Board of Directors

  • 01 Jun 2007 at 8:58 AM
  • Bancroft

Dow Jones Is For Sale, Insider Says

The Bancroft family’s decision to meet with Rupert Murdoch means Dow Jones & Company is for sale, according to an employee of the company.
“If they meet, they sell,” said a Dow Jones employee familiar with the thinking of the Bancrofts.
Last night the family released a statement announcing their willingness to meet with News Corp, the media company run by Murdoch, while the board of directors of Dow Jones held a special meeting to discuss the bid. Earlier the family had rejected the $5 billion bid and refused to meet with Murdoch. During the meeting the statement was called “preliminary” but it was not changed after the meeting.
The reporting from the Wall Street Journal and the New York Times also conveyed the impression that the Bancrofts are ready to sell Dow Jones, which they control through their ownership of super-voting class b shares.
“Dow Jones & Co.’s 125-year history as an independent media company could be nearing an end,” the Wall Street Journal’s reporters wrote in the story that broke the news of the Bancroft family change of heart. DealBook, the deal blog of the New York Times, echoed that sentiment, asking “Is this the beginning of the end of an independent Dow Jones & Company?”
The Bancroft family’s statement also announced a willingness to consider offers from other bidders.

chairmanben.jpgWe have no doubt that a shareholder lawsuit is in the offing now that news has broken about the elevation on “Uncle” Ben—who presumably got his nickname from all his insider connections to the company on whose board he now sits as chairman. At the very least this calls out for an activist investor inspired proxy-fight.
From the New York Times:

Uncle Ben, who first appeared in ads in 1946, is being reborn as Ben, an accomplished businessman with an opulent office, a busy schedule, an extensive travel itinerary and a penchant for sharing what the company calls his “grains of wisdom” about rice and life. A crucial aspect of his biography remains the same, though: He has no last name.

No last name, huh? You want this guy running your company’s board? And are all those travel expenses really justified? We can’t wait to see this on Michelle Leder’s Footnoted.org.
Uncle Ben, Board Chairman [New York Times]

Who Put The Bee In Tom Perkins Bonnet?

tom_perkinsmemoir.jpgWhen we read the report in the San Jose Mercury News on Tuesday that venture capitalist and former Hewlett-Packard board member Tom Perkins was making pointed remarks about corporate governance—including some fierce jabs at former H-P board chair Pattie Dunn—we all thought: why bring this up now?
After all, Tom won this fight last year, right? Pattie lost her position at the head of the board table, then had to leave the board altogether. She became a “fallen” or “disgraced” “former corporate leader.” Her name became synonymous with corporate scandal, and especially pretexting. She was indicted by the California attorney general. She even got cancer. Isn’t it time to leave Pattie in peace? Even DealBreaker hadn’t picked on “Pattie Cakes” for months.
So why now? We thought maybe it was the book. Tom’s got his memoirs coming out soon. Maybe he wants the publicity. It sounds a bit cheap to drag a sick, unemployed and indicted woman’s shame back before the public just to sell a few more copies of a book. Especially when you are already rich enough to afford a $100 million yacht. Does Tom Perkins really need to worry about whether his book sells?
Today the Wall Street Journal‘s editorial page runs the full text of the speech that was reported earlier in the Mercury News. And there’s one line that might shed some light on why Tom is dragging out the whole H-P thing again instead of sailing around the South Pacific.

And so, when the “wet kiss” Cnet.com article about how great Mark Hurd was at strategy appeared, Ms. Fiorina and I agree that Ms. Dunn launched the now infamous “Kona” spying investigation aimed at ridding the board of those directors (the tech committee) most familiar with strategy, whom Pattie assumed were the “evil” leakers. All this is documented in a characteristically long-winded New Yorker article of Feb. 19.

That’s right! It was the New Yorker! And it’s long-windedness!
Of course, we have no idea what Tom’s talking about because, let’s face it, it was the New Yorker. That’s the magazine that’s read by people who want to appear brainy but don’t really want to be bothered with doing stuff like learning very much. But we’ll check it out and report back.
See how far we’ll go for you? We’ll even read the New Yorker!

The ‘Compliance’ Board
[Wall Street Journal]

jim clark quits.jpg
In perhaps the bluntest statement on Sarbanes-Oxley to date by a corporate insider, Shutterfly founder and (until yesterday) board chairman Jim Clark announced his resignation from the board of directors because Sarbanes-Oxley was taking all the fun out it.

As I understand it, Sarbox dictates that I not Chair any committee due to the size of my holdings, not be on the compensation committee because of the loan I once made to the company, not be on the governance committee, and it even dictates that some other board member must carry out the perfunctory duties of the Chairman. What’s left is liability and constraints on stock transactions, neither of which excite me.
It seems pretty clear to me that lawmakers have gone too far in considering a large shareholder to be inappropriate in the roles, but it is equally clear that I have no ability to change this in the near term. My only solution is to become an outsider. I wish to be treated as such effective immediately.

Jim Clark’s Resignation Letter [SEC]
Shutterfly chairman quits, attacks Sarbanes-Oxley
[Reuters]
Shutterfly Loses Chairman, Who Blames Sarbanes-Oxley [DealBook]

Rumsfeld Watch: Where Will Rummy Go Next?

donaldrumsfeldheadingtowallstreet.jpgLast week we asked you where you thought Donald Rumsfeld would head next. Nearly thirty percent of respondents said “Halliburton”—which is pretty disappointing since that seems the least likely of choices. You don’t really think Rumsfeld wants that kind of heat do you? Usually, we defer to our readers votes on these matters but this time we have to part company—Rummy’s almost certainly not heading to Halliburton.
So where is he going? Sunday’s Chicago Tribune runs through a host of possibilities: defense industry (too much “revolving door” heat), biotech (seems likely), some company in Chicago (Rummy’s totally hooked up in the Windy City) or one of the companies where his close friend Edward Brennan sits on the board.
But the article also raises the possibility that Rumsfeld might want to stay off the boards of any public company. In the era of Sarbanes-Oxley, it might just not be worth it to take the scrutiny that comes with serving as a director. Try to resist the temptation to say that “a feature, not a bug” of SOX.
Work shouldn’t be hard to find for Rumsfeld [Chicago Tribune]

dimonandharrison.jpgJamie Dimon can cross one line off the legendary list of “people who owe me stuff” that he reportedly keeps in his breast pocket. Back in 2004, when William Harrison was negotiating with Dimon to acquire Bank One, which Dimon then ran, Harrison reportedly promised to step down as chairman in 2006 and hand the spot over to Dimon. As we noted just moments ago, this morning news broke that Harrison will retire at the end of the year and is expected to be succeeded by Dimon.
It’s mostly a formality at this point. The board of JP Morgan is packed with Dimon’s allies, and the lieutenants of Dimon are already running the place, according to most reports. But the news that Harrison will retire confirms the consolidation of the levers of power at the bank under a senior management largely brought in from the outside following the acquisition of Bank One by JP Morgan. Many of these folks came with Dimon from Bank One or worked with him when he was at Citigroup.
Or, as a source inside JP Morgan put it in a phone call with us this morning, “Finally, the greasers beat the socs! Ponyboy would be proud.”

Cloak and Dagger Board Room

Dunnpics.jpgPaul Kedrosky is in “flood the zone” mode on the Hewlett Packard spying revelations today, and his latest echoes what we said this morning.

This is less about board confidentiality than about executives’ board control: And what better way to control your board than the constant Kafka-esque threat of a possible investigation hanging over your head?

Secretly hiring private spooks to spy on board members is probably a good way to possibly bring the board members under your control by using the information you gather—but it is not a good way to build good will among the people who are supposed to be overseeing the company and representing the interests of shareholders.
HP: Confidentiality vs. Control [Infectious Greed]

Intrigue at HP

Dunnpics.jpgWe touched on this story in the Opening Bell this morning but it deserves even more attention. We’ve never heard of anything like it—a board chair ordering spies to monitor the phone calls of her company’s directors. Imagine for a moment if HP chair Patricia Dunn had asked you whether she should undertake this activity. How hard would it be for you not to use the phrase “batshit insane” to describe her plan?
But this is more than evidence of a total lack of judgment. It’s downright dangerous for a chair to direct espionage against independent directors. It risks completely undermining the independence of directors. Spying on someone is the first step in controlling them.