The proposed breakup of Motorola into two companies just doesn't make any sense. Here's my thinking: --It's just crazy for a board to cave in to someone like Carl Icahn. He doesn't have the long-term interests of anyone in mind other than his own, and his is...
We've now seen two financial firms fail in the subprime mortgage mess--Countrywide Financial and Bear Stearns. What do they share in common? Spectacularly bad corporate governance. There's been a long-running debate among shareholder activists and corporate leaders whether "good governance" equals "good business," or merely consists of...
IBM is out with an interesting new study that I think speaks volumes about what top managements should be thinking about these days. Essentially, IBM is arguing, based on a survey of 250 companies globally, that we have crossed from one world--in which chief executive officers worry only about shareholders--into...
I've been beating up on the Sprint Nextel board of directors for months and it appears that someone in Kansas agrees with me: four out of 13 directors are stepping down. See this account. Two directors, Linda Koch Lorimer and Keith Bane, told the Securities and Exchange...
This is a fascinating battle where two fundamental impulses--the right of shareholders to earn the best possible returns and the role of an independent media in the American democracy--come into conflict. Disclosure: I've been writing for the Times for seven years, but think I can step back...
By now, it's the perceived wisdom that people who are chief executive officers should not also be chairmen of the board. Institutional Shareholder Services and all sorts of rating agencies state, with complete conviction, that the job should be split--at all times, and at all companies. But...
CEO pay is "too high in most cases," say about one in three directors of U.S.-based public companies in a just-released survey by Heidrick & Struggles International and the Center for Effective Organizations CEO at the University of Southern California's Marshall School of Business. The survey also found...
The Wall Street Journal's Joanne S. Lublin says today that in the latest version of management musical chairs, outside directors are moving insde as chi'ef executive officers. Because it's such a hassle to access the Journal site, here's the jist of what she...
Chief executive officers and top managers have been giving lip service to the concept of ethnic and sexual diversity for many years--with only scant results. Many boards have a token African-American and a token woman, but their presence has no impact on the organization. The number of women on boards...
This is a tough question to ask because Meg Whitman has been a legendary Silicon Valley CEO for 10 years and one of America's leading women CEOs, but ask it we must: does her expected departure from eBay at the age of 51 signal a management failure on her part?...
For many years, CEOs regarded boards as necessary evils. Their goal was to stack the board with people who wouldn't challenge management's authority. After Enron and Sarbanes-Oxley, boards veered in the other direction--they included more independenty directors who were more inclined to challenge and question a CEO and his or...
Okay, let's get real. We've had a series of colossal failures--Chuck Prince at Citicorp, Stanley O'Neal at Merrill Lynch and Angelo Mozilo at Countrywide Financial. All three are losing their jobs or their companies, yet each is walking away with at least $50 million in golden parachutes. This...
Ever since the Enron-era scandals, boards have been becoming more independent, better-organized and tougher on management. Without a doubt, much of that has been necessary. But the great risk is that boards overshoot their core mission and discourage executives from taking risks. This is the heart of...
It ain't supposed to work this way. Howard Shultz launched Starbucks Coffee and eventually brought in Jim Donald, first as head of the company's North American business and then in 2005 as president and chief executive, Donald's elevation to the CEO's job allowed Shultz to retreat from the frontlines to...
Why can't boards learn about how to handle CEO successions? The board of Marsh & McLennan has just made another beginner's error: announcing that CEO Michael Cherkasky will be leaving after three years in the job but not naming a successor. And the apparent reason for making...
This is a difficult subject to raise because John Chambers has been such a forceful and effective CEO of Cisco Systems. But the departure of his No. 2 executive and likely successor, Charlie Giancarlo, forces us to confront the inevitable: is it time for Chambers to move on? ...
The board of Sprint Nextel has been spectacularly ineffective. It's one of the most shocking examples in corporate America of a board that's completely asleep at the switch. First, it allowed word to leak that it was looking for a successor to CEO Gary Forsee, who got...
Following the Sarbanes-Oxley Act of 2002, the audit committees of boards of directors got much stronger. In effect, they took over their companies' financial disclosure process. Compensation committees now are under big pressure to get a grip on CEO and overall executive compensation, and they appear to be responding. ...
Bravo to the board of Coca-Cola and Chairman and CEO Neville Isdell: This is how to handle CEO succession. Isdell, who is 64, announced he would step down as CEO and turn over the reins to Muhtar Kent, 55, who had been serving as president and chief...
Christopher Cox, chairman of the SEC, is taking some heat for a 3-1 decision last week that would prevent shareholders from placing their own candidates for a company's board of directors on that company's proxy ballot. But Cox did the right thing on the issue that is known as "shareholder...
