Worst Boards of the 21st Century: Who Made the Cut?
November 10 2011 by ChiefExecutive.net
Amid the economic turmoil of the 21st century, many companies have suffered. Some observers place blame with their boards of directors. The Daily Beast and GMI compiled its list of the 10 worst corporate boards of the decade. Here were the worst boards (and the poor decisions they made regarding senior executives):
- Lehman Brothers - inadequate oversight of executive compensation
- Countrywide Financial - inadequate oversight of executive compensation and controlled by an over-dominant CEO
- News Corporation – excessive CEO compensation
- Worldcom – approval of more than $160 million in loans to CEO
- Tyco International - allowed CEO and CFO to plunder the company
- Adelphia Communications – approved more than $230 million to the founder’s family
- General Motors – general failure in strategic planning
- American International Group – excessive CEO pay
- K-Mart - excessive CEO employment agreements
- Hewlett Packard – excessive CEO employment agreements and no succession planning
According to The Daily Beast and GMI’s list, most of the worst boards had a history of high CEO compensation. Though important, the compensation of one employee cannot explain its demise or need for a bailout. Do you think that CEO compensation was one of the biggest reasons for these companies’ woes? Are there any other boards you would add to the list?