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Feb 03, 2020

Interview with Carol Ward: Lifetime achievement award winner

Carol Ward was the recipient of this year’s lifetime achievement award at the Corporate Governance Awards. Here she talks to Ben Maiden about some of the key challenges and highlights of her career and her belief in mentoring professionals

One of the major projects you worked on was the 2012 spin-off of Kraft Foods’ North American grocery business. What were some of the challenges the transaction presented you with on the governance side?

It was a huge company to begin with. We were splitting it in half – not just dividing it by geography but also by business, leaving the North American grocery business with Kraft and creating a global snacks company, Mondelez International. We had to build two boards, restructure the subsidiaries, duplicate contracts, and so on. [The main challenge was] the timeline to get it all done.

We did some interesting things. For example, we were one of the first to use notice and access for mailing our Form 10 rather than printing it and putting it in the mail. We thought notice and access was more economically and environmentally responsible.

Did practice make perfect having to deal with so many new directors in such a short time?

Well, I’d like to think we were pretty good at it before the spin-off, but we were certainly well practiced by the time we were done! What’s important to remember when onboarding a new director is that each one is different. They learn differently, have different experiences, interests and expectations. Ask them, ‘How do you learn? What are you interested in? How can we make this personal to you?’ Then build onboarding to the person.

When you’re creating two boards at the same time, are you looking for each to include directors with the same types of skillsets?

Mondelez International was to be a global company, so that board needed people who had carried out business globally. Kraft was primarily a North American business. As the board was considering how to divide up the current directors and bring on new ones, the board was looking for people with broad global experience. For Kraft, it was looking for people with very deep North American consumer products experience.

Board diversity has become a more prominent issue over the past couple of years. Was that part of your thinking in 2012?

Absolutely. Diversity takes many forms and we tried to factor that in, and have it reflected in both boards. My interest in board diversity goes back to when I was interviewed for ‘Critical mass on corporate boards: Why three or more women enhance governance’, a study issued in 2006 by Wellesley Centers for Women. At that time, the Cigna Corporation board was exceptional [in that] it included four women.

You also worked on Kraft Foods’ acquisition of Cadbury. What challenges did that present?

I would describe it as a marathon at sprint pace. We announced the offer in the fall of 2009. Early in the first quarter of 2010 we reached agreement. We accepted the last tendered shares mid-year. What was most interesting was the contrast between the British and US systems for acquisitions – that required learning the British system. The Panel on Takeovers and Mergers was set up in 1968 and administers the City Code on Takeovers and Mergers. It was fascinating but definitely a lot of work.

How did your approach to engagement evolve during this period as a result of your experiences with those transactions, or underline the importance of engagement?

Looking back to 1986, when I started in corporate governance, shareholder engagement has always been about clearly explaining the rationale and objectives for a transaction, position or decision.

Since 2012, what has been your approach at Mondelez to shareholder engagement during ‘regular’ years without such major transactions?

Are there such things as regular years?! At both Cigna and Mondelez we had regular interactions with investors explaining governance, compensation [and] strategy. That helped build deeper understanding and relationships, providing context for meaningful conversations.

If you engage regularly, investors will tell you things about what they like, what they would like to see more of and what they didn’t understand about what you did or said. It gives you the opportunity to address that immediately and think about how to do it better next time. It’s a more comfortable and effective cadence than waiting until there’s a problem.

You previously spent many years at Cigna, including as corporate secretary and later also as chief compliance officer. What were some of the key challenges you faced during your tenure?

I started in that governance role in 1986 [and] left Cigna in 2006. Those 20 years were transformative in terms of governance. The board-management working relationship and relationships with investors changed tremendously. The impetus for this change came from companies themselves, investors, activists, NGOs and regulators.

How did you manage to combine the corporate secretary and compliance roles?

Cigna was a heavily regulated company. At the time it had property and casualty insurance, healthcare and workers’ compensation, group life insurance and other lines. And it did business internationally. The key wasn’t for me to do all the work – the key was to help other people involved in the compliance program to understand what ‘good compliance’ looked like and what was expected of them so that they could do it.

Everybody I worked with on compliance at Cigna was committed and knowledgeable. We also created opportunities to incorporate compliance into Cigna’s financial development program for financial leadership trainees. We ensured they were exposed to the importance of compliance.

What have you learned about making governance and legal teams at companies function effectively and efficiently?

I think diversity of thought and diversity of experience are so important. My strongest teams have been my most diverse teams: they came up with the best ideas and did the best work. They were also the teams that liked to learn and grow, which meant they could – and did – continue to do better and better work.

You’ve been involved in mentoring financial professionals and members of the corporate and legal affairs departments, and coaching law students during their summer internships. Why do you think that type of work is important as a corporate secretary?

I think corporate governance is important. If I can expose professionals to corporate governance early in their careers, they can bring it with them wherever they go. At Cigna, I worked with [the company’s] financial development program. Several years after my first program intern rotated out of my shop he told me that, although he was now doing something totally different, every day he was using something he had learned in that corporate secretary’s office rotation, including how to use lawyers effectively.

Because he understood the corporation’s workings, how to work effectively with lawyers and various financial professionals, salespeople and regulators, he was well grounded and better prepared to contribute. I’ve tried to share similarly with the other trainees and mentees I’ve had.

What advice would you have for someone making the switch to working in governance, both earlier and later in their career?

I think membership of and involvement with the Society for Corporate Governance are critical. The corporate secretarial profession is one of the most supportive professions around. People are eager to help those early in their career. If you have a crisis, they will help you. They’ll talk about similar situations they have faced. They will share technical knowledge, technological knowledge and social knowledge – how to survive and succeed in the corporate world. Definitely, society membership and involvement is the best advice I can give to that someone.


This article originally appeared in the latest Corporate Secretary special report.

Ben Maiden

Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...