Allow The Public To Directly Contact Board Members? Not At Enterprise!

[FailingEnterpriseAdmin]

Companies Let Anyone E-Mail
The Board, But Few Write In
By MARCELO PRINCE
THE WALL STREET JOURNAL ONLINE
March 24, 2005 6:44 p.m.

Samuel Armacost has gotten used to finding his computer's inbox stuffed with mortgage offers and junk mail. It's a fact of life for board members these days.

Mr. Armacost is a director at Del Monte Foods Inc., which lists e-mail addresses on its Web site that let anyone contact him and other board members. "Unfortunately, 95% of the messages sent through that Web site tend to be spam," says Mr. Armacost. He gets only a handful of legitimate e-mails a month and those are usually questions about Del Monte's products. Nonetheless, he says, "it's important that shareholders have direct access to a director on almost any subject."

Due to new regulations and improved governance practices, it has never been easier to reach the power brokers in America's boardrooms. An increasing number of companies are publishing e-mail addresses that let customers, employees or investors directly contact board members. Most boards provide a single address for tips about suspected financial fraud, while others give addresses for various directors and where people can write about any topic from executive compensation to environmental policies.

While these addresses are welcomed by governance experts, surprisingly few people are using them. Directors and executives say most of the correspondence they receive is junk or mail that should be sent elsewhere in the corporation. Adding to the confusion: there is no accepted standard for how these addresses should be publicized or how the correspondence should he handled. At some companies, the messages go straight to directors, but other firms have them vetted by the corporate secretary, general counsel or an ethics officer.

Mr. Armacost's experience is typical. In addition to Del Monte, the former bank executive also serves on the boards of ChevronTexaco Corp. and Callaway Golf Co. Each company has a different policy and method for managing e-mails for board members.

Del Monte's three board committee chairs can be written to directly from addresses posted on the corporate governance section of the company's Web site. At Callaway, as at many companies, messages sent to a contact address on its Web site are reviewed by the corporate secretary, who forwards them on as appropriate. Chevron, meanwhile, is one of the companies that still doesn't list an e-mail address for its board.

"I think it is a necessary tool and [will be more effective] as the public becomes more familiar with the kinds of things the law and the system is set up to allow them to address," says James Potter, Del Monte's general counsel and secretary.

Most companies began to provide board e-mail addresses after the Sarbanes-Oxley Act of 2002. The law requires the audit committees of all public companies to establish confidential systems for receiving employee complaints regarding accounting or auditing matters. The New York Stock Exchange also requires that listed companies provide the public with a method to contact nonmanagement directors. But there is no public e-mail requirement.

Philip Laskawy, who chairs the audit committee at insurance company Progressive Corp., says messages sent to addresses on the company's Web site for him and the board chairman are not filtered. Yet, he only receives one or two legitimate messages a month, and most of those are customers complaining about an insurance claim, which he forwards to the company. "We get very few … and almost all are unrelated to the purpose," he says.

Although Mr. Laskawy says it is important for companies to have a simple way for employees and outsiders to reach the audit committee, he doesn't think it is necessary to provide an e-mail address. He also serves on the boards of General Motors Corp. and Loews Corp., which do not list e-mail addresses for their directors on their Web sites.

Some companies, like Pfizer Inc. and Sirius Satellite Radio Inc., which prominently display their board e-mail addresses online, report receiving lots of correspondence. But much of what they get is junk or not appropriate for the board, company officials say.

"The board gets thousands of e-mails a month but a large percentage of them are spam, ads, resumes, requests for funding, students writing research reports, etc.," Peggy Foran, Pfizer's corporate secretary, says in an e-mail. Still, she says the e-mails serve as an "early warning system" of potential problems.

The amount of time that companies and directors must spend fielding such messages is one of the reasons that some, like Intel Corp., do not provide or widely publicize their board e-mail addresses. "We are trying to keep [board members] focused on the big picture and corporate strategy," says Cary Klafter, Intel's corporate secretary.

The semiconductor firm lists an e-mail address for its board in the annual proxy form mailed to investors, but does not list the address on its Web site. The only other way to find it is to sift through Intel's regulatory filings. Mr. Klafter says e-mails addressed to directors but received at other Intel inboxes are forwarded to the board.

To comply with Sarbanes-Oxley, Intel and many U.S. companies have set up toll-free hotlines or confidential Web sites that employees can use to file complaints -- such as the anonymous tip that forced the ouster of former Boeing Co. Chief Executive Harry Stonecipher earlier this month. Companies have also hired outside firms like EthicsPoint Inc. to staff the phones or manage the correspondence.

While having an open dialogue is important, managing these e-mail inboxes "can be nightmarish" when companies have a crisis or event that triggers a flood of messages to the board, says David Childers, chief executive of EthicsPoint, of Portland, Ore.

Some companies have gone well beyond the Sarbanes-Oxley requirements. For example, the Web site of ExxonMobil Corp. has an online form that lets anyone send a message to any board member or committee. Although the messages are often handled by the oil giant's corporate secretary's office, the staff cannot erase or block these messages from reaching directors.

In response to a message sent via the site, Exxon director Walter Shipley says he has received 219 e-mails in the past year, only 12 of which were appropriately sent to him or the board. Still, he says the e-mail system is "more convenient than regular mail" because messages can be forwarded quickly and a "paper trial" is generated electronically.

Shareholder activists and governance experts welcome these e-mail addresses and encourage more companies to adopt them. They say it is important for the board to get direct feedback from employees and customers and for small shareholders to have quick, easy access to directors.

"It's a very good step, despite the risk they will get overwhelmed with a lot of junk," says Nell Minow, editor and chairman of the Corporate Library, a research group in Portland, Maine, that monitors corporate governance. "Even though in theory the directors work for the shareholders it's easy for them to forget that."

Write to Marcelo Prince at marcelo.prince@dowjones.com

[the dazzle]

did you miss the class on private and public companies? ... no offense

[FailingEnterpriseAdmin]

Originally Posted by the dazzle

did you miss the class on private and public companies? ... no offense

Yeah, you make a good point. In any corporation, the Board of Directors are supposed to represent the interests of the shareholders. If the company is privately held, they don't really have a responsibility to be responsive to anybody other than the private owners.

Maybe I just got caught up in the frustration of getting these e-mails from people who spend 20 minutes on enterprise.com and can't find how to contact the corporate headquarters.

Good catch.

Admin

[ExLossControl]

Sarbanes-Oxley or (SOX as the lingo goes) only applies to publicly traded companies- if anything, it's a deterrent to privately held companies to go public because it's just one more set of compliances they have to follow.

I think SOX was the nail in the coffin for ERAC ever thinking of going public. They are pretty happy where they are, and why worry about a pesky little thing like governmental compliance when they can make a pile of cash otherwise?

As I've said in previous posts, ERAC is very insular, very intentionally. They don't answer to anyone but themselves...and the answer is always found on the bottom line.

[BoughtIn]

Admin

Do the top 5 publically traded companies on the Fortune 500 list post their board e-mail/contact info? Let's find out:

1) Wal-Mart - No
2) Exxon Mobil - No
3) GM - No
4) Ford Motor Company - No
5) General Electric - No

I guess these companies don't care about customer service either. Incidentally, have you tried sending an e-mail about a specific problem to our customer service e-mail address on the Enterprise web site?

[FailingEnterpriseAdmin]

Originally Posted by BoughtIn

Incidentally, have you tried sending an e-mail about a specific problem to our customer service e-mail address on the Enterprise web site?

What "customer service address on the Enterprise web site"? There's a web form, but no telephone number, mailing address, fax number, nor e-mail address. Check out our newly updated page on "Enterprise Rent-A-Car Customer Service".

Admin

[BoughtIn]

Originally Posted by FailingEnterpriseAdmin

What "customer service address on the Enterprise web site"? There's a web form, but no telephone number, mailing address, fax number, nor e-mail address. Check out our newly updated page on "Enterprise Rent-A-Car Customer Service".

Admin

Admin, yes I am talking about the customer service web form on the website. Every morning I see the Regional VP's secretary going through complaints and distributing them to the regional and area managers. They are expected to call on every single one and report back to the RVP with what steps they took to resolve the problem. This isn't a rumor. I've seen it first hand. Have you ever tried to go this route?

[FailingEnterpriseAdmin]

Originally Posted by BoughtIn

Admin, yes I am talking about the customer service web form on the website. Every morning I see the Regional VP's secretary going through complaints and distributing them to the regional and area managers. They are expected to call on every single one and report back to the RVP with what steps they took to resolve the problem. This isn't a rumor. I've seen it first hand. Have you ever tried to go this route?

Thank you for the informative post. I always appreciate good writing, hard facts, and clear thinking here on the discussion board.

I'm impressed that they take these steps with the complaints. But there are still two issues:


1. If they really do take complaints seriously, why refuse to listen to your customers through the telephone, fax, land mail, or e-mail? If a blind web form is all you offer, I'd say you're afraid of hearing from your customers and want to make it hard for them to do so.

And what if you're actually driving in an Enterprise rental car and you've got your cell phone? You'd have to stop, get out of the car, go find an Internet connection somewhere, fill out a web form and then wait a day for a response?

For a counter example, I went through a fast food drive-through a couple of weeks ago and on the window, right where every driver could see it, and in big bold letters, was a sign from corporate headquarters, with their toll-free number, saying something equivalent to "If something wasn't right, we want to hear about it". Now there's a company who's not afraid of their customers.

Yes, Enterprise provides a blind web form. Would the net effect be any different if the policy was "Sure, let's technically provide a way for customers to reach customer service, but let's make it as hard as possible"?

You have 700,000 cars in your fleet. There's absolutely no good reason why you don't have a 24-hour toll-free number providing customer service to those 700,000 drivers.

Have a look at the page in which Enterprise boasts of their "Culture of Customer Service". Have you noticed that on this page there's not a single way to actually contact Customer Service? Someday, Harvard Business School will teach a case study about insular, arrogant companies that just don't get it, and a printout of this page will be part of the syllabus.


2. And yes, I did actually fill out a web form and submit it. This, of course, was after a dozen failed attempts to get things resolved with the local managers and calling the local regional office. On the web form I told them I'd created www.FailingEnterprise.com. A couple of Vice Presidents came out to meet with me. They sympathized, empathized, apologized, and then when I asked them what they were going to do to actually fix the specific problems, on each one they either outright refused or they clammed up. As they left, they said "Well, we know what we need to work on". It's been 16 months, and I still haven't heard back from them.

That sounds more like "Customer Service Avoidance" than "Customer Service" to me.

In conclusion, it seems to me that Enterprise hides from their customers to the greatest degree possible while providing the absolute bare minimum method of contacting Customer Service, and then when they do actually listen to the customer, the strategy seems to be "Let's let him vent, and then maybe he'll go away and we won't actually have to change anything".

And that, ladies and gentlemen, is how you earn a web site like www.FailingEnterprise.com.

SOX compliance does deal with publicly traded companies. However, if a privately held organization does business with ANY publicly traded company....they can be investigated and held accountable as well. Something to think about. Take care

It is no different in other corporate structures.