Stanley Gold Says Competence An Issue For Directors
5/03/04 4:43pm
By Neal Lipschutz
Of DOW JONES NEWSWIRES
FORT WORTH, Texas (Dow Jones)--For Stanley Gold, simple competence is a major issue for U.S. boards of directors.
"You would be shocked at the quality of directors," said Gold, who helped lead the attempt to oust Michael Eisner as the chief executive of Walt Disney Co. ( DIS). Gold maintained that a majority of directors on boards on which he served "cannot understand the financial documents management gives them."
Gold heads Shamrock Holdings Inc., owned by the Roy E. Disney family. A campaign by Gold and Roy E. Disney to have shareholders "withhold" votes from Eisner and others to serve on the Disney company board may turn out to be a key development in the movement to give shareholders more say in corporate affairs.
The issue of competence leads Gold's broad agenda to improve boards of directors. He said boards now consist of an "old boys' network with a couple of old girls thrown in" for political correctness. He made his remarks at the annual meeting of the Society of American Business Editors and Writers here.
"If doctors, lawyers and taxi drivers need licenses certifying their competency, then directors certainly do, too," Gold said. He advocated " proficiency tests" before people can serve on boards.
In addition, Gold urged continuing education for directors, the ability of some holders to call special meetings and a tax structure favoring long-term shareholders.
Gold also wants independent directors to meet with shareholders, operational employees and customers to better understand the companies on whose boards they serve.
More controversially, Gold said boards should feature a "couple of public directors." Such directors would take a broader view of a company's role. "This would bring a much-needed extra dimension to the boardroom in terms of the greater social purpose of a company," Gold said.
Despite his suggestions, Gold sees the limits of rules. "Changes in legislation and rules that coerce boards to act responsibly will only encourage the less responsible to find loopholes," he said.
He called "nonsense" recent calls for famed investor Warren Buffett to step off the Coca-Cola Co. (KO) board because of alleged conflicts that compromised his status as an independent director.
Praising Buffett, Gold said: "Once you define everything by rules and formulas you exclude good people."
Gold said he would welcome any Securites and Exchange Commission action that would allow under limited conditions large shareholders to nominate directors on company sponsored proxy materials. But he fears hurdles to such actions will be set too high in any final action by the SEC.
Gold said the Roy E. Disney family owns 30 million Disney company shares.
5/03/04 4:43pm
By Neal Lipschutz
Of DOW JONES NEWSWIRES
FORT WORTH, Texas (Dow Jones)--For Stanley Gold, simple competence is a major issue for U.S. boards of directors.
"You would be shocked at the quality of directors," said Gold, who helped lead the attempt to oust Michael Eisner as the chief executive of Walt Disney Co. ( DIS). Gold maintained that a majority of directors on boards on which he served "cannot understand the financial documents management gives them."
Gold heads Shamrock Holdings Inc., owned by the Roy E. Disney family. A campaign by Gold and Roy E. Disney to have shareholders "withhold" votes from Eisner and others to serve on the Disney company board may turn out to be a key development in the movement to give shareholders more say in corporate affairs.
The issue of competence leads Gold's broad agenda to improve boards of directors. He said boards now consist of an "old boys' network with a couple of old girls thrown in" for political correctness. He made his remarks at the annual meeting of the Society of American Business Editors and Writers here.
"If doctors, lawyers and taxi drivers need licenses certifying their competency, then directors certainly do, too," Gold said. He advocated " proficiency tests" before people can serve on boards.
In addition, Gold urged continuing education for directors, the ability of some holders to call special meetings and a tax structure favoring long-term shareholders.
Gold also wants independent directors to meet with shareholders, operational employees and customers to better understand the companies on whose boards they serve.
More controversially, Gold said boards should feature a "couple of public directors." Such directors would take a broader view of a company's role. "This would bring a much-needed extra dimension to the boardroom in terms of the greater social purpose of a company," Gold said.
Despite his suggestions, Gold sees the limits of rules. "Changes in legislation and rules that coerce boards to act responsibly will only encourage the less responsible to find loopholes," he said.
He called "nonsense" recent calls for famed investor Warren Buffett to step off the Coca-Cola Co. (KO) board because of alleged conflicts that compromised his status as an independent director.
Praising Buffett, Gold said: "Once you define everything by rules and formulas you exclude good people."
Gold said he would welcome any Securites and Exchange Commission action that would allow under limited conditions large shareholders to nominate directors on company sponsored proxy materials. But he fears hurdles to such actions will be set too high in any final action by the SEC.
Gold said the Roy E. Disney family owns 30 million Disney company shares.