Revolt in the Boardroom by Alan Murray

Author:Alan Murray
Language: eng
Format: epub
ISBN: 9780061753206
Publisher: HarperCollins

The GM Board of Directors has taken no action regarding any management changes at GM. However, the question of executive leadership is a primary concern to the Board of Directors of any company, and GM is no exception. The GM Board of Directors continues to carefully reflect on the wisest course for assuring the most effective leadership for the corporation.

Even Stempel could read between those lines. The next day, he faxed to Smale a proposed letter of resignation. By late afternoon, the board’s independent directors agreed to accept it.

GM’s action had a profound effect across corporate America, and seemed to prod slumbering directors at other troubled companies into action. Within a short time, boards terminated CEOs at American Express, IBM, Eastman Kodak and Westinghouse.

The firing at American Express was particularly instructive. The CEO James Robinson was replaced by his handpicked successor, Harvey Golub, and allowed to remain in place as chairman. That caused the company’s stock to drop, and prompted outrage from a number of institutional shareholders. At a hastily organized breakfast with Golub, that included representatives of 20 percent of the company’s shareholders, they demanded Robinson’s resignation. Barely 24 hours later, Robinson did resign.

In the spring of 1994, at Ira Millstein’s urging, the GM board issued 28 guidelines designed to guide its work as an independent board. They included:

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