Corporate board members bowing out
TEXT OF STORY
Kai Ryssdal: Corporate America is in something of a crisis, as you know. That means meetings — lots of them. For some who sit on corporate boards, all that time around the table or on conference calls is getting to be too much. Especially when you consider that many directors serve on more than one board, or they run their own big — and troubled — companies. An analysis published today by The Wall Street Journal shows 42 firms have lost big-name corporate directors this year. And, wouldn’t you know it, they’re in hard-hit industries like retail, housing and financial services. Marketplace’s Renita Jablonski reports on the growing number of empty seats about the boardroom table.
Renita Jablonski: Ford Motor Company has a lot to figure out right now, like how to convince the government to bail it out. Mark Truby is director of corporate communications at Ford.
Mark Truby: The board’s input and direction in times like this is very valuable.
But board members’ time is valuable too. Ford lost two high-profile directors last month — the chairman of Britain’s Vodafone and the chairman of Nokia and Royal Dutch Shell.
Truby: We’re asking quite a lot of our board, a lot of time and attention, and then for those directors it would have been more international travel, so that was really what was behind their decision to resign from the Ford board.
George Davis says many outside directors are also getting heat from their own boards.
George Davis: That they maintain extra focus on their own company during these turbulent times.
Davis is co-head of the global board practice group for Egon Zender International. He recruits corporate directors. Davis says now that the financial crisis has hit companies in every industry, it’s not as easy to get top executives to sign up, especially for boards of struggling companies.
Davis: People are worried about liabilities. You know, joining a troubled company board midstream is a very difficult recruit.
Davis says boards typically meet six to seven times a year.
Davis: But if you’re on a troubled company board, there’s going to be multiple conference calls during the week, weekend calls. I mean you’re really signing up for more than just what the average directorship would entail.
That’s left some empty seats at AIG, Sprint Nextel and other companies. And boardrooms may not be full again until the economy recovers.
I’m Renita Jablonski for Marketplace.
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