Marsh & McLennan has adopted a series of amendments aimed solely at its directors in an effort to improve the company’s governance practices. The insurance and benefits giant said directors must acquire at least $100,000 of Marsh stock within three years of joining the board. Senior executives also must attain specified levels of equity ownership, based on a multiple of annual salary, over a five-year period.
The company also said that directors should not serve on more than four additional public company boards. In addition, Marsh said that it will require a director elected by the board to stand for re-election at the next annual meeting of stockholders. Finally, it will require a director who has a significant change in employment, or personal circumstances, to resign from the board.
“The board of directors continually looks for ways to improve MMC’s approach to corporate governance,” said chairman Stephen Hardis, in a statement. In early 2005, Marsh & McLennan agreed to pay $850 million to settle charges of fraud and anti-competitive practices stemming from an investigation by New York State Attorney General Eliot Spitzer into bid-rigging in the insurance industry. Under the agreement, Marsh also agreed to establish a compliance committee of its board of directors and appointed a chief compliance officer.