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November 2005 Pulse Survey Analysis:
Captive Governance

 In partnership with, Towers Watson launched its third monthly pulse survey taking a look at issues surrounding captive governance.

This analysis was written by analysts at Towers Watson.


The November 2005 survey on corporate governance elicited 32 responses. Only 28.1% say Sarbanes-Oxley pertains to their captives; 71.9% say Sarbanes-Oxley does not. Though we did not solicit feedback as to what type of captives the respondents represented, we know most captives of publicly-traded companies are subject to Sarbanes-Oxley at some level, and 70% of all captives are single-parent captives. Therefore, we would have expected more respondents to say they are subject to SOx.

For those where Sarbanes-Oxley does not apply (or at least they believe it does not), 39.1% are considering using SOx or some other corporate governance standard as a best practice model; 60.9% are not. We think this reflects a trend that captive owners see a need to consider some sort of corporate governance protocol as a best practice model, regardless of whether it pertains to them today.

Who is providing the most guidance on the captive’s corporate governance standards? 43.3% said their captive manager, and an identical 43.3% said corporate counsel. 30% said their auditors, mostly outside auditors versus internal auditors. Others providing guidance include an independent fiduciary, management, broker and consultant, regulator, Board of Directors and CEO. Just one respondent said they were getting no guidance. (Note: Rrespondents could make two responses).

We were surprised that captive managers were offering the most guidance. Until recently, it appeared that captive managers were saying that corporate governance did not apply to captives, so they tended to avoid being proactive. Also, it appeared that they were seemed willing to let the accountants and others take the lead. This appears to have changed.

We expected counsel and auditors to have major roles, and they do. We noted that the regulator was providing guidance in one case.


captive and ART resources