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{ 19 comments… read them below or add one }
Pfizer. It is hard to believe that the Pfizer board was in the dark. Generic (statin) drugs have eroded the market share for Lipitor and the Pfizer worker base and profits have declined. Pfizer has engaged in a very aggressive magazine and publicity campaign, paid articles and other tactics to regain market share. But at what point does the public and Congress get very upset with repeated violations and big fines?
I agree completely with the previous comment. It is difficult to imagine a situation where multiple charges and settlements took place and senior management was not aware of it. This had to involve the General Counsel who should have informed the CEO, who in turn should have informed the board. If this sequence did not take place, heads should roll. Also, the board definitely has some responsibility in this because ethics start at the top and work down.
Should Boards get involved in product name changes? Recall the great flap over Classic Coke some years back. Board members need to be apprised of major shifts in marketing strategies and that may include brand names.
Comp Committees Take Note:
I would argue that regardless of whether a director is on the comp committeehe he/she is responsible for looking carefully at comp decisions not just delegating them to the comp committee and simply accepting whatever they recommend. All directors will suffer the same negative publicity if a bad comp decision hits the media.
The future of newspapers may be online, with Kindle type readers.
The question is how much to charge for newspapers, and whether for
the entire paper or only those sections one wants: Business, Sports, International?
The Wall Street Journal recently surpassed USATODAY for national circulation. But metro dailies are down as much as 50% including in Boston. Can they last five years?
The Take Charge Chairman. Reader’s Note.
Is Whitacre too strong for GM’s good, or is he the perfect man for the Chairman’s job but not the CEO position? These are the questions. From my standpoint, I’d say yes to the Chairmanship, no to the CEO position, and I would make Ed Whitacre a pivotal component in the CEO search and hiring decision from day one. Otherwise you’ll never get a quality candidate.
Re: “I Quit.” (TDL, 12/14/2009)
The comments on AIG compensation anticipated another round of departures, this time from very talented women executives who are sure they can do better elsewhere.
AIG was a terrific insurance company, pentrating into China and engaging in creatiuve innovations. Unfortunately, one division got them overextended in insuring complex financial transactions that the brightest of economists thought would hold up. It is not yet clear that we can stop, slow or moderate another surge of creativity over the next decade.
Re: Blockbuster (TDL, 1/6/10)
Anyone know a Blockbuster board member other than Sumner Redstone? Who else gets to make a move? Interesting questions about how we will access films in the future.
Re: Blockbuster (TDL, 1/6/10)
Blockbuster’s problems began when it was sold to Viacom. Viacom stripped out all of the integrated assets (Spelling, Republic etc.) and used BB strictly as a cash cow to buy other assets such as Paramount and CBS. Viacom then saddled BB with huge debt and set it adrift on its own. Meanwhile Netflix, TiVo and others had free reign.
Blockbuster under previous management was synonymous with Entertainment no matter what the format. Viacom destroyed a great brand.
Re: “Ed Notes, Looking Back” (TDL, 1/6/10)
Reference your comment in the recent Letter about AIG needing some good PR. First, I agree with you and then I saw the next day on the WSJ front page that GM’s Chair Ed Whitacre must have seen your remarks and boldly stated “My prediction is we {General Motors} will be profitable in 2010″
Re: Financial Regulators, Reader’s Note
Congress is now aggressively looking at past regulators and others to assign blame for the current financial crisis. Certainly they played a role, especially as it relates to poor oversight. But, who were the underwriters of these mortgages, who packaged them into securities, who rated the securities, and then who sold them? To really expand the club, who was stupid enough to insure them? There is plenty of blame to go around, and numerous people qualify for the all-star cast beyond just the regulators.
Re: “Women on the Payroll” (TDL, 2/17/10)
The College of St. Catherine in Minnesota has published a research paper on the number of women on corporate boards and at the “C” level in corporations. When one considers that women account for 90% of the purchasing descisons, it is astounding that there are so very few women in these roles. What are corporations thinking? A great group to contact is the Womens’ Business Leaders in Healthcare. Their goal is to increase the number of executive women serving on for-profit boards , and they have the contacts to make this happen.
Re: You’re on the Board at CIT (TDL, 3/2/10)
Here’s one vote for Thain. He restored integrity to the NY Stock Exchange after Grasso left. He had a solid two dozen years in banking. Did Merrill Lynch have a bad year in 2008? Yes, but what investment bank or cluster of funds didn’t? Thain has degrees from MIT and the Harvard Business School. Let’s give him a chance to take CIT out of bankruptcy and TARP.
RE: Palm Inc. (TDL, 3/31/10)
With the introduction of the Palm Treo 600 the US was introduced to the Original Smartphone. Subsequent generations eventually acquired a feature set that encompassed what all the modern phones of today can do. This included a touch screen, multitasking, web browsing, tethering, business applications such as spreadsheets and presentations, video and audio player, and the list goes on. More importantly, the platform was open for developers to write their own applications for it, and even those home-brewed apps can compete with the Apple Apps Store in the availability of software to do what you need. And more to the point, those applications were actually useful. Palm Inc. needs to go back to its roots and play their own game, not the closed platform and limited features that plague the market today.
Re: You’re on the Board at Massey Energy (TDL 5/11/10)
Massey Energy Inc. I think the board totally missed the ball on the safety violations. They have mines and there have been significant safety violations and deaths around the world. A responsible board member should have asked years ago, how are we doing and what does our safety record look like? This behavior could have changed company perspective on safety. I know of a major automobile manufacturer who responded in this way to a board request for data.
Re: You’re on the Board at BP (TDL 6/1/10)
Subcontracting: It would be worth revisiting this subject in greater detail as the BP saga unfolds. Exploration and development firms in the petroleum industry generally contract out all phases of the development of a producing well from “dry hole” drilling through completion. This practice was long established on a global basis prior to the coining of the phrase “supply chain.” As the “operator,” the Ex & Dev firm turns over each phase of the well‘s development to a highly experienced oil field service firm. The operator has a detailed contract with each contractee which allows the operator to overrule the contractee. However, in so doing, the operator ‘takes back’ responsibility. The legal side of such practices in the petroleum industry is very well defined and is memorialized in specialized legislation at both the state and federal levels. As supply chains have proliferated globally, the general law has fallen behind, particularly in regard to Asia – recall recent instances of lead in paints and adulterated fillers in Chinese products sent to the US. It would be interesting to follow this subject up by engaging Boeing which is currently managing one of the most pervasive and sophisticated global supply systems for both engineering services as well as subcontracted parts manufacturing
Re: Social Media (TDL, 6/1/10)
Social Media: Critical subject. Firms should have Face Book pages linked back and forth to their websites. Marketing folks should be using Twitter to tap into ‘opinion leaders.’ A firm as sophisticated as P&G shouldn’t have made such a stumble. Boards have to grasp the market research potential of social media and marketing executives have to realize that the days of market control are over regardless of how well your overall system works (and P&G’s is one of the best on the globe). Had social media been available when Coke made its disastrous formula change, perhaps they might have caught what their focus groups didn’t
Re: Good Deal, Bad Deal (TDL, 6/1/10)
GM: Leaving aside the fact that the Big Three ceded effective management control to the unions 30 years ago, the Chapter 11 filings of GM and Chrysler undid close to 200 years of federal bankruptcy legal evolution. The protection of the union contracts due to political dictate places all boards in proverbially uncharted waters. If the feds move in on another ‘sensitive’ (from their point of view) filing, that entity may have to push for a Chapter 7. This is a critical subject, one on which you can probably follow up via a judicious link to a web posting by one of the larger bankruptcy specialist law firms. Since federal involvement was not by legislation, but by ‘friendly persuasion,’ boards are faced with a “here be monsters” place on the map.
Re: The Full Story (TDLs 6/1/10 and 5/11/10)
The series of Wall Street lawyer discussions of Risk Metrics and reform legislation shows how defensive big corporations are about “reform” and accountability. There is no shame, no hint of accepting greater responsibility for what almost became a great depression fueled by toxic instruments and corporate greed using customer money to enrich the managers.