Morgan Stanley 2005 Annual Report Download - page 16

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14
LETTER TO SHAREHOLDERS
Our strategy is designed to help us deliver superior returns to
our shareholders, but we intend to remain open to other opportu-
nities and mindful of changing circumstances. If businesses aren’t
performing, we’ll take the necessary action to ensure we are maxi-
mizing shareholder value. As the marketplace changes, we will
move quickly to take advantage of opportunities we see to enhance
our businesses or accelerate our growth. We will evaluate how we
are doing along the way, whether opportunities have changed and
whether we need to adjust our strategy accordingly.
During the past year, the firm also undertook significant
corporate governance changes, which include:
•Modifying the Board’s corporate governance policies to
create a lead independent director position and to consider
“withhold” votes in the election of directors; and
•Approving several charter amendments to recommend to
shareholders for approval at the company’s 2006 shareholders’
meeting, including accelerating Board de-staggering, elimi-
nating supermajority vote requirements to remove directors
and eliminating the requirement that directors be elected by
plurality vote.
Further, between June 2005 and year-end, the Board of
Directors was substantially reshaped through the resignation
of nine directors and the election of four new, non-employee
directors: Roy Bostock, Erskine Bowles, Charles Noski and
Griff Sexton. We appreciate the dedicated service of all the
directors who stepped down this past year and thank them for
their commitment and many contributions to the firm.
This year truly tested Morgan Stanley, but the firm has emerged
a stronger and more unified organization. We are grateful to all of
you who continue to put your faith in the people of this great firm.
As we mark Morgan Stanley’s 70th anniversary this year, I strongly
believe that the firm’s finest years lie ahead of us, and I am confi-
dent that those who continue to invest in Morgan Stanley will reap
the rewards of the performance we are committed to achieving.
Sincerely,
We will be vigilant in
executing on our
strategy and maintaining
our focus on superior
performance. And
we will be open and
transparent with you
about our progress
along the way.
February 1, 2006
John J. Mack
Chairman and Chief Executive Officer