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Gretchen Winter
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Email: gwinter@illinois.edu

Governance expert tells students to be mindful of executive compensation, boards

Photo: Nell MinowNell Minow’s husband finds it amusing that both of her jobs—movie critic and corporate governance watch dog—require her to do nothing but criticize all the time. “I’m critical by nature, so this (being able to do both on the same day) is just plain fun.”

After speaking on a panel at Roger Ebert’s Annual Film Festival in Champaign on April 24, Minow spent a few hours in the new Business Instructional Facility on the University of Illinois campus sharing strategic insights on corporate governance (see links to streaming video below). Her visit with the business students and faculty was sponsored by the Center for Professional Responsibility in Business and Society at the College of Business.

“Executive compensation packages are the symptom and disease of corporate governance,” she stated as a matter of fact. Executive compensation and a company’s board of directors are indicators of litigation risk, liability risk and investment risk, she noted.

To help analyze a company’s strengths and weaknesses, Minow co-founded of The Corporate Library, an independent research firm renowned for its information and analysis of corporate governance and executive compensation practices.

Of the 3,300 companies listed in The Corporate Library, only seven companies have received an “A” rating. Ninety-one companies have an “F” rating. “If it were up to me, we’d give no A ratings,” Minow admitted, noting that the high rating merely represents “an absence of terrible, not the presence of greatness.”

Corporate governance was not an issue when Minow attended law school at The University of Chicago Law School. And it never came up in the eight years that followed while she worked for the government. Only when she was asked by a colleague to help establish International Shareholder Services (ISS), a firm that advises institutional investors on issues of corporate governance, did she understand the need for more about responsibility of directors and shareholders in holding management accountable.

Now, more than a decade after her first taste of corporate governance, she has been dubbed “the queen of good corporate governance” by Business Week Online and, just last year, was named one of the 20 most influential people in corporate governance by Directorship magazine. Her most recent honor came in 2008 when Minow received the International Corporate Governance Network Award.

“Nell Minow has markedly improved the state of corporate governance over 25 years in a variety of fields,” according to Sandra Guerra, chairman of the ICGN Awards Committee. “In a world where different perspectives reign, Nell is a shining advocate for helping to forge unanimity in corporate governance best practice.”

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UIUC College of Business