One of the founding fathers and true visionaries of modern corporate governance is Ira Millstein. The WSJ asked him for his thoughts on the BRT’s stakeholder statement (he says it is not specific enough) and on the state of corporate governance today. An excerpt:
In 1979, the Business Roundtable conducted a series of hearings and concluded that boards of directors had to be much more interested in corporate governance. Corporations had to be managed and directed by the board. They also said one of the things the board has to do is pay attention to its constituents, including the community and labor. In 1981, they issued a new statement, and I helped them draft it, because I was young and vigorous at the time.
It undoubtedly has what I would like them to include now. In 1981, they said, not only do we believe in corporate responsibility, but we have to do something about it. They had policies: the right personnel, adequate structure, what changes should be made in staffing and attitude.
I think [the current Business Roundtable] should have gone back and taken a look at the ’81 statement and said, “Look, we knew all this in 1981 and we didn’t do anything about it. We laid out our own map and didn’t follow it.”