An Ode to Robert Monks

The corporate governance community lost one its most significant and influential members on April 29, 2025. The passing of Robert Monks was a sad but important event that must be noted. Very few of us can claim a substantial impact on the broader communities in which we live. Even fewer can be said to have truly changed the world. Bob Monks was such a man.

His work over forty years dramatically altered the relationships between shareholders, boards and management world-over and led to greater corporate responsibility, accountability and economic success. Directors, though his efforts, achieved a much needed and much more important role in the stewardship of the institutions for which they are fiduciaries than was true for many decades. Rather than being simply “the parsley on the corporate fish” in so many public and private companies, boards assumed the oversight power and responsibilities the position was originally conceived to entail as a result of his efforts.

But how was he so influential and exactly who was he? Monks was born into a wealthy and prominent New England family. He attended St. Paul’s, Harvard, Cambridge and Harvard Law School. He practiced law briefly, but soon turned to the corporate managerial world, making him a very rich man. He chaired to Boston Company, a large asset management firm, until it was sold to Shearson in 1981 and was a respected and influential investor and corporate director. Bob was the consummate corporate insider.

However, he always felt that the most significant problem with the American corporate system was the lack of accountability of company management and boards to the business’s ultimate owners, the shareholders, leading to poor performance and stifling economic progress. Beginning in the mid-1980’s he sought to dramatically reform traditional corporate norms that created such a troubling state. His approach was quite simple. As the Washington Post noted, he “mobilized the power of shareholder blocks to redefine the rules of engagement in American capitalism.”

Monks accomplished this shift in three separate ways. He was a life-long Republican and long active in political affairs. In 1985 he was appointed by President Reagan as the Administrator of the Office of Pensions and Welfare Benefit Programs at the U.S. Department of Labor. This position gave him jurisdiction over basically the entire U.S. pension system. And there, he began to change our world.

He decreed that in order to meet their fiduciary obligations, pension fund managers needed to vote their funds’ shares in each of their equity positions. In so doing, the funds would have to vote in a thoughtful way that would lead to increased shareholder value. This was a groundbreaking mandate. If you had to cast a value-enhancing vote, then sometimes you would have to oppose incumbent management. This had rarely happened before in fund voting. But how should these funds, accounting for the majority of equity ownership in the U.S., vote? This was the second idea brought to fruition by Monks.

In order to assure informed voting by the large institutional funds, Monks established, with Nell Minow, Institutional Shareholder Services (ISS) which would advise those funds on how to vote. As many would utilize the advice given, this created a form of unified voting that gave enormous power to the participating institutions. ISS enabled the creation of voting blocks that could put huge pressure on boards and management to consider shareholder prospectives in making major decisions.

This led to major changes in board structure and composition, leading to large numbers of independent, equity-holding directors who became much more effective overseers of corporate management. The balance of power between directors and management shifted dramatically towards the independent directors.

Finally putting his theories to practice, Monks formed an investment fund, along with Minow, named LENS. They then launched the first real governance-focused proxy contest at the seriously underperforming Sears Roebuck, where he sought a board seat which the company had denied him. While ultimately his contest failed, he did well enough to set the stage for the now ubiquitous force of shareholder activism. Whether one likes activist funds or not, they have become a major force in creating more accountable and successful corporate organizations. Prior to his effort, such governance activism had been basically unthinkable.

His three separate actions to reform corporate boards completely changed our financial world —and in my view, for the better. Personally, he was a great friend and supporter, He had courage, wisdom and integrity—three qualities so rare amongst our leadership today, His impact with be felt for years to come and has resulted in economic benefit for us all. He will be greatly missed.