These days, I wouldn't sit on the board of a public company if they paid me. A lot. Not that anybody's kicking down my door. I'm just saying, it's a thankless job. I mean, nobody thinks current public board configurations work ... not even a little.
For one thing, every board decision is second guessed. That should give you some idea why investors are always complaining that boards are reactive or don't react at all. Why should they be proactive? They just get crap for it when they are. And when they're not, they're accused of being in the CEO's back pocket. They can't win.
And god forbid Carl Icahn or some other big fund manager / corporate raider decides to buy up a bunch of the company's stock and take on the board in a big nasty public proxy battle that goes on forever and ever. What a nightmare.
I want you to try, just for a minute, to put yourself in the shiny, patent leather shoes of an aging former executive. You're trying desperately to stay relevant in a fast-changing world. Doing your bit to supplement a meager investment income and give the wife a break by getting out of the house once in a while.
Then wouldn't you know it, something goes wrong, the stock plummets, and before you can say "class action," you're named in all kinds of lawsuits. Sure, there's D & O insurance, but ask anybody who's ever been sued, it sucks whether you're insured or not.
It's a sad state of affairs. Really. In fact, here are just a few examples of boards that can do no right:
Last week, AMD's board ousted CEO Dirk Meyer because, as analyst Rob Enderle put it, "The tablet right now is the fastest growing segment. It may be overhyped, but missing it and pretending it's not happening at all isn't going to work for any board."
Just when you think here's a board that's ready and willing to take action, long-time tech reporter Therese Poletti takes them to task for essentially making Meyer the fall guy when they're just as culpable for signing off on the company's strategy as Meyer is.
More importantly, the board was also a party to AMD's highly-distracting and overpriced acquisition of ATI under former CEO Hector Ruiz who, in all fairness, may have been busy spilling his guts to the FBI in the Galleon insider trading scandal.
Oracle CEO Larry Ellison skewered H-P's board for firing then-CEO Mark Hurd, "The H-P Board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago. H-P had a long list of failed CEOs until they hired Mark who has spent the last five years doing a brilliant job reviving H-P to its former greatness. In losing Mark Hurd, the H-P board failed to act in the best interest of ..." and so on.
Not to pile on, but I shared Ellison's view at the time: "HP's board has now royally screwed up three times over the past decade. There's something chronically wrong with [them]." First Carly Fiorina, then Patricia Dunn, now Hurd. Gosh, I can't wait to see what the board's latest CEO pick, Leo Apotheker, does for an encore.
The mother of all embattled boards has to be Yahoo. After ousting CEO Terry Semel, the board hired Yahoo founder Jerry Yang, a guy with virtually no experience running a business, let alone executing a complex and risky turnaround. Then they famously botched the Microsoft merger that cost shareholders $20 billion or so. No surprise they lost more than 100 key executives along the way.
Then there's Dell, Motorola, Nokia, and my favorite, Sun, where the board sat idly by while Scott McNealy and his hand-picked successor, Jonathan Schwartz, neutered a once-great company and slowly, agonizingly, ran it into the ground.
Why are these all tech companies? How should I know? Ask me a different question, like do I think the tech Industry has a problem with weak executive management and board oversight? Well, what do you think?
Speaking of fixing boards, a few weeks ago, Harvard Business School lecturer Robert Pozen proposed A New Model for Corporate Boards that essentially says companies should have fewer, more engaged, and higher-paid directors. Not to pull a muscle patting myself on the back, but I said the same thing months ago in How to Make Corporate America Behave Itself: "Pay fewer directors more to do more," I said, among other things.
Come to think of it, maybe the WSJ and HBR are following the wrong management guy. I'm just saying.
Image courtesy Flickr user John Morton