Sprint Nextel: A Case in Point in Bad Board Management

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 wind of the job search and resigned in October. That left Sprint Nextel without any rea CEO. Paul Saleh, the company's finance chief, took on the job on an acting basis.

Now comes word that the board has turned to an outsider, Dan Hesse, from Embarq Corp., to become CEO. The whole world by now knows that bringing in outside CEOs is high-risk. It takes outsiders time to get their arms around the key issues and key people even if they come from the same industry, as is the case with Hesse. They also run the risk of cultural rejection, much as a transplanted organ can be rejected by the human body.

But the most telling detail is that the board picked Hesse precisely because he was not identified with either the Sprint or Nextel camps within the company. Incredibly, both companies have maintained separate headquarters, Nextel in Reston, Va. and Sprint in Overland Park, Kan., even though they supposedly merged in 2005. That suggests the merger has been completely botched. How could a board not be informed about post-merger integration process? How could this problem have been allowed to fester?

So now a complete outsider is wading into the middle of what appears to be the corporate equivalent of a civil war. He has scant chance and it's just a question of time before Sprint Nextel is split back up or sold together. Billions of dollars of shareholder value have been destroyed.

What do you think should happen next?