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Jan 30, 2019

How Atlas Air targets governance best practices

Why Atlas Air Worldwide won the 2018 Corporate Governance Award for governance team of the year (small to mid-cap)

‘This past year [marks] the most we have achieved,’ says Adam Kokas, executive vice president, general counsel and secretary of Purchase, New York-based Atlas Air Worldwide. And that’s coming from the head of a governance team that has an excellent track record of pursuing best practices.

Not to mention that Atlas Air was also short-listed in three other categories at the 2018 Corporate Governance Awards: best compliance and ethics program (small to mid-cap), best shareholder engagement and best proxy statement (small to mid-cap). That’s quite a year.

For one thing, Kokas and his team have been involved in board refreshment efforts; the board has been joined by five new directors since 2016. And, amid growing pressure for more female representation and relevant skills matrices on boards in general, the company’s two new directors in 2018 are both women – Jane Lute and Sheila Stamps – with Lute having significant cyber-security experience and Stamps having banking and finance experience. The emphasis on diversity means 30 percent of the 10-person board is now female, with 50 percent comprising ‘diverse members.’ 

The governance team has also been instrumental in a highly effective shareholder outreach campaign, which led to Atlas Air securing a dramatic change in fortunes in terms of investor voting. This includes an increase in support for say on pay from 32 percent in 2017 to 94 percent in 2018.

Atlas Air’s outreach program, which takes place both in-season and off-season, has recently targeted shareholders representing roughly 75 percent of the company’s outstanding shares. These discussions have been led by the general counsel and CFO but, over the past year, board members have played a greater role in engagement, according to Kokas. As part of the efforts to turn around the say-on-pay vote, the compensation committee held monthly meetings, and total shareholder returns were added as a metric to the compensation plans.

The governance team has a strong relationship with the board, as can be seen in its extensive work with directors. For example, Kokas runs the onboarding process for new directors, ensuring among other things that they meet business heads, the COO, chief marketing officer, head of security and head of IT. The governance team also ensures there is an annual board and committee self-assessment, which this past year was managed by an independent third party – something that has rapidly become a best-practice alternative to using traditional paper-based questionnaires.

Among other things, the governance team gives directors updates at in-person board meetings on governance best practices in areas such as shareholder activism, proxy access, SEC disclosure rules, CEO succession and talent development. Meanwhile, its work on continuously improving the proxy statement this past year has led to enhanced readability, greater use of graphics and adding ESG disclosure to keep shareholders well informed in an area of increasing concern.

This article originally appeared in the latest Corporate Secretary special report. Click here to view the full publication.