New vibrancy for an old form of business; Today's gravitational pull to private ownership affirms the advantages of an enduring organizational structure: the mutual company.

• Author: Reese, Stuart H.

AS MANY COMPANIES once again embrace the advantages offered by going private--focus on efficiency, ability to plan and invest for the long term, and, above all, a direct relationship with the owners and their value creation expectations--those few companies that have steadfastly committed to the mutual form of ownership wonder what all the fuss is about.

This is how we have been doing business since our founding in the 19th century--through all the fads and cycles--because it works.

While many of our fellow insurers have chosen to go public, at Massachusetts Mutual Life Insurance Co. (MassMutual) we took the contrarian path. We believe those advantages touted by the disciples of the LBO are real. Perhaps the greatest is the ability to focus on the long term. That focus comes, as in any private company, from a direct relationship with our owners. It gives us discipline but it also provides a source of constructive freedom as we build a winning company for the future.

Our policyholders--not the shareholders who own publicly traded companies--have owned this company for over 150 years, and we are intensely aware of the obligation we owe them. Their capital, confidence, and commitment enabled us to build the company we manage for them today. Every day we walk into our offices we are reminded of that history, and that awareness guides the way we manage.

Overriding strategic objective

Some believe this focus on the policyholder makes mutuals more risk-averse and conservative. On one point, I would agree: We are prudent, in that we will not offer products or take actions that would impair our financial strength or long-term commitments to policyholders. Our overriding strategic objective is to maximize the value to our policyholders while protecting and enhancing the outstanding financial performance of our company.

At the same time, however, we at MassMutual are strategically committed to high product performance, business diversification, and efficiency. Introducing competitive new products that meet the evolving needs of our customers is good business. Good for growth; good for customer relationships.

Our owners, unlike many public shareholders, are more aligned with our customers' interests. That's because they are our customers. This is a very real benefit that contrasts with our publicly held competitors in at least one major respect. Shareholders at public companies are often willing to accept greater risk in exchange for a higher...