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The economy is in sorry shape, and come nine days from now when the inauguration occurs, there will be another group of people out looking for work: former Bush administration officials. One place they may have less luck? Corporate boards.
According to a new study in the Academy of Management Journal by Richard H. Lester of Texas A&M and colleagues from Arizona State and Tulane Universities, which my colleague Nanette Byrnes wrote about here, the Democratic majorities in the Congress, Senate, and executive position at the White House suggest Bush’s former officials will be in less demand. “Our research reveals that if a party is shut out of both Congressional houses plus the executive branch, as Republicans will be,” said Lester in a statement, “its members’ chance of joining the board of a large corporation is about 30 percent less than it would otherwise be.” In other words, the relationships and political sway these officials bring isn’t as valuable without their party in power.
Still, the researchers note that despite that dip, recruitment will still be much greater than what it was several decades ago. They cite Korn/Ferry International numbers that show that in 1973, just 14% of large corporate boards included former high-level government officials. By 2003, that number had increased to 59%, even though the average number of outside board members had decreased, unfortunately, from 16 to just nine. (The most recent number puts about 53% of corporate boards with a former government official.)
Also, the researchers find—and this is hardly surprising—cabinet members like Condoleezza Rice or Elaine Chao will be most likely to find director spots. The study showed that former cabinet members were more than twice as likely as former senators, and more than five times as likely as former representatives, to be appointed corporate directors between 1988 and 2003, the 16 years covered by the research.
Interestingly, eight of the 11 former officials who were appointed to seven or more boards were cabinet members, as were all of those appointed to 10 or more. The former government official with the most board appointments, the study found, was Reagan Secretary of Labor Ann D. McLaughlin, who was on 13 boards at the time the research was performed.
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