Risk & Compliance

Shuffleboard Season

New directors slide into place as others are knocked aside.
Stephen TaubFebruary 4, 2004

As most large companies gear up for an annual rite of spring — shareholder meetings — a number of companies are announcing their board candidates, changing the way they elect their board members, or booting a number of them off the ballot.

Just in the past week alone, the activity has been furious.

For example, FedEx Corp. became the latest company to agree to submit a proposal that would require each director to stand for election annually. Currently the board is divided into three classes, and directors are elected to staggered three-year terms. The vote will take place at the next FedEx annual meeting in September 2004. Passage of the proposed bylaw amendment will require the approval of 80 percent of stockholders.

Meanwhile, scandal-ridden HealthSouth Corp., which since December has announced a slew of changes aimed at improving its corporate governance practices, announced the election of two new members to its board of directors and to the special committee of its board of directors: Steven R. Berrard and Edward A. Blechschmidt.

Blechschmidt is a former chief financial officer of Unisys Corp. and former chairman and chief executive officer of Gentiva Health Services. He also serves on the boards of directors of Gentiva Health Services Inc.; Neoforma Inc.; Lionbridge Technologies Inc., and Garden Fresh Restaurant Corp.

Berrard is a former vice chairman, president, and chief executive officer of Blockbuster Entertainment Group. Florida Governor Jeb Bush also appointed Berrard to the board of directors of North Broward Hospital District, one of the 10 largest public health systems in the United States. In addition, he serves on the board of Boca Resorts Inc. and previously served on the board of Birmingham Steel Corp.

Lowe’s Cos. said its board of directors has appointed O. Temple Sloan Jr. to its board of directors. Sloan is chairman and CEO of General Parts Inc., a distributor of automotive replacement parts. He replaces Kenneth D. Lewis, the chairman, CEO, and president of Bank of America, who announced plans in mid-2003 to resign from Lowe’s and other outside corporate boards.

There have been a few other high-profile resignations from boards of directors:

  • Merrill Lynch & Co. said Robert Luciano, who has served on its board for 14 years, has stepped down. The former chairman and chief executive officer of Schering-Plough reportedly retired because six months ago his two closest allies — Thomas Patrick and Arshad Zakaria — were forced out in a power struggle with chief executive Stan O’Neal.
  • Electronic Data Systems Corp. said William H. Gray III intends to resign from its board prior to EDS’ annual meeting on May 25. Gray, president and CEO of The College Fund/UNCF, has served on the EDS board since 1997. He said his resignation is “an appropriate step to eliminate any appearance of a lack of independence,” given that EDS chairman and CEO Mike Jordan is also currently the UNCF chairman and once served on the UNCF board’s compensation committee. Gray also cited EDS’ governance principles, which recommend a limit on the number of board memberships for EDS directors.
  • Klaus Esser, the former chief executive of German mobile phone company Mannesmann, has resigned from the board of directors of Alstom SA, the French power and transport engineering company. He and another former Mannesmann executive are currently on trial in Germany for alleged illegal enrichment relating to a bonus of 60 million marks that he received during the takeover of Mannesmann by Vodafone Group PLC in 2000. Alstom announced that Esser will be replaced as chairman of the audit committee by another board member, Jean-Paul Bechat, the chairman and CEO of French jet engine maker Snecma.
  • ActivCard Corp. said its chief executive officer, George Garrick, who joined the company last October, had resigned after disagreeing with the board of directors about strategic direction.