ICCR PANEL URGES CORPORATE LEADERS TO FOCUS ON

Broader definition of loyalty seen as key component to
successful governance

Contact: Norma Vavolizza, Jeff Fogliano
212-687-0607, info@nvcommunications.com

New York, NY, September 26, 2002- Last Thursday's symposium on corporate governance, presented by the Interfaith Center on Corporate Responsibility (ICCR), put a spotlight on recent abuses in corporate governance, while calling for changes that will make the process of building stakeholder value not only more transparent but equitable to all concerned.

"Blueprint for Change: Corporate Governance for the Future" attracted nearly 300 business professionals and academics for a wide-ranging discussion of recent corporate failures, public and private sector response, and the role of organizations such as ICCR.

"The task of corporate governance in the future should be centered on ensuring that a corporation's activities benefit all of its stakeholders," said Prof. Harry Van Buren, "not just shareholders." Van Buren, a Visiting Instructor at the University of Northern Iowa's College of Business Administration, said that when companies create value for everyone-investors, employees, and local communities-good financial results naturally happen. When they don't, unfair practices often follow.

Ken Bertsch, Director of Corporate Governance at TIAA-CREF, New York, said stronger, more independent Boards are essential to good governance. "Managerial dominance is no longer an option," said Bertsch, referring to the rubber stamp role that many Boards played in years past. "Reforms are underway and they should continue," he added.

Federal legislation imposes criminal penalties
The most far-reaching reform to date is the Sarbanes-Oxley Act of 2002, which the panelists said will have a positive impact on accountability. Most significantly, the Act imposes new responsibilities on CEOs and CFOs who could face criminal sanctions for false certification of financial reports.

"This legislation is not a casual thing," said Gwenn Carr, Vice President and Secretary to the Board, MetLife, "it's major and I hope shareholders understand its significance." If a restatement is necessary, she continued, corporate officers face severe criminal penalties. "But the important news," she said, "is that most companies were ready, willing, and able to sign off on their financials by the August 14 filling date."

Carr agreed with TIAA-CREF's Ken Bertsch that the most important factor in good corporate governance is the quality of the Board. But she had concerns about the dampening effect that new regulations may have on future recruitment efforts. "The Board serves management and sets the tone, but we need to be aware of the law of unintended consequences. I am concerned that able people will not be willing to serve because of the enhanced threat of litigation."

Bari-Ellen Roberts, a management consultant and professor, said accountability is by far the most important issue for Boards and corporate managers. "When you can't trust the auditors and accountants to be accountable for reports and disclosures to the public," said Roberts, "who is accountable? No one, and that is exactly the problem."

Roberts, who was lead plaintiff in the multi-million-dollar discrimination suit against Texaco, Inc., said basic changes in corporate governance must take place immediately. Among her recommendations are fully independent auditors; a broader definition of corporate loyalty that includes employees and other interested parties; and a greater awareness of the power of the proxy among stockholders. She applauded ICCR for having taken the lead on governance issues more than 30 years ago.

Sr. Patricia Wolf, RSM, Executive Director of ICCR, said last week's forum is an invitation to corporations and their employees, stockholders, and communities to become actively engaged in the work of justice and social responsibility. "What our panelists affirmed is that when more stakeholders become involved, the outcomes are more likely to be favorable to everyone concerned. You can count on the faith community of ICCR to continue raising its voice on behalf of justice and human rights."

ICCR to host next symposium in California

ICCR plans to hold its next forum on corporate governance this coming June in California. "Our members want to reach the very significant leadership on the West coast," says Sr. Patricia, "which manages activity in many Latin American and Asian markets." She said conference information will be available later this year.

ICCR is a coalition of 275 faith-based institutional investors, including denominations, orders, pension funds, healthcare corporations, foundations, publishing companies, and dioceses. Their combined portfolios are valued at over $110 billion.

ICCR was founded in 1971 when some members of the clergy questioned whether churches were profiting from the Vietnam War through their investments. Since then, ICCR has come to public prominence through its campaign against irresponsible infant formula marketing, which resulted in the Nestlé boycott; and its anti-apartheid efforts in South Africa.

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Editors: To schedule interviews with Sr. Patricia Wolf, RSM, Executive Director of ICCR, and with the panelists of "Blueprint for Change: Corporate Governance for the Future," please contact Norma Vavolizza or Jeff Fogliano at 212-687-0607 or email info@nvcommunications.com.

For cassette tapes of the presentation "Blueprint for Change: Corporate Governance for the Future," please contact Jeff Fogliano at 212-687-0607 or email info@nvcommunications.com.