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The Worst Boards of Directors
COLUMN (1): Overall Score
COLUMN (2): Survey Score
COLUMN (3): Analysis Score
GOVERNANCE SURVEY RESULTS
COLUMN (4): Shareholder Accountability
COLUMN (5): Board Quality
COLUMN (6): Board Independence
COLUMN (7): Corporate Performance
BOARDROOM ANALYSIS RESULTS
COLUMN (8): Shareholder Accountability
COLUMN (9): Board Quality
COLUMN (10): Board Indepedence
BW
RANK (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
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1. ARCHER -3.0 -20.0 17.0 1.7 2.4 1.0 3.0 3.0 7.3 -1.0
DANIELS MIDLAND
2. CHAMPION 9.9 3.9 6.0 2.5 2.5 2.5 2.0 -7.3 7.3 3.0
INTERNATIONAL
3. H.J. HEINZ 13.9 1.9 12.0 2.0 2.0 0.7 3.3 1.3 6.7 0.0
4. ROLLINS 14.4 -0.6 15.0 0.5 1.0 0.5 0.5 5.3 6.7 -1.5
ENVIRONMENTAL
5. NATIONSBANK 18.1 25.1 -7.0 8.5 8.5 8.0 8.5 0.0 2.0 -5.0
6. AT&T 20.9 -3.1 24.0 2.5 3.9 3.3 1.8 0.0 3.8 10.0
7. KMART 21.1 -1.9 23.0 2.9 3.3 3.7 2.1 -4.0 6.0 10.0
8. UNISYS 23.4 3.4 20.0 2.5 2.5 3.5 2.0 -2.7 4.0 9.0
9. ETHYL 25.4 2.4 23.0 2.0 2.5 1.0 1.5 2.7 2.0 8.0
10. FLEMING COS. 25.6 4.6 21.0 2.5 2.5 5.0 2.5 -2.7 8.7 6.0
11. WARNACO 26.7 3.7 23.0 2.5 2.5 1.5 3.0 6.7 6.0 2.0
12. BROWNING- 26.9 3.9 23.0 1.5 3.5 4.5 1.0 1.3 7.3 5.0
FERRIS
13. WESTINGHOUSE 29.6 1.6 28.0 2.8 2.8 3.2 2.0 10.0 0.0 6.5
14. DISNEY 29.8 11.8 18.0 5.0 6.0 3.0 6.5 1.3 9.3 1.0
15. RJR NABISCO 31.1 2.1 29.0 2.8 2.5 3.0 1.8 6.7 6.0 5.0
16. W.R. GRACE 32.2 -0.8 33.0 1.8 2.6 2.8 3.0 0.7 9.3 9.0
17. OGDEN 32.4 2.4 29.0 2.5 2.8 1.0 2.4 5.3 8.7 4.0
18. ADVANCED 33.8 -1.2 35.0 2.3 2.0 1.3 1.0 7.3 10.0 4.5
MICRO DEVICES
19. QUAKER OATS 33.9 4.9 29.0 3.0 3.5 3.5 2.7 2.0 6.7 8.0
20. MORRISON 35.6 1.1 34.0 2.3 2.3 1.7 2.0 2.0 8.7 9.0
KNUDSEN
21. H&R BLOCK 36.4 4.4 32.0 2.5 2.8 2.8 2.4 5.3 8.0 6.0
22. TIME WARNER 36.8 2.8 34.0 2.8 2.5 3.3 2.5 3.3 7.3 9.0
23.BAUSCH & LOMB 38.2 6.2 34.0 3.3 4.0 5.3 2.0 1.3 8.0 10.0
24. APPLE 38.3 2.3 36.0 1.0 3.0 3.0 1.0 2.7 6.0 10.0
COMPUTER
25. HUMANA 38.4 4.4 34.0 2.0 3.0 3.0 2.5 2.7 8.0 9.0
DETAILS
1. ARCHER DANIELS MIDLAND: Investors overwhelmingly scorn board for its lack of
independence
2. CHAMPION INTERNATIONAL: Directors own little stock; CEO on two boards of
fellow directors
3. H.J. HEINZ: Board loaded with insiders, including two on nominating panel;
six directors over 70 years old
4. ROLLINS ENVIRONMENTAL: Probably the least independent board of any public
company: all members insiders
5. NATIONSBANK: Funds cheer performance, but board flunks tests of independence
and accountability
6. AT&T: Directors on too many boards, own little stock; lacks any outsider
with hi-tech expertise
7. KMART: Board replaced CEO but took too long to act; too many directors own
too little stock
8. UNISYS: Outside directors own little stock; investors disenchanted with
company's performance
9. ETHYL: Investors still unhappy with returns and once-clubby board that has
been revamped
10. FLEMING COS.: Lackluster returns frustrate investors, who view board as too
cozy
11. WARNACO: Half of six-member board are insiders, with four directors also on
an affiliated firm
12. BROWNING-FERRIS: Too many insiders on board; too few directors with
significant stock ownership
13. WESTINGHOUSE: Outside directors average more than 5 boards each; lack
expertise in core businesses
14. DISNEY: Board too cozy, with 5 of 11 insiders, including two who draw fees
from company
15. RJR NABISCO: Four of 10 directors are insiders; outsiders average more than
five boards each
16. W.R. GRACE: Paid $420,000 to a director's consulting firms; still lavishes
pensions on directors
17. OGDEN: Board has too many insiders; 4 directors over 70 years old,
including one who is 84
18. ADVANCED MICRO DEVICES: Investors dislike CEO's control of board; CEO also
chairs nominating panel
19. QUAKER OATS: Pension-lavished board shares blame for Snapple acquisition
and drop in performance
20. MORRISON KNUDSEN: Investors blame poor board oversight for bankruptcy;
scores low on accountability
21. H&R BLOCK: Insiders sit on nominating and compensation committees of this
weak performer
22. TIME WARNER: Investors unhappy with lagging performance; 1 director on 16
boards
23.BAUSCH & LOMB: Board failed to exercise enough oversight over former CEO;
directors own little stock
24. APPLE COMPUTER: Investors blame board for not acting more quickly to
replace former CEO Spindler
25. HUMANA: CEO's son sits on eight-member board; three directors fail to own
much stock
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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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