Blind Trusts Help Strengthen Corporate Governance and Avoid Conflicts of Interest says Wilmington Trust Executive Ed Ianni.Business Editors WILMINGTON, Del.--(BUSINESS WIRE)--Jan. 9, 2003 Blind trusts are emerging as a new tool for the private sector as boards and business executives adjust to the new investment environment and calls for improved corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. practices. Blind trusts have been commonly used by government officials to eliminate conflicts of interest. Now, they are increasingly being employed by corporate executives to help diversify their portfolios and respond to demands for strengthened corporate governance practices. "With the increase we're seeing in the non-cash components of executive compensation, including stock options, today's executives face tough challenges in keeping their portfolios balanced. Moreover, increased scrutiny by the investment and regulatory communities has led many executives to choose blind trusts, as they seek to demonstrate their commitment to good corporate governance practices," said Edmond M. Ianni, Vice President of Private Client Advisory Services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal at Wilmington Trust Wilmington Trust (NYSE: WL) was founded on July 8, 1903) as a banking, trust, and safe deposit company by DuPont president T. Coleman du Pont. He opened the business in the dining room and parlor of a former private residence at 915 Market Street in Wilmington, Delaware with a , in comments delivered today at the 37th Annual Philip E. Heckerling Institute on Estate Planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the , in Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. . Under a blind trust, an independent trustee is given the responsibility to implement the business executive's plan, without the executive's participation, for the executive's stock holdings. By placing the responsibility for implementation of the plan in the hands of the independent trustee, blind trusts can eliminate the potential conflicts between the interests of the executive, the company and the shareholder, while also addressing the executive's need to diversify. Blind trusts can provide executives and shareholders with clear benefits. Typically, corporate insiders are effectively limited by securities laws to selling their company stock only a few times a year. However, the trustee can trade the stock, or otherwise manage the portfolio pursuant to the plan at any time. This enables executives to more easily diversify, sell or otherwise manage their portfolio and capture and preserve its value. Additionally, executives can diversify their portfolios gradually, rather than selling large amounts of stock at one time, which can impact the share price. In turn, shareholders may see fewer share price shocks and are better assured that executive conflicts are avoided. "We at Wilmington Trust have studied the financial benefit of blind trusts and have found that, during the past two years, portfolios managed in blind trusts performed considerably better than what business executives would have themselves obtained from sales of their holdings during open window periods," Mr. Ianni noted. "Additionally, when the blind trusts are established in Delaware, executives may be able to take advantage of the state's tax, financial, and other estate planning benefits, including state income tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various , asset protection and an 'open architecture' investment management approach to suit their needs." Wilmington Trust has been a pioneer in the Delaware trust and estate community for nearly 100 years and a leader in blind trusts. Mr. Ianni and his team have managed extensive assets in blind trusts over several years. Mr. Ianni, a graduate of Princeton University Princeton University, at Princeton, N.J.; coeducational; chartered 1746, opened 1747, rechartered 1748, called the College of New Jersey until 1896. Schools and Research Facilities , Oxford University in England, and the University of Virginia School of Law The University of Virginia School of Law was founded in Charlottesville in 1819 by Thomas Jefferson as one of the original subjects taught at his "academical village," the University of Virginia. , is past Chairman of the Corporate Counsel Section of the Delaware State Bar Association (DSBA DSBA Delaware State Bar Association (Wilmington, DE, USA) ), is also past Chairman of the International Law Section of the DSBA, and is a member of its Estates and Trusts and Taxation Sections. He is also a member of the Wilmington Tax Group and the Estate Planning Council of Delaware. He is a Vice President of Private Client Advisory Services at Wilmington Trust Company, where he develops and manages strategic alliances and customized wealth management and trust services for individuals and families in the United States and abroad. A leader in his field, he frequently lectures on fiduciary governance and investment management. The Heckerling Institute brings together approximately 2600 of the nation's leading experts to discuss the latest developments in trust and estate planning. The University of Miami This article is about the university in Coral Gables, Florida. For the university in Oxford, Ohio, see Miami University. The University of Miami (also known as Miami of Florida,[2] UM,[3] or just The U School of Law's Heckerling Institute is widely recognized as the nation's leading program on estate planning. The conference takes place from January 06 - 10, 2003. About Wilmington Trust Wilmington Trust Corporation (NYSE NYSE See: New York Stock Exchange :WL) is a financial services holding company that provides wealth management, specialty corporate trust, and commercial banking services to customers throughout the United States and in more than 50 other countries online and from offices in California, Delaware, Florida, Georgia, Maryland, Nevada, New Jersey, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Pennsylvania, Tennessee, London, the Cayman Islands, the Channel Islands, Dublin, and Milan, and is authorized to conduct business in Luxembourg and the Netherlands. Its wholly owned bank subsidiary, Wilmington Trust Company, was founded in 1903 and today is the 15th largest personal trust provider in the United States. As of September 30, 2002, combined assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. at Wilmington Trust and its affiliates, Balentine & Company, Cramer Rosenthal McGlynn and Roxbury Capital Management, were $29.1 billion. For more information about Wilmington Trust, visit www.wilmingtontrust.com. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion