After seven tumultuous years for Gannett,
Arthur Harper is leaving
the 10-member board of directors, effective with the annual shareholders’ meeting in May.
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| Harper |
Corporate quietly disclosed his planned retirement last month, without giving a reason or saying whether he will be replaced. Harper, who is African-American, may well be Gannett's lone minority director at a time when corporate boards everywhere are pressed to diversify even more.
In a departure from recent practice, Corporate didn’t announce his retirement with a formal press release, as it did for
Donna Shalala and
Karen Hastie Williams, long-time directors who retired two years ago.
Instead, it reported Harper’s departure solely through a more under-the-radar
8-K filing on Feb. 26 to the U.S. Securities and Exchange Commission. Word for word, it says:
“On February 25, 2013, Arthur H. Harper informed the Board of Directors of Gannett Co., Inc. (the “Company”) that he plans to retire from the Company's Board of Directors at the end of his current term and will not stand for re-election at the Company's 2013 Annual Meeting. Mr. Harper has served as a Gannett director since March 2006 and we are grateful for his dedication to Gannett and its shareholders.”
I can only remember one other time when Corporate disclosed the departure of a senior officer in an 8-K, without an accompanying press release.
That was in 2010, when Chief Digital Officer Chris Saridakis quit the company, frustrated with top management. It was not a happy parting.
Why his exit matters
The departure of any director is significant, because the board governs the entire company and its 31,000 employees. Directors hire the CEO and review the appointments of other executives, including the chief financial officer. They sign off on the strategic plan, and major decisions such the stock dividend policy.
They serve one-year terms and run for re-election at the spring annual meeting. Directors are paid an annual retainer plus other fees that generally bring their compensation into the lower six figures. Last year, Harper got $123,521 -- not especially high for a corporate director nationwide. (
Table shows fees paid last year to all directors.)
Gannett provided many more details when Shalala and Williams retired in spring 2011. Shalala was 70, the mandatory retirement age, Corporate
said in a press release at the time, and Williams, then 66, planned to “devote more time to her personal and other professional interests."
Harper, 57, is managing partner of
GenNx360 Capital Partners, a private equity firm focused on business-to-business companies. Previously, he was president and CEO of General Electric’s Equipment Services division from 2001 to 2005.
He also is
on the board of agricultural products giant Monsanto, where he was
re-elected to another term on Jan. 31, indicating he's not leaving Corporate America entirely.
Cody elected immediately
The 8-K doesn’t say whether Harper's being replaced. In the Shalala and Williams press release, Corporate simultaneously announced
John Cody had been elected to fill one of their seats. By that fall 2011, there would be two more new directors:
Susan Ness and
Gracia Martore, elected after she was promoted to CEO when
Craig Dubow retired as chief executive and board chairman.
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| Williams |
Williams is African-American. With her retirement, Harper looks like Gannett’s sole minority director. I’m basing that on
the photographs accompanying the current directors’ bios -- a method that’s not foolproof. GCI doesn’t disclose the racial or ethnic background of individual directors.
There will be pressure inside and outside to replace Harper with another minority member, possibly before the May 7 annual meeting, amid fierce competition for qualified candidates.
For years, Corporate has
made employment diversity a top goal -- including in the make-up of the board, where the Nominating and Public Responsibility Committee is responsible for finding new directors. Indeed,
last week’s new proxy report to shareholders says Gannett’s charter “encourages the committee to work to maintain a board that reflects the diversity of the communities we serve.”
Harper, in addition to serving on the executive compensation committee, is chair of the Nominating and Public Responsibility Committee.
Boards mostly white
Across Corporate America, the average board has nine members, and they're overwhelmingly white. Last year, about 28% of boards of public companies had one racially or ethnically diverse director, according to a survey by the
National Association of Corporate Directors. And only 13% had two.
Director searches are clubby affairs, the NACD said in a report last fall, relying on personal networking and word of mouth: "This strategy of recruiting within networks, while protecting the board from exposure to unfamiliar and seemingly riskier directors, has led to the unintentional exclusion of many viable director candidates. In short, corporate boards have failed to change with the times."
A review of Gannett’s directors going back to 1998 shows there have always been at least two minority board members. In several years, there were three, including in 2003, when there were only nine members overall.
Amid competition for candidates, some minority directors are stretched thin. At one point, Williams -- a GCI director since 1997 -- simultaneously sat on four other boards: Chubb Corp., Continental Airlines, SunTrust Banks, and WGL Holdings, the parent company of Washington Gas Light Co.
As Gannett's board has grown less diverse in recent years, so too has top management. Consider
the 12 members of the Leadership Team led by Martore.
Home addresses revealed
Harper is leaving just as Gannett regains financial footing. But he’s also leaving after the directors received unusual and worrisome public scrutiny.
In early January, nearly two months before Harper’s retirement was disclosed, a website favoring gun ownership published what it claimed were the home addresses of all the board members, including Harper and Martore. The information was soon repeated on other websites -- all in retaliation for
The Journal News’
publishing the names and addresses of handgun permit holders in Westchester and Rockland counties in suburban New York City.
The newspaper's handgun permit database, published online in December, ignited a national debate on press freedom and privacy rights.
But it came at a cost. Amid threats to employees' safety, the paper hired armed guards to protect the homes of its publisher and others. One month later, still facing withering criticism,
the paper removed the database from its site.