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Why Bad Directors Aren't Thrown Out
An anonymous reader writes "For publicly-owned companies, the CEO gets most of the spotlight. If the company is successful and the stock goes up, the CEO gets the credit. If the company stumbles, the CEO gets the blame. But an article at the NY Times points how the board of directors for most companies seem to get a free pass, even when their decisions or their CEO selections consistently go wrong. 'Last year, there were elections for 17,081 director nominees at United States corporations, according to the service. Only 61 of those nominees, or 0.36 percent, failed to get majority support. More than 86 percent of directors received 90 percent or more of the votes. Of the 61 directors who failed to get majority approval, only six actually stepped down or were asked to resign. Fifty-one are still in place, as of the most recent proxy filings.' The article uses Hewlett-Packard as an example; the past several years have seen poor CEO choices, the abominable Autonomy acquisition, and billions in write-offs for other failed endeavors. Yet HP's directors were all re-elected."
Of the 61 directors who failed to get majority approval, only six actually stepped down or were asked to resign. Fifty-one are still in place, as of the most recent proxy filings.
61 - ( 51 + 6 ) = 4
The other four were dragged out and burned at the stake by irate shareholders. Encourage this response and I'm certain the other BoD members will straighten their acts out. You only need to make a few examples.
Have gnu, will travel.
Warren Buffet is the son of a four-term congressman who owned a stock brokerage and gave him his first job. He graduated high school in Washington, DC while his father was a sitting member of congress, then was promptly enrolled at U. Penn to study business.
Please stop spreading this "started from nothing" bullshit. It is a myth.