Table: Most Improved Boards
Moved to upgrade governance after an accounting scandal in 1998 and a lawsuit settlement in 1999. Shareholders now approve all stock-option plans for top execs. External auditors are barred from consulting work. Severance deals were curtailed. The board pushed to eliminate staggered board elections after a shareholder proposal failed.
Gets low marks from governance experts because of a $679 million revenue restatement and a $200 billion loss in market cap since December, 1999. Performance is still in the tank, but the company has taken steps to improve governance. The six-member board has a lead independent director. Conducts annual self-evaluations. Meets privately with internal and external auditors. Has added two independent directors and has plans for three more.
Having landed on the Worst Boards list two years ago for awarding top execs a massive pay package, this company has made improvements. It hired Harvard's Jay Lorsch to advise it on governance, then put him on the board; recruited former SEC chief accountant Walter P. Schuetze for its audit committee. Prohibits directors from selling stock until they leave. Still has a ways to go, though. Paid Texas billionaire Sam Wyly $10 million to call off his proxy fight, a move governance experts describe as greenmail, a characterization the company disputes.
Finally taking steps to improve a reputation for lousy governance. Under pressure from director Stanley P. Gold, manager of the Disney family fortune, and other shareholders, the company has severed business relationships with two directors. Tightened board's definition of independence. Recruited governance expert Ira Millstein to advise board.
After emerging from an accounting scandal in 1998 and acquisition by USA Waste in the same year, the company has reformed. Eight new members, all independent, are on the nine-member board, and the audit committee is headed by Jack Pope, former CFO at United Airlines and American Airlines. Side deals between directors and company are banned. Anti-shareholder governance policies, including staggered board elections, are changed.