Asking another corporation for its hand in marriage is always a delicate affair. But does a chief executive need to bring the directors along as chaperones? Does a merger-hungry C.E.O need his or her parents’ blessing before making a proposal?
E. Stanley O’Neal of Merrill Lynch got caught last month making eyes at Wachovia without first notifying his entire board of directors. His merger approach didn’t get very far, but Merrill’s board members cited it as one of the reasons for his ouster last week. “He was trying to hawk the firm to save himself,” said one person close to the board who requested anonymity because he is not authorized to speak to reporters.
Whatever Mr. O’Neal’s motives, his wooing of Wachovia raises a corporate-governance quandary: What are the rules of etiquette for a C.E.O. pursuing a deal?
I’m not here to defend Mr. O’Neal’s performance at Merrill, but it seems like an awfully convenient excuse by the firm’s board to claim that he was acting behind its back, when bigger issues — like the strategy that led to the firm’s $8.4 billion write-down — had been approved on its watch.
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