The Best Learning Resources on Corporate Governance: Robert A. G. Monks Shares His Picks (Podcast)
For whom is a corporation run? Is corporate governance a legal topic? An economic one? Or does it just boil down to ethics? CFA Institute interviewed Robert A. G. Monks, a pioneer of corporate governance, to get his picks for the best learning resources to help answer these important questions.
Monks has a long and distinguished career in corporate governance, having served in a variety of roles including investor, activist, and writer. The British newspaper the Independent, recently called him “scourge of the ‘corpocracy’,” and it’s not hard to understand why. Speaking at the CFA Institute 2010 Annual Conference, Monks told the audience how he once said to the chairman of a very large corporation that given the chairman’s economic power and low degree of accountability, a more befitting title for him was “emperor.” Monks then asked the chairman why his compensation was 16 times that of his predecessor.
In a recent interview with Monks (embedded above), we came away with a wealth of learning resources in corporate governance. Here are some of his picks:
- Print: Monks strongly believes case studies are the best way to learn about corporate governance, and books that provide such case studies — including the one he has coauthored, Corporate Governance, which is in its fifth edition — are the ones to read. Perhaps for the same reason, Monks tends not to think very highly of journals, which generally rely more on econometrics rather than case studies to analyze corporate governance issues.
- Websites: Monks seems to prefer the Harvard Law School Forum on Corporate Governance and Financial Regulation, which he described as a “very high quality, well edited blog.” Among other websites, he also listed Corporate Governance (CorpGov.net) as a useful resource.
- Video: Monks has “an all-time favorite,” the 2003 documentary, The Corporation, which he described as “particularly helpful and useful.” He thinks there are a number of other good movies, including Enron: The Smartest Guys in the Room, Too Big to Fail, and Margin Call.
- Live, in-person education: Monks thinks “there is no shortage of programs,” such as those offered by Harvard Law School, the University of Delaware, Standford University, and Baruch College.
- Online learning: Monks listed RI Academy, which provides structured online learning on environmental, social, and governance (ESG) issues; New York Institute of Finance; and Edinburgh Business School.
- Conferences: Monks prefers the events organized by the International Corporate Governance Network (ICGN), a global membership organization, which features “excellent speakers.” Monks also recommends events organized by the Principles for Responsible Investment (PRI), which sometimes holds events relating to ESG issues in conjunction with ICGN. In addition to offering great content, these events are an effective way of networking with people who are at the forefront of their organizations’ efforts in the corporate governance arena.
- Twitter: For keeping up with corporate governance happenings on Twitter, Monks suggests using #CorpGov for searching for relevant tweets. He also suggests following Simon C. Y. Wong (@SimonCYWong), a practitioner of corporate governance and visiting faculty member at London School of Economics; Nell Minow (@nminow), Monk’s business partner and coauthor; James McRitchie (@corpgovnet), the editor of CorpGov.net; and Stephen Davis (@SMDavisCorpGov), the associate director and senior fellow at the Harvard Law School Program on Corporate Governance.
At the end of the interview, I asked Monks to tell us what investment professionals should bear in mind as they use the learning resources recommended by him. He said that ownership of companies has become very diluted relative to the emergence of the first corporation about four centuries ago, tipping the balance of power to corporate leadership. Monks believes that “corporate governance really is about accountability” to the shareholders and to others that corporations impact, and this is what investment professionals should bear in mind.
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