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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)
                ------------------------------------------------------
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, Bloomberg L.P.
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