"Leadership in Corporate Governance at International Paper"

Maura Abeln Smith
Senior Vice President, General Counsel and Corporate Secretary
International Paper

Maura Smith began her presentation by explaining that International Paper was at a turning point. Over the past ten years, use of paper has decreased dramatically thanks to electronic communication. Her company knew that it had to do something.

In July 2005, International Paper announced their transformation plan. Its goals were to significantly improve profitability, strengthen the balance sheet and return value to shareholders, all while maintaining its moral compass. It was not going to be easy.

"This is leadership in turbulent times," Smith said.

International Paper had not been making much profit. Part of the reason for this is that the company does many things that reflect its morals and values, but don't necessarily translate to the bottom line.

To illustrate this, Smith explained that her company owns roughly 6.5 million acres of forest around the world. As part of its transformation plan, International Paper is selling most of that. It expects to receive around $6 billion for the land and retain about 300,000 acres. When the company was deciding who to sell this land to, it did not simply sell to the highest bidder. It will only sell to buyers that follow the principles of sustainable forestry. This translates to the land continuing to be treated well but not necessarily as much profit to International Paper.

Expanding on the company's values, Smith said that International Paper's vision is to be one of the best and most respected companies in the world as measured by its employees, customers, communities and shareholders. It believes in integrity, honesty, responsibility, accountability, protecting the health and safety of employees, and protecting wildlife in environmental, economic and social sustainability.

Smith reiterated how International Paper lives by these principles by not only selling its land to buyers that subscribe to the principles of sustainable forestry, but by selling or giving any critical, environmentally sensitive land that it currently owns to conservation groups.

Additionally, through the International Paper Foundation, about $5 million a year is given away to organizations that pursue improvements in the community. The Foundation "is a very important aspect of who we are, especially in the communities where we live," Smith said.

Coins 4 Kids is a program through the company that raises money to feed children in Kenya. Employees at International Paper raised $1 million and the Foundation matched that figure, allowing about 75,000 children a year to be fed in that country.

Smith explained that International Paper operates differently from many other companies because they care about their employees and the world. At many companies, investors have lost confidence, employees have lost pensions and stock, including International Paper's, has decreased.

Smith's company wants its employees, the community, and the world to have faith in it and its product. In the end, it all comes back to leadership. At International Paper, leaders follow five principles: create a vision and definition of success, establish financial rewards for adherence to core values and performance, encourage mutual respect and inclusion, adhere to principles of good governance and play fairly to win.

Following these leadership principles is helping International Paper to transform itself. With these principles and its morals and values to guide it, International Paper is changing itself and the way that it does business.

Maura Abeln Smith, Senior Vice President, General Counsel and Corporate Secretary at International Paper discussed the challenges that her company has faced, how it is overcoming them and the morals and principles the company subscribes to in order to achieve this goal.

Smith joined International Paper in 2003. She has overall responsibility for International Paper's legal and public affairs organization, in addition to providing legal counsel to the corporation and its board.

Prior to joining International Paper, Smith was Senior Vice President, Chief Restructuring Officer, General Counsel and Secretary of Owens Corning in Toledo, Ohio. She was also a member of the Owens Corning Board of Directors. Prior to joining Owens Corning in 1998, Smith had been Vice President and General Counsel of GE Plastics in Pittsfield, Mass., which she joined in 1991. She was also formerly a partner in the law firm of Baker & McKenzie.

Smith is a 1977 Phi Beta Kappa graduate of Vassar College. She received her Master of Philosophy degree in economics from Oxford University in 1979, where she was a Rhodes Scholar, and her J.D. from the University of Miami School of Law in 1982, which she attended as a John M. Olin Fellow in Law & Economics.