Edward M. Mazze, distinguished university professor of business administration at the University of Rhode Island and a former dean of URI’s College of Business Administration, recently stepped down from the board at publicly traded Westerly-based Washington Trust Bancorp., the parent of The Washington Trust Co., where he had been on the board of directors since 2000. He answered five questions about that experience and corporate board membership.
PBN: What was your experience like as a director of Washington Trust Bancorp, particularly during the turmoil in the financial markets and the credit crunch of 2008 and 2009?
MAZZE: I was elected to the board in 2000 and reached the mandatory retirement age in April. I served as a director during two recessions. I am proud that Washington Trust performed better than most other financial institutions in tough economic times. This was due to its strong executive management team, outstanding employees, loyal customer base and strong shareholder support. The bank has been committed for over 200 years to providing excellent customer service at its branches and through its wealth management services. It was a great experience serving with a talented group of directors.
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PBN: I think people have an image of corporate board members doing little work but collecting substantial compensation. How much effort was required as a board member at Washington Trust? How often were you doing bank business?
MAZZE: Since 2000, I have traveled over 250 times from [North Kingstown] to Westerly (the bank’s corporate headquarters) to attend board meetings, and meetings of the audit committee, the compensation and human resources committee, annual meetings, and strategic planning meetings. To prepare for each meeting, you have to read a lot of materials [and in order] to be an effective board member, you need to spend the necessary time so that you add value to board and committee meetings.
PBN: What other corporate boards are you serving on, or will be serving on?
MAZZE: I have served on the board of Pulse Electronics Inc. (NYSE) since 1985. Currently, I am the chair of the governance committee. I have also served as a member of the audit committee and the executive compensation committee. Previously, I served on the board of the Barrett Growth Fund (a mutual fund) and served as chair of the fund’s audit committee. In May, I was elected to the board of Home Loan Investment Bank, a federal savings bank [based in Warwick].
PBN: Home Loan Investment Bank is quite different from Washington Trust. It’s a privately held, family-owned lender that has had its share of problems in the economic downtown. How do you turn the company around as a board member?
MAZZE::Home Loan Investment Bank has been in business over 50 years assisting its customers with their day to day financial problems. I joined the board because I am impressed with the bank’s executive leadership and vision. I have met the senior management team, which is committed and has the experience to grow the bank’s footprint in this market area. As a board member, I will work with executive management and other board members to help the bank reach its objectives such as strengthening and growing its assets. I also hope to use my current and past board experience in assisting management improve the Bank’s performance.
PBN: Last year, Brown University President Ruth Simmons was criticized for serving on the board at Goldman Sachs and voting to approve millions in bonuses. Some questioned whether members of academia should be on a corporate board. How would you respond to that?
MAZZE: In the past, many boards were dominated by family and friends. The Sarbanes-Oxley Act created new standards for corporate governance and director independence. Directors now come from all sectors of the economy, including universities. To be an effective director, you need to spend the time to learn the business and put your reputation on the line in making tough decisions. You will participate in selecting the top management for the corporation and provide direction with respect to the corporation’s strategy and management’s conduct of the business. Many university administrators and faculty have the necessary academic and/or business experience to make these decisions. Also, they recognize that a corporation’s purposes are to create and increase wealth for its shareholders and ensure that the corporation’s major assets, customers and employees, are treated in an appropriate manner.
