The death nearly two months ago of Charles Fruit (left) reduced the board of directors to just eight members at a time when Gannett is facing an unprecedented crisis of investor and employee confidence. Yet, it's not clear whether the company will fill his seat. The board's size has varied slightly in the period I've watched the company closely -- since October 2006. So, it may be that Chairman and CEO Craig Dubow plans to leave Fruit's seat open. That would be a huge mistake.As at all publicly held companies, Gannett's board is charged with looking out for the interests of shareholders. That means overseeing top management, approving key executive hires, and reviewing the strategic plan. Now, as GCI morphs at a too-slow pace into a technology-focused enterprise, the board desperately needs active, seasoned technologists, ideally with engineering backgrounds. Of the seven independent directors other than Dubow, four of them are private-capital and other money-management types.
I write this today, when I suspect the board is meeting to consider tomorrow's scheduled release of second-quarter earnings -- plus other, crucial matters.
There's no time to waste. Protocol suggests a respectful interval between a director's death and a replacement. But Fruit, 61, a marketer for the Coca-Cola Co., died of a heart attack May 27. Since then, the company's stock has plunged 39%, to $17.61 a share, as the newspaper industry approaches free fall. Gannett must have more adult supervision. The company requires a full and engaged board to act as stewards at a time when management needs to be watched even more closely. Director Neal Shapiro (above) -- who, I wrote Saturday, is one of the more qualified members of the board -- can't do all the work.The nominating committee is responsible for picking directors. Its three members are financier and former General Electric executive Arthur Harper; University of Miami President Donna Shalala; and Shapiro, CEO of PBS affiliate WNET-TV in New York.
Chairman Dubow, regrettably, will hold considerable sway over any final choice -- yet another reason for separating the chairman and CEO jobs.
Earlier: As pressure rises, an unnerving 'Dear Colleague' e-mail
How would you like to see the board of directors change? Your replies, in the comments section, below. To e-mail confidentially, use this link from a non-work computer; see Tipsters Anonymous Policy in the green sidebar, upper right.
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"Shalala," yes? Rather than "Shalalah?"
ReplyDeleteD'oh! Thanks; gotta fix that in a few.
ReplyDeleteDo directors really matter? Aren't they just at best a sounding board and at worst rubber stamps for the top management at any company?
ReplyDeleteThe directors are influential people with important jobs of their own. It seems doubtful that any of them are getting up in the morning and saying "I must save Gannett today."
Sorry, but what has Shalalah delivered, and for that matter, her peers?
ReplyDeleteIf anything, you’d think her experience would have led Gannett to sack its bullies as they’ve arguably hurt this company as much as internet competition and swinging economic cycles, if not more. The company knows the costs of sales rep churn, but can’t or won’t admit the organizational costs of allowing bullies to roam, which is millions annually.
Regardless, she and her peers have apparently ignored those costs, and they’ve failed to demonstrate the courage required to truly transform Gannett years ago. Hell, recruit newly retired Dick Harrington or one of his lieutenants. As Thomson’s CEO, he transformed it to the electronic world years ahead of Gannett. Yes, out of newspapers, but guess is that at least one of them would demonstrate more courage and urgency than Gannett’s current lot of directors. And, besides, look who owns Rueters now.
Oh, Dick Harrington, there's a name I had forgotten. Although I would like to say we should bring in talent that knows how to run papers, we can't be a newspaper company anymore.
ReplyDeleteAfter this morning's NPR story, I almost felt like turning my car around and going home, sounded like every paper in the country had closed over night.
Here's audio... http://tinyurl.com/5qfvzj
I'd have to agree with the rubber-stamp comment. What has the Gannett board ever done to justify its existence?
ReplyDeleteAn actual rubber stamp, stashed in Craig's desk drawer between meetings, could replace the entire board and save the company a ton of money.
Any board vacancy that would be filled by this board (and let's face it, the nominating committee would be strongly influenced by Gannett management) would be another toady. UNLESS a large shareholder or two decides they've had enough of the slide and current mismanagement and urges the nomination of an outsider with business acumen, particularly of this industry. Otherwise, you're filling a slot with someone as useless as most of the directors currently are. And spending upwards of $100,000 a year (director's fee, stock, committee fees, travel, charitable matching contributions, etc etc etc) for someone like that makes absolutely no sense. There are already 5 Dubow fans already on board. Do we really need another?
ReplyDeleteThe board problems are a result of having a unified CEO/Chairman of the Board Position. If the COB position was independent of the CEO then the board might be better able to exert control over the CEO as the board would bring in new members rather than the CEO bringing on supporters.
ReplyDeleteLet me get this straight, you worked at Gannett for over 20 years but just started watching it closely IN 2006??????
ReplyDelete@11:47 p.m.: Poor phrasing on my part: that was a reference to when I started blogging about Gannett, although I did't make public any of my posts until September 2007.
ReplyDelete