Just doing his job

Reuven Adler wouldn't talk with the press this week. The headlines he got in the business press were not his wish, and after all, there was nothing particularly noteworthy about what he did. All he did was his job.

Adler (not the public-relations personality of the same name, who doesn't exactly shun the spotlight ) is an external director at Phoenix. He also serves as the external representative, on behalf of the public, on the insurance company's investment committee. The committee's job is to examine the way clients' money is invested, the clients being people with executive insurance policies (bituach minahalim ) and pension funds.

Aside from Adler, on that investment committee sit another representative of the public, Ziv Gil, and director Zeev Milbauer. And last week the committee decided not to invest in real estate firm El-Ad Canada.

El-Ad Canada is a privately owned company that belongs to Yitzhak Tshuva, who also owns the controlling stake in Phoenix. (El-Ad Canada is progressing towards an initial public offering on the Tel Aviv Stock Exchange. )

In other words, Phoenix's investment committee elected against taking part in the public offering of another company with the same owner.

Tshuva has not taken the flotation of El-Ad Canada lightly. He has personally contacted top people among Israel's institutional investors, urging them to participate in the offering.

The function of a director, especially an external one, is to supervise the company's conduct. The idea behind the appointment of external directors is to have someone on the board who is completely independent; someone who has no financial or other dependence on the company or its owners.

But the business scene is not utopia. External directors are appointed by the company itself, with the knowledge of the controlling shareholders. Three years ago, another external director at another financial company learned the hard way that you don't want to buck the owner. Amir Barnea, professor and external director at Bank Hapoalim, found himself facing a series of courteous suggestions that he step down. The suggestions came from associates of the bank's controlling shareholder, Shari Arison, and the reason was that he had been asking hard questions about decisions made by the board, at the behest of Arison.

Over at Phoenix, the directors had to prove last week they had a spine, and they did.

Phoenix wasn't alone. The people there weren't the only ones concerned about El-Ad Canada's suggested share price at its IPO. The fact is, El-Ad Canada's flotation limped.

It would be wonderful if Adler's resistance had been an unremarkable affair, a footnote not worthy of mention. But in the Israeli capital market, when somebody just does his job properly, he's worthy of applause.

External directors are not richly rewarded. They usually get a few thousand shekels per board meeting. The prestige is the main reason to take the job. It can be said that Reuven Adler's prestige shot up last week, if only because of the rarity of a person simply doing his job properly.

	Reuven Adler
	Photo by: Archive photo by Uzi Keren