| AutoZone hailed for ethics in operation Economic Club taps company for efforts in corporate governance By David Flaum Focusing on corporate governance before such efforts were hip helped AutoZone Inc. garner the first Walter P. Armstrong Jr. Award for Leadership in Corporate Ethics. Leaders of the Memphis-based auto parts firm will accept the award on Wednesday at The Economic Club of Memphis's annual dinner. The event, held at the Holiday Inn at the "This is an honor I share with our outstanding management team and the 50,000 AutoZoners across the country who do the right thing every day," said Steve Odland, chairman, president and chief executive officer. Armstrong Allen law firm and The Economics Club put the program together last year to honor Armstrong, who was a partner in the law firm and founding member of the club. Along with the award, AutoZone gets $10,000 to donate to a college of its choice. The company has not decided on a college, said AutoZone spokesman Ray Pohlman. AutoZone was among about 150 companies the selection committee considered, said Jerome Broadhurst, partner with Armstrong Allen and selection committee member. The group combed over structure and makeup of the board of directors and Securities and Exchange Commission documents to check on company corporate governance moves. Committee members decided to concentrate on corporate governance this year because it is a hot issue, Broadhurst said. "Ethics encompasses governance," he said, adding that AutoZone "didn't just do the minimum required." Rankings compiled by Institutional Shareholder Services put the company over the top, Broadhurst said. One key to AutoZone's selection was company efforts to meet good corporate governance practices before they were required, said David Kemme, professor of economics and holder of the Morris Chair of Excellence at the Fogelman College of Business and Economics at University of Memphis. John Lawrence, an analyst who follows AutoZone for Morgan Keegan & Co., said the company has made a practice of making good corporate governance a priority. "They led the charge in that effort long before it was popular,"
AutoZone added Charles Elson, professor of economics at The ISS puts AutoZone in the top 1 percent of the 5,000 AutoZone listed some of the factors that contributed to the rating in a presentation in October at the RBC Capital Markets consumer conference. They included: A separate board committee for governance issues Committees composed only of independent outside directors The full board elected each year Directors with more than one year service own stock and are paid all or in part with stock No poison pill to sidestep possible takeover efforts Shareholder approval of stock plans and by majority vote, not supermajority, of charter and bylaw amendments "It certainly builds a framework that things you see in other
places can't happen (at AutoZone) as easily," -- David Flaum: 529-2330 AUTOZONE Inc. Top person: Steve Odland, chairman, president and chief executive officer Address: 2004 profit: $566.2 million. Phone: 495-6500 Web site: autozone.com Copyright 2005, commercialappeal.com - |