington Mutual is a very, very important effort in this area that the AFL-CIO strongly supports, both in itself and as part of a broader effort to see that there is accountability and reform in addressing what the IMF now estimates
to be a more than a trillion dollars in losses in capital markets coming out of the U.S.–centered subprime crisis.”
- Damon Silvers, Associate General Counsel, AFL-CIO

Posted by Anna Mumford on April 9, 2008 2:57 PM