July 24, 2006
The watcher | As the new CEO of the Corporate Library, Richard Bennett has his eyes fixed on business misdeeds
By Taylor Smith
Call it Meet-and-Greet 101. When Richard Bennett, 43, took over in early June as CEO of the Corporate Library, a Portland-based research firm specializing in corporate governance, he made a point to sit down with each of the company's 40 or so staffers. Each meeting lasted about an hour and was a one-on-one affair. "I wanted to find out what their aspirations were personally and for the company, and it's really pointed the direction in many ways," he says.
For Bennett, a four-term state senator who last month replaced Karen Lowell as CEO of the Corporate Library, the meetings weren't a gambit to ease his transition into the company. Instead, he says, the employee meetings gave him a much clearer picture of the company's potential. "Financial statements don't count your major asset of a knowledge-based business, which is your collection of people," he says. "And we have an extraordinary collection of people."
That's good news for a company that Bennett bills as a "collective enterprise," and one that's counted among a small but growing group of independent corporate governance watchdogs. The Corporate Library was started in 1999 by Robert A.G. Monks and Nell Minow, the principals of Lens Investment Management, where Bennett at the time was serving as director of corporate governance. (He's been a board member of the Corporate Library since its inception.)
The company keeps tabs on the boardrooms and executive suites of North America's publicly traded companies, flagging instances of potential misdeeds such as an outsized executive compensation package or a too-chummy board of directors. And because many in the investment world believe there's a strong correlation between good corporate governance and strong investment results, information from companies like the Corporate Library can be a hot commodity. For example, a number of investment companies like CalPERS, the pension system that controls more than $200 billion in retirement funds for current and former state employees in California, depend on the Corporate Library to vet their holdings for signs of corporate malfeasance.
As a result, Bennett says the company has experienced strong growth, noting that annual revenues of between $1 million and $2 million just 18 months ago are now "considerably above that." But to keep its position in the corporate governance field, says Bennett, the Corporate Library needs to continue burnishing its reputation as a company that can deliver what others can't.
That means revving up the Corporate Library's line of products ˆ which already includes proprietary products like the Board Analyst, a tool that evaluates corporate policies like executive pay and the effectiveness of corporate boards. It means adding custom reports and specialized analysis that goes beyond dishing out plain-vanilla scoops of information, says Bennett. In short, it's taking the same data that other companies offer and packaging it in a way that's more interesting for the customer. "Providing some context and color, that's where we really add value," he says.
Going forward, Bennett says he'd like to expand the company further into the investment industry, perhaps by providing research to money managers to help guide their investment decisions or by acting as a sub-advisor to a family of mutual funds. But if demand continues to grow for the company's products ˆ and the Corporate Library continues to add to its offerings ˆ Bennett will face the question of how to present usable information to its customers. "The real challenge in this business is what do we pick for information and analysis, and how do we deliver it?" he says. "But we're not just commoditized data, we're not just information. We're knowledge and, hopefully, we're wisdom, too."
For Bennett, a four-term state senator who last month replaced Karen Lowell as CEO of the Corporate Library, the meetings weren't a gambit to ease his transition into the company. Instead, he says, the employee meetings gave him a much clearer picture of the company's potential. "Financial statements don't count your major asset of a knowledge-based business, which is your collection of people," he says. "And we have an extraordinary collection of people."
That's good news for a company that Bennett bills as a "collective enterprise," and one that's counted among a small but growing group of independent corporate governance watchdogs. The Corporate Library was started in 1999 by Robert A.G. Monks and Nell Minow, the principals of Lens Investment Management, where Bennett at the time was serving as director of corporate governance. (He's been a board member of the Corporate Library since its inception.)
The company keeps tabs on the boardrooms and executive suites of North America's publicly traded companies, flagging instances of potential misdeeds such as an outsized executive compensation package or a too-chummy board of directors. And because many in the investment world believe there's a strong correlation between good corporate governance and strong investment results, information from companies like the Corporate Library can be a hot commodity. For example, a number of investment companies like CalPERS, the pension system that controls more than $200 billion in retirement funds for current and former state employees in California, depend on the Corporate Library to vet their holdings for signs of corporate malfeasance.
As a result, Bennett says the company has experienced strong growth, noting that annual revenues of between $1 million and $2 million just 18 months ago are now "considerably above that." But to keep its position in the corporate governance field, says Bennett, the Corporate Library needs to continue burnishing its reputation as a company that can deliver what others can't.
That means revving up the Corporate Library's line of products ˆ which already includes proprietary products like the Board Analyst, a tool that evaluates corporate policies like executive pay and the effectiveness of corporate boards. It means adding custom reports and specialized analysis that goes beyond dishing out plain-vanilla scoops of information, says Bennett. In short, it's taking the same data that other companies offer and packaging it in a way that's more interesting for the customer. "Providing some context and color, that's where we really add value," he says.
Going forward, Bennett says he'd like to expand the company further into the investment industry, perhaps by providing research to money managers to help guide their investment decisions or by acting as a sub-advisor to a family of mutual funds. But if demand continues to grow for the company's products ˆ and the Corporate Library continues to add to its offerings ˆ Bennett will face the question of how to present usable information to its customers. "The real challenge in this business is what do we pick for information and analysis, and how do we deliver it?" he says. "But we're not just commoditized data, we're not just information. We're knowledge and, hopefully, we're wisdom, too."
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