Institutional Shareholder Services says Qwest outperforms 94.2 percent of the companies in the Standard & Poor's 500 and 100 percent of the companies in the Telecommunication Services group in its ratings, called the "corporate-governance quotient." It's a markedly different evaluation from that of early 2004, when Institutional Shareholder Services, known widely as ISS, rated Qwest ahead of just 8.5 percent of S&P 500 companies. "The ISS rating confirms the very positive steps our board has taken in recent years to constantly improve corporate governance," said Rich Baer, Qwest's general counsel. Qwest has "declassified" its board, meaning that all directors will be up for a shareholder vote this spring. A shareholder proposal suggested the change in 2003, and management backed it. A change to Qwest's articles of incorporation passed in 2004, and the declassification began in 2005. ...Qwest previously used the same election rules as most companies. Shareholders could either cast votes "for" a director, or "withhold" them. As long as the director got a single vote, the number of shares withheld was irrelevant, and the director returned to the board. ISS also noted that Qwest's board is controlled by a supermajority of independent outsiders. CEO Dick Notebaert is the only Qwest executive who's a director, and founder and former significant shareholder Phil Anschutz and two of his employees have left the board. Qwest is not perfect. ISS objects when a company has not separated the jobs of CEO and chairman, and Notebaert holds both positions. The company has appointed a lead independent director, former Dow Chemical CEO Frank Popoff. He leads regular board sessions at which Notebaert, as a member of management, is excluded. "The only way a company can improve its score is by improving its corporate-governance practices," she said. "The majority of our CGQ tool is free. ISS Corporate Services, a wholly owned subsidiary of ISS, sells Web-based tools and offers a premium tool to perform peer analysis and benchmarking." Qwest's Baer said the company has not paid ISS for the CGQ services. http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5358428,00.html
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