SEC Risk Czar Henry Hu Leads 2010 NACD Directorship 100 Forum
NEW YORK, Nov. 9, 2010 /PRNewswire/ — Speaking at the 11th Annual NACD Directorship 100 Forum, H. Rodgin Cohen, the chairman of Sullivan & Cromwell, last night said: “Risk is the steroids of business, and too often there’s not enough testing in boardrooms.”
Cohen was one of three 2010 Corporate Governance Hall of Fame honorees recognized by the National Association of Corporate Directors last night. He emphasized the need for skepticism in the boardroom for significantly over-performing business units, and the need for not only the proper structure, but also the right mix of people and skills.
In addition to Cohen, NACD Directorship Hall of Fame inductees included Edward A. Kangas, retired chairman and CEO of Deloitte Touche Tohmatsu and current non-executive chairman of Tenet Healthcare and Fortune’s Carol Loomis. Kangas emphasized the individual responsibilities of board members to understand business drivers, risk, and their role as the representatives of shareholders, and Loomis urged improved oversight ranging from accounting and compensation to mergers and acquisitions.
Following the Hall of Fame panel discussion, Becky Quick, co-anchor of CNBC’s “Squawk Box” introduced Henry Hu, the Security and Exchange Commission’s new director of Risk, Strategy and Financial Innovation. Quick noted that SEC chair Mary Schapiro tapped Hu to head the first new division created by the Commission in 40 years because she had “identified someone that first started warning us about derivatives.” Quick continued, “Wall Street engineers must get ahead of what comes down the pike.” Hu was one of the first to recognize the potential risk of derivatives in the early 1990s.
“I have argued that a new modern process has developed along with the emergence of modern derivatives,” Hu continued. The decoupling “phenomenon” occurs in all tranches, and its core mechanism may have played a role in the financial crisis. “The decoupling of voting rights from equity has changed the traditional idea of a one-to-one proportion of votes to shares, allowing – in extreme versions – voters with significant economic interest but no interest in the company’s success.”
“The esteemed boardroom leaders on the NACD Directorship 100 share a common characteristic as proactive agents of change in the boardroom community, shaping the future of corporate governance at a time when American business looks to restore investor confidence and restore economic growth,” said NACD CEO and president Ken Daly.
The NACD Directorship 100 recognizes the most influential players in board leadership and corporate governance. Click here to view the full list of the 2010 NACD Directorship honorees, or go to http://www.nacdonline.org/AboutUs/PressRelease.cfm?ItemNumber=2720.
The National Association of Corporate Directors (NACD) is the only membership organization delivering the information and insights that corporate board members need to confidently navigate complex business challenges and enhance shareowner value. With more than 10,000 members, NACD advances exemplary board leadership. NACD is focused on creating more effective and efficient boards through director-led education and peer forums to share ideas and leading practices based on more than 30 years of primary research. Fostering collaboration among directors and governance stakeholders, NACD is shaping the future of board leadership. To learn more about NACD, visit www.NACDonline.org.