The board of directors of First Commonwealth Financial Corporation (FCFC), for one, March 4 announced it has implemented a series of strategies to better align its interests with those of its shareholders.
‘Sound corporate governance is an essential component of maximizing long-term shareholder value, we are confident that these enhancements will make us a stronger company and will better serve the interests of our shareholders,’ says David Dahlmann, the chairman of FCFC’s board.
Currently, the Indiana-based bank’s governance practices include, among other things:
- The separation of roles such as the chairman from the CEO;
- The requirement that the board and all of its committees be chaired by independent directors;
- A risk committee that oversees and monitors the enterprise risk management process and that consists mainly of independent directors;
- Education programs that allow directors to receive ongoing training in the areas of corporate governance, enterprise risk management, regulatory matters, current events, trends and other relevant topics.
The new governance enhancements consist of:
- An annual election cycle, beginning in 2011. ‘All directors will stand for election to the [corporation’s] board on an annual basis to ensure full accountability for performance and effective governance,’ the bank says.
- With the exception of the CEO, the board shall consist mainly of independent directors. Additionally, board members who are employees of the corporation or its affiliates will not be eligible to stand for reelection.
- The company has put in place new stock ownership guidelines for both the board and executive management that will encourage higher proportions of stock ownership and work to better align the interests of the board and management with those of shareholders.
The Depository Trust & Clearing Corporation (DTCC), for its part, recently decided to separate the chairman and CEO roles. According to the corporation, the addition of a chairman would bring the board closer to its goal of providing superior oversight of risk management.
‘With this governance model, DTCC will be even better positioned to demonstrate the strengths that are a hallmark of its global reputation for bringing certainty, safety and soundness to our capital markets,’ says Art Certosimo, presiding director of the company’s board.
Overall, these corporations have been actively seeking ways to tweak their governance models to meet the growing needs of shareholders.
As for FCFC, ‘these changes were made following an extensive internal governance review and are consistent with our board’s commitment to adhering to best practices with regard to corporate governance,’ Dahlmann adds.