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| Best Practices |
Action Figures
Suzanne McGee
08/02/2004
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It can consume immense amounts of both time and energy, cost us untold
thousands of dollars, damage our relationships with friends and, ultimately,
prove unsuccessful.
None of this stopped shareholder activist Robert Monks.
For two decades, he has crusaded to force corporations to adopt best practices
in everything from executive compensation policies to business strategy. The
subject of a book, A Traitor to His Class: Robert A.G. Monks and the Battle to
Change Corporate America (once reviewed favorably by none other than former Tyco
CEO Dennis Kozlowski), Monks was born into an affluent New England family, and
he married into another well-to-do family. His clergyman father bequeathed to
him not just a fortune, but also a strong set of values. “I ran companies; I was
a company lawyer,” Monks remembers. “But it became clear to me that people who
run large corporations have a lot of power and have used it to enrich
themselves. It’s just logical: people don’t give up power easily.”
Monks set
out to persuade them. In the early 1980s, he founded Institutional Shareholder
Services (ISS), a firm based in Maryland that advises investors on corporate
governance issues and proxy voting. A decade later, he launched Lens, an
investment fund that bought stakes in underperforming and poorly governed
companies and aimed to solve their problems by shaking up their management and
improving their corporate governance. Lens’ portfolio outperformed the S&P
500. Monks shut it down in 2000; he plans to launch a governance hedge fund next
year. He will seek to profit by selling short the stocks of poorly run
companies.
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