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Robert Ag Monks, who passed away at the age of 91, was the inspirational founding father of American shareholder activism, skilled lawyers, prolific writers and successful businessmen. Along with his longtime business partner and co-author Nell Minow, he helped take off the corporate governance movement in the 1980s.
The monk is a Republican and ran three times in the US Senate. He liked to remind people that it was when he was running for office that he came to understand the important importance of institutional shareholders in democracy. As a result of heavy pollution in the river near my home in Maine, he realized that businesses had overwhelmingly determined the quality of the air we breathed and the quality of the water we drank. However, they were not adequately accountable to the owner.
This encouraged the monks to be initiators of what we know as an environmental, social and governance agenda. He was essentially the view of capitalist stakeholders. He argued that unlimited hunts for profits are causing a blow to society. Institutional shareholders must require management to move beyond short-term profit maximization and act in a socially and environmentally responsible way to ensure sustainable value for the future.
Such “Wokelly” infuriates Republican leaders today. The monk has always declared himself a Nelson Rockefeller-style Republican who is proud of himself. O Theme, O Mores, many will sigh.
Robert Augustus Gardner Monks was born in Boston in 1933, the son of an Anglican priest. He was blessed with wealthy ancestors, educated at Harvard and Cambridge, and in 1955 he rowed at boat races in Oxford and Cambridge. Cambridge won.
After his period as a partner at a Boston law firm, he went into business. Making money came easily for him – when he sold the Boston Company, the fund management group he chaired. He was then invited by President Ronald Reagan to serve the Department of Labor and took over the entire US pension system.
The background of law, business and government helps explain why, Minow suggests that the monks first saw that the rise of institutional investors in trustees could activate the foundations of capitalism. With extensive stock ownership through the pension scheme, investment has brought social and political interests. He believed that capitalism without a responsible owner would fail. Therefore, his decision to find the institution’s shareholder services in 1985 encouraged the institution’s vote to hold management accountable. Currently, it is a major proxy company and its “awakening” recommendations to its clients are being attacked.
The monks also established the Lens Investment Fund as an activist tool. His wealth was an undeniable asset here. He spent thousands on lawsuits, representation issues and board campaigns in filing dozens of shareholder proposals. Another impressive example of his financial firepower was the campaign to win seating on the boards of Sears Lowback, which became a conglomerate. He claimed that Sears spent millions of people moving him away from the board. His retaliation was well-known for a full-page Wall Street Journal ad that accused the committee of being “bad assets.”
The monk continued to advise the institution’s shareholders through his last important venture, ValueEdge Advisor. By this time he had an obligation to recognize that his vision was overturning corporate power. Wall Street, Business Roundtables and other lobby groups have long held financial advocates on Capitol Hill. The grip was immensely strengthened by the Supreme Court decision in 2010, removing restrictions on political spending on businesses and creating a critical tilt from shareholders towards the board.
Later in the year the monk spoke about American dreams and the capture of the Twilight corporate governance company. However, his campaign was not in vain. The number of companies that have decided to split the roles of chairman and chief executive officers has been steadily rising since 2000. Shareholder activism is currently a central feature of capital markets. And many of his campaigns against the CEO of the Empire have managed to improve governance practices.
Minou told me this week: “When I met him, he said, ‘I want to wake up a sleeping giant’ and with some set-offs and things to do, I created four companies, countless articles and a few books. ” I and others feel privileged to know this charismatic foresight.
