Responsible Investor

The RI interview: Bob Monks

One of the world’s most prominent corporate governance activists since the 1970s, Bob Monks talks about engagement, hedge fund activists, private equity and why ‘discouraged’ is not part of his vocabulary.

Responsible Investor What are the lessons of 35 years in corporate governance activism?
Bob Monks: I have the perspective of a long period of time in this area and I can recommend it. I feel that what I have been doing is worthwhile and I look forward to getting up each morning and continuing it. That said, I have to say that the record of accomplishment is very slender and there have been many apparent successes that have turned out to be just that: apparent.
Many of the difficulties have occurred in the United States. I think that in the United Kingdom a great deal has been done and I am very encouraged by trends in Europe also. Many of the problems I put at the door of the current administration of the United States, which has perceived the idea of governance as being hostile to the governance of companies. As long as progress in this area is defined as a battle between management and everybody else, success is going to be elusive. If you win such a battle you are going to cause huge damage. This can’t be fought as a battle. It has to be seen as something in which all the parties have an interest and a

stake in trying to create what people in the UK would call sustainable corporations.

Responsible Investor: Is the problem trying to persuade shareholders to have a vested interest in the long-term health of companies?

Bob Monks: The real problem is that the culture is vastly different between here and the US. In America it is a question of power and in the US there is the idea of autocratic power in the chief executive. For example, I go every year to the Exxon shareholder’s meeting and a number of years ago, I pointed out to the chairman that while we were meeting the G8 heads of state were also meeting in St Petersburg. I told him that all the heads of state present at the G8 did not have as much power as he did. I referred to him as ‘emperor’, not to be rude, but to make the board understand that this was the model of the successful US company.
So I said to the ‘emperor’: I’ve got a whole heap of things that I would like to put before the board that I think would be of advantage to the company, and his first reaction was: who the hell is this guy? His second

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