For the first time ever, board directors at Putnam
decided to use a search firm to nominate two for board seats. The two nominees join Putnam Chief Executive Officer
Charles Haldeman, Jr.
on the ballot.
Nominees Myra Drucker
and Richard Worley
were among 40 initial candidates that search firm Heidrick & Struggles came up with, said Putnam funds' director John Hill
W. Nicholas Thorndike retired from the board in June.
Directors made the decision to hire a search firm because of a few factors. Among them was a desire to "cast a wider net this time," said Hill. Putnam directors also talked with Fidelity's
board about their decision to use a search firm, said Hill.
A Fidelity spokesperson did not return a call seeking comment.
Another consideration was that Putnam's directors have never had to nominate two seats at once, said Hill. And in the past, Putnam directors have generally relied on contacts within the board and other means, added Hill.
The governance search demand in the past 12 to 18 months have been "very heavy," said Joe McCabe, a senior partner at Heidrick & Struggles. McCabe has worked within the search firm's governance practice for seven years.
McCabe speculates that the demand is being driven by both pent up demand from last year and a desire to replace "marginal performers." There is also a fiduciary aspect to bringing in an unbiased search firm, said Hill. "I think it creates more of an arm's length transaction," he added.
Putnam's election for its closed-end funds board will take place in late September, and its open-end funds board election will take place in late October, said Hill.
If the nominees are elected, Putnam's funds board will have fourteen directors -- 11 independent directors and three interested directors. The new directors, if elected, will show up
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