Consistent with its mission as a positive force for corporate governance excellence, the Society encourages each of its members, and in turn their companies, to be aware of and participate in debates and discussions of various governance practices that are from time to time propounded or legislated; and it continually provides its members with up-to-date information on governance developments. Members are urged to be students, and sometimes missionaries, of good governance. Indeed, the Society believes that its member Corporate Secretaries are in a unique position to provide value to their Chairmen and Boards of Directors by being their company's Chief Governance Officer, in fact, if not also in title.
The Society believes that good corporate governance results from (1) the independence of judgment of the company's Board of directors, (2) the presence of sound processes to ensure the Board's business judgment is well supported and issues and risks are timely surfaced and dealt with, and (3) an appropriate balance between shareholder rights and the proper exercise of the Board's duties and responsibilities. The specific means to achieve these goals must be tailored to the company's specific circumstances.
The Society encourages its members to assess periodically their company's own governance practices and their Board's effectiveness in light of those company-specific circumstances; giving due consideration to the points-of-view of the company's long-term shareholders and of governance authorities. But while improving external governance ratings may be an expedient consideration so as to remove distracting issues from the table, the Society believes that this is no substitute for thoughtful, sound consideration of what constitutes substantive good governance at a company. The Society stands for governance excellence in fact not just in appearance.
Additional Statement on Governance Rating Systems
The Society also acts as an authority on what corporations are actually doing in the governance area but does not think it appropriate to endorse any set of "best practices". The Society's member companies reflect a wide range of practices, most of which are thoughtfully considered and applied as best suits the company's particular circumstances and corporate culture. Therefore, the Society is skeptical of one-size-fits-all governance prescriptions and notes that some rating systems publish data that may be inaccurate and some are promulgated by organizations that offer fee-based services for consulting to improve individual ratings scores. Similarly the Society does not believe that any governance "score" based on a single set of value judgments about what constitutes good governance practices is a reliable measure of a company's governance. The Society believes that ethics, integrity and independence cannot be legislated and that many governance practice prescriptions tend to elevate form and appearance over substance.