2 Good Omens for America from This CEO Move

Updated

WellPoint (NYS: WLP) CEO Angela Braly resigned on Tuesday. And there's good news for the entire nation as a result.

I'm not attempting to be melodramatic. I'm not exaggerating to grab attention or to make a point. There really are good omens for the U.S. to be found in the circumstances of Braly's departure. Let's look at a couple of them.

Investors' voices are being heard
Rewind the clock to late July. WellPoint had cut its profit forecast for the remainder of the year. Second quarter earnings missed analyst estimates. Shares plummeted the most in one day since 2008. Heavy criticism of Braly resulted in lead director Jacquelyn Ward e-mailing a statement on behalf of the board saying that they were "supportive of the strategy and our management team."


Just a few weeks later, though, Angela Braly resigned. What happened in the meantime? Investors spoke up.

According to the Wall Street Journal, members of the board had been meeting with several major investors, who expressed serious concerns about the company's strategy and Braly's leadership. The uproar reached a point to where the board and Braly came to a "mutual understanding" that it was best that she leave.

What I take heart from in these events is that investors' voices are being heard in the board rooms of corporate America. Yes, this is only one instance, but it's a powerful example. And it's a good thing, too, not just for WellPoint shareholders, but for investors of all companies.

Directors of publicly traded companies must keep the owners' interests at the forefront of their deliberations. The WellPoint situation emphatically reminds us that boards aren't there to cheerlead or coddle. They're in place to represent their bosses - the shareholder owners of the company.

We can empathize with the board's support for Braly. They worked closely with her; they liked and respected her. All of that is good and admirable. However, their foremost responsibility was, and is, to do the right thing for shareholders.

Whether you supported Braly as CEO or not, you, and all investors, should be encouraged that the will of the shareholders in this case was not only heard, but also acted upon.

Women are succeeding and failing on their own merits
For years, women in the business world continually bumped against the glass ceiling that prevented them from rising to the top. In some companies, unfortunately, these barriers remain.

However, over the past two years, we have seen several female executives assume the helm of major corporations. Virgina Rometty became the first female CEO at IBM (NYS: IBM) . More recently, Yahoo (NAS: YHOO) hired Marissa Mayer as its CEO. These are just two examples.

But several women who led companies were ousted during the same period. Yahoo fired Carol Bartz, Andrea Jung was pushed out at Avon Products (NYSE: AVP, and now, Angela Braly at WellPoint has joined the club.

She was pushed out, not because she was a woman, but because her results weren't enough. Investors likely compared the results of WellPoint against rivals such as UnitedHealth (NYSE: UNH,) and rightly concluded that things should be better.

Stocks for the two companies correlated pretty well over the past few years until the middle of 2011. That's when UnitedHealth's shares diverged upward, and WellPoint's stock languished. The difference in results is directly attributable to the difference in leadership.

I'm not celebrating that Braley, or any of the other female executives, lost their jobs, by any means. What I am glad to see, though, is that women are succeeding -- and failing -- on their own merits. That is as it should be.

Admittedly, my perspective is that of a man. However, I'm also a father of daughters. I want them to have the opportunity to work hard and achieve success. But I don't want them to ever be viewed as tokens in a game of gender equality. An essential component of preventing this tokenism is that they be fairly judged by their results.

Underlying principle
The underlying principle in both of these good omens is accountability. It's encouraging to see directors understand that they are primarily accountable to the owners of the company -- the shareholders. It's encouraging to see investors demand accountability from management. It's encouraging to see accountability apply, regardless of who's involved.

More accountability in our communities, in businesses, and in our government, is needed. Thank you to those WellPoint investors who spoke up, for showing us that the principle of accountability is alive and well in America.

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The article 2 Good Omens for America from This CEO Move originally appeared on Fool.com.

Fool contributorKeith Speightsowns no shares in the stocks mentioned above.The Motley Fool owns shares of International Business Machines and WellPoint.Motley Fool newsletter serviceshave recommended buying shares of WellPoint and UnitedHealth Group.Motley Fool newsletter serviceshave also recommended creating a diagonal call position in UnitedHealth Group and a synthetic long position in International Business Machines. The Motley Fool has a policy. WeFools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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