Standards ideology and board reality.

• Author: Shipley, Walter
• Position: Chase Manhattan Chairman and CEO Walter Shipley - Interview

The Business Roundtable rebuffs the `One size fits all' juggernaut. An interview with Chase Manhattan Chairman and CEO Walter Shipley.

In September 1997, the Business Roundtable (BRT) delivered a consequential message to Corporate America and the shareholder activist community: "The substance of good corporate governance is more important than its form; adoption of a rigid set of rules or principles or of any particular practice or policy is not a substitute for, and does not itself assure, good corporate governance " That dictum came in the form of a 21-page white paper, a year in the making, entitled, Statement on Corporate Governance. With this document, the BRT blasted an attention-getting volley across the bow of the movement afoot to set defined standards by which all boards might be judged. (See pages 24-25 for an excerpt from the Statement.)

The BRT represents over 200 chief executive officers of America's largest companies. The organization has been a long-time contributor to the dialogue on corporate governance, beginning in 1978 (see page 27) and most recently in 1990 (see page 26). With the BRT's blunt new warning against "the universal application of rigid formal requirements that do not take into account the individual circumstances of particular companies," some observers speculated that the organization was trying to slow the momentum for codifying model board behavior. Others who welcomed the BRT's Statement included those who similarly distain a formulaic approach as well as those of a more formula-sympathetic bent but who recognize in the BRT's latest soul-searching exercise a move toward more common ground. (See pages 28-31 for samples of principles and practices that are being embraced by diverse entities.)

Walter V. Shipley, chairman and CEO of Chase Manhattan Bank, chaired the BRT's Corporate Governance Task Force. Directors & Boards Chairman Robert Rock and Editor James Kristie paid a call on the head of the country's largest bank to discuss the study that he shepherded and the document that emerged that is contravening the "one size fits all" dogma.

Directors & Boards: Let's start by asking how you came to chair this task force on corporate governance?

Walter V. Shipley: There wasn't anything particular in my selection. I was asked by the then-chairman of the Business Roundtable [CSX Corp. Chairman and CEO John Snow] if I would take on the committee. I was interested in the subject so accepted.

D&B: What kind of a task group did you work with to forge this document?

Shipley: It was basically a dozen or so chief executives and their corporate secretaries and inside counsel. While I clearly spent more time on it than the other CEOs, a member like [General Motors Chairman and CEO] Jack Smith provided a lot of input.

D&B: Before we get into specific issues, lees talk about the timing of the Statement. It had not been that long since the BRT's last governance report in 1990. Did you sense a change in the environment or had you identified...