Wednesday, March 27, 2013

As director Harper exits, a less diverse board

After seven tumultuous years for Gannett, Arthur Harper is leaving the 10-member board of directors, effective with the annual shareholders’ meeting in May.

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.

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 Newspublishing 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.


  1. Is this another case of do what we say (on diversity) -- not as we do?

    1. Is this another case where you have no idea what you're talking about, so you fish for a conclusion? Signs point to yes.

  2. If they're not part of the Scarborough groups that our advertisers have indicated they wanted, we ignore them. Why should it be any different at the top?

    We've given up any semblance of being a community service or doing good - why in the world should we reflect a community that we don't give a shit about anyway?

    1. 6:57 speak for yourself. I read all of the Greater Good entries. There is a ton of great community work being done by hundreds if not thousands of our coworkers. You are WRONG. You are just a bitter soul who probably never have to the United Way even in the good times. Why help neighbors in need when you can whine about life?

    2. Suck up to Gracia and Mims B much, 8:47pm?

    3. 8:57 thanks for proving my point

  3. A little intellectual and ideological diversity would be a heluva lot more valuable.

    1. We’ll never achieve a post-racial society given how too many like Jim “cover” news events like this one and that’s truly unfortunate.

      Frankly, 1:09 is spot on as diversity of thought, of ideas and a record of successful experience should be the deciding factor far more than one’s gender, sexual orientation, ethnicity and/or the color of one’s skin.

      The sooner all can move past discussions like that which Jim’s writings fans, the sooner we’ll arrive where even King wanted this nation to be.

  4. Seems to me, Jim, that "your" first comment to your own blog post, which just so happened to be the "first comment" to your own blog post, should have been the conclusion of your blogpost.

    You had me going until you changed gears at the end with the address thing. Make up your mind. Please. If you think Harper is leaving as a result of his address being published just say so and stick with that premise. Or if you think Gannett wants a white-only board, say that.

    Isn't the whole point of writing a blog to provide your opinion? I didn't see an opinion from you until you added your comment - to your own, opinion-less blog.

    1. I do not think Gannett deliberately wants a white-only board, and I never said that. I merely pointed out that when Harper leaves, the board will apparently have no minority members.

      As for my mentioning the directors' addresses, I don't know for a fact that it played any role in Harper's retirement. But it's a detail that shows the downside of being a corporate director when -- almost literally -- a target has been painted on your back.

      (And an aside: What's with the quote marks in your "comment"? Are you "implying" something?)

    2. I never said you said Gannett wants an all-white board. I used it as an example to make my point, that being that you failed to make a point. That is, until you commented on your own blog post. And that is downright silly.

      (To your aside: I am implying that it is difficult to add emphasis in the comments section. Or I could be implying that you wanted another comment to your post so you started the ball rolling. Take you pick.)

    3. I understand.

      Frequent readers of this blog know that I often post the first comment, especially in the form of a question, to spark a discussion.

      Also, you can add emphasis to a word or phrase using standard HTML tags. For italics, it looks like the following:

      < i >Here's an example of italicized words within start and end tags.< / i >

      (Note: Those are lowercase "I's." Also, there should be no spaces inside those start and end tags; I've included them here only so you can see the coding here.)

    4. Nice dodge, Jim (and thank you for the lesson). You have yet to respond to my quite pointed comment.

      I would think the content of your blog post would be enough to spark conversation. If not perhaps you need to rethink your strategy.

  5. To truly understand what a CEO thinks about racial diversity, look at their own hiring behavior. Look at the diversity of the people that report directly to the CEO AND the people who report directly to the people that report to the CEO. At Gannett, non-white people in senior roles are, for the most part, no where to be found. Gender diversity, on the other hand, is alive and well in the senior ranks. They've got that covered like a blanket and then some. But, racial diversity is almost non-existent in senior roles across Gannett.

    And, to prove this point Jim, here's project for you to consider doing. I think you'll like it. Look at the press releases on this website from 2011, 2012 and 2013 to-date. Conduct an analysis of all the people Gannett hired and sent press releases to share the news. Typically, when people in really senior level positions are hired, a press release is released. Therefore, it's assumed that if you are important enough to get a press release sent about you, then you must be quite important to the company. Of course, there are senior people hired who may not get a press release, but using this 2.25 years of press releases is a nice enough sample size.

    After you've identified all of Gannett's "look who we've hired press releases," do a Google Images search for their photo. If you are at that level, there's a photo of you somewhere on the Internet that can be validated. To the best of your ability, document the race of each person in a spreadsheet. There may be a couple who are not obvious, but I think for the most part, their race will be very clear. For those that are not clear, just say so. Please share the spreadsheet with the blog. And, just for kicks, include the person's gender and let's see how that looks.

    Here's what I'm sure you'll find: Over the past 2.25 years, Gannett has hired in senior level positions a lot of white males and females and maybe one or two non-white males or females. It would be great to know exactly how many. And, based on that, you can draw some conclusions on how important gender and racial diversity is at Gannett.

    So, get to work Jim! I can't wait to see the outcome of your analysis. And feel free to go back farther than 2011 if you want.:-)

    For easy reference, here's link to the press release section of Gannett's website:

  6. Speaking of diversity, how is the mainstreaming of stories going? What are the current quotas?

  7. Since too many wrongly assign diversity to appearance, then few would object if Dr. Ben Carson were nominated right.

    And, why not as the fresh perspective he’d bring to this board, this industry and it’s “coverage” of local, national and world events is likely exactly what it needs to restore credibility and readership.

  8. "Diversity" in newsrooms has produced nothing of value. Editors, etc., tend to be bachelor's-level members of the middle/lower-middle class. How different is the personal "perspective" brought to the content of any newsroom on that basis? And hey, personal perspective isn't supposed to "color" our work in the first place — remember?

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Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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