Under increasing pressure when it comes to CEOs, boards too often either circle the wagons or pull the trigger rather than take considered action
Some corporate boards miss the signals that it's time to make a change; others act too hastily. And there are boards that live by the Tammy Wynette maxim to "stand by your man." The sudden leadership change at JetBlue (JBLU), investor activist Carl Icahn's losing bid for a seat on the Motorola (MOT) board, and failed challenge to chief executive officer Ed Zander provided compelling drama last week. Motorola's owners happily endorsed their current CEO's efforts to reposition the firm (something that the board didn't do with Zander's predecessor) while Jet Blue's board denied their founder that opportunity.
Just a week earlier, BP's (BP) board had displayed a different methodology by circling the wagons around its imperiled leader. For far too long BP's board failed to notice that the responses of its former CEO, Lord Browne, to massive environmental and safety disasters as well as to market-manipulation scandals did not jibe with BP's widely promoted corporate principles. In recent years, troubled boards, such as at Morgan Stanley's (MS) during Phil Purcell's reign, Computer Associates' (CA) under Sanjay Kumar, Home Depot's (HD) under Bob Nardelli, and of course Tyco's (TYC) under Dennis Kozlowski, also showed remarkable neglect.
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