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The Best Boards of Directors
COLUMN (1): Overall Score
COLUMN (2): Survey Score
COLUMN (3): Analysis Score
BOARD PERFORMANCE POLL
COLUMN (4): Shareholder Accountability
COLUMN (5): Board Quality
COLUMN (6): Board Independence
COLUMN (7): Corporate Performance
GOVERNANCE GUIDELINE ANALYSIS
COLUMN (8): Shareholder Accountability
COLUMN (9): Board Quality
COLUMN (10): Board Independence
BW (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
RANK ----------------------------------------------------------
1. CAMPBELL 97.8 47.8 50.0 9.0 9.1 8.8 9.3 10.0 7.3 10.0
SOUP
2. GENERAL 79.6 43.6 36.0 7.9 8.3 7.7 8.6 8.0 6.7 7.0
ELECTRIC
3. IBM 76.5 33.5 43.0 8.3 8.5 9.3 9.0 8.7 6.7 10.0
4. COMPAQ 76.3 26.3 50.0 8.8 8.9 8.9 8.6 10.0 8.0 10.0
COMPUTER
5. COLGATE 75.6 26.6 49.0 9.3 9.4 9.5 8.1 8.7 7.3 10.0
PALMOLIVE
6. CHRYSLER 74.9 35.9 39.0 8.2 8.0 7.8 8.8 7.3 6.7 6.5
7. JOHNSON & 71.8 35.8 36.0 8.9 8.7 8.8 9.0 8.7 6.0 7.0
JOHNSON
8. MERCK 71.5 35.5 36.0 9.3 8.8 8.3 8.8 2.7 6.0 8.0
9. HERCULES 70.8 26.8 44.0 9.3 8.8 9.4 9.0 3.3 9.3 10.0
10. EXXON 69.8 25.8 44.0 8.3 8.9 9.4 8.6 10.0 7.3 9.0
11. CERIDIAN 69.6 23.6 46.0 8.0 8.0 8.5 7.0 7.3 8.0 9.0
12. INTEL 69.3 31.3 38.0 7.7 8.3 7.3 8.3 6.7 8.0 8.0
13. GENERAL 66.2 35.2 31.0 7.5 8.5 8.0 7.6 0.7 6.7 10.0
MOTORS
14. CITICORP 66.0 33.0 33.0 8.5 8.4 8.1 8.9 6.7 6.0 7.0
15. EASTMAN 65.7 29.7 36.0 9.0 8.3 9.0 8.7 3.3 7.3 10.0
KODAK
16. MICROSOFT 64.1 22.1 42.0 7.3 6.5 7.0 8.3 8.7 7.3 9.0
17. HEWLETT- 63.5 28.5 35.0 8.3 8.3 8.0 8.7 4.7 8.0 8.0
PACKARD
18. ABBOTT 63.1 27.1 36.0 9.3 9.4 9.4 9.1 5.3 6.7 9.0
LABORATORIES
19. PHILIP 62.5 28.5 34.0 7.4 8.2 8.8 8.8 6.7 2.0 5.5
MORRIS
20. COCA-COLA 60.0 42.0 18.0 8.2 8.4 7.9 9.0 3.3 2.7 4.5
21. AMR 59.8 26.8 33.0 8.3 8.0 8.7 8.7 6.0 4.0 9.0
22.CATERPILLAR 57.1 28.1 29.0 9.0 9.0 9.0 8.5 4.0 3.3 9.0
23. SEARS 56.8 30.8 26.0 7.6 7.4 7.4 8.3 -1.3 5.3 7.5
ROEBUCK
24. TRAVELERS 53.6 27.6 26.0 9.0 8.3 8.3 9.0 2.0 6.0 7.0
25. HOME DEPOT 53.5 27.5 26.0 9.3 9.4 9.4 9.0 4.0 6.7 5.0
DETAILS
1. CAMPBELL SOUP: Wins plaudits for governance practices; disclosed results of
recent board self-review
2. GENERAL ELECTRIC: CEO sits on one board: his. Each outside director owns
more than $450K of GE stock
3. IBM: Board's hiring of outside CEO and his results so far win investor favor
4. COMPAQ COMPUTER: Nonexecutive chairman; reviews both board and director
performance
5. COLGATE PALMOLIVE: Highly independent board boasts stellar cast of
outsiders, with one insider: CEO Mark
6. CHRYSLER: Directors met with 40 major investors,adopted governance ''best
practices''
7. JOHNSON & JOHNSON: Board gains kudos for overall quality and accountability
to shareholders; no pensions
8. MERCK: Created committee last year to evaluate board performance; only
insider is CEO
9. HERCULES: Board scores high for quality, independence; evaluates self for
effectiveness
10. EXXON: Outside directors each average $490K of stock; no pensions; annual
election
11. CERIDIAN: Governance panel does biannual reviews of board and individual
director performance
12. INTEL: Outside directors each own more than $350K of stock; high marks for
quality, independence
13. GENERAL MOTORS: Governance principles won favor, but many directors own
little stock
14. CITICORP: Investors praise performance, yet 4 of 13 are insiders; outsiders
on too many boards
15. EASTMAN KODAK: Took board too long to get new management, but wins praise
for doing so
16. MICROSOFT: Some critics say eight-person board is too ''insidey,'' but it
scores well on all measures
17. HEWLETT-PACKARD: Superior returns win investor approval; 4 of 11 outside
directors own little stock
18. ABBOTT LABORATORIES: Scores highly on independence; all but 1 of outsiders
own more than $100K of stock
19. PHILIP MORRIS: Each director owns at least $165K of stock; board ditched
pensions this year
20. COCA-COLA: No. 3 in survey, but board is cozy, with pensions, potential
conflicts, staggered elections
21. AMR: CEO is only insider; lacks an active chief of another major public
company
22.CATERPILLAR: Eight of 10 outsiders sit on too many boards, but board scores
high for independence
23. SEARS ROEBUCK: Once publicly ridiculed, directors gained investor
confidence with turnaround
24. TRAVELERS: First major company to pay directors in stock; outsiders average
$2.1 million in stock
25. HOME DEPOT: Board wins praise for active involvement; directors required to
regularly visit retail outlets
The highest possible score on this ranking is 100, with half the points coming
from BUSINESS WEEK's survey of money managers and governance experts and half
from an analysis of the makeup of each board. For each individual category, the
maximum score is 10.
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Updated June 14, 1997 by bwwebmaster
Copyright 1996, by The McGraw-Hill Companies Inc. All rights reserved.
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