Bob Monks feels honored that the Robert A.G. Monks Professorship of Corporate Governance chair at Cambridge University has been endowed by L. Dennis Kozlowski, chairman and CEO of Tyco International Ltd., a company that is accused of having a few corporate governance problems of its own. Mr. Monks doesn't see any contradiction, despite recent reports about some of Tyco's accounting, disclosure and compensation practices.
Mr. Kozlowski donated $4 million to name and fund in perpetuity the academic chair at the Judge Institute of Management, the university's business school, after Mr. Monks.
"I'm buying the stock," said Mr. Monks, chairman of Lens Investment Management LLC and a long-time corporate governance activist. Tyco's stock has fallen about 55% since the beginning of the year.
"Dennis is absolutely accountable," Mr. Monks said, defending Tyco's corporate governance practices. "I think he's behaved in a very becoming way.
"Tyco has subjected itself to a governance regime that is far more shareholder-friendly than that of the U.S.," he said. The Bermuda-incorporated company operates under U.K. law.
Mr. Monks conceded Mr. Kozlowski has made some mistakes in terms of governance. For instance, Tyco paid a director, Frank E. Walsh Jr., $10 million for his role in the company's acquisition of CIT Group Inc. "Clearly it was a mistake" to pay him, Mr. Monks said, explaining he has no objection to paying a fee to people who are crucial in completing transactions, although not to directors.
Mr. Monks wondered if short-sellers are to blame for the controversies surrounding Tyco. "Are the Tyco questions part of a classic bear raid? Are people who are short Tyco trying to create an atmosphere so they can get out of their short positions?"
Mr. Kozlowski "has contributed a lot of value" to Tyco shareholders, Mr. Monks said.
Mr. Monks said when he was a director of Tyco, he helped appoint Mr. Kozlowski chairman and chief executive. Mr. Monks resigned as a director in 1995 after 10 years on the board "because 10 years is long enough."
Mr. Kozlowski couldn't be reached for comment.
Simon Deakin has been appointed as the inaugural holder of the professorship. Mr. Deakin, an expert in corporate governance, was a professor in the university's law faculty.