Apple's Weak Board
For a company of its size and prominence in the global business and tech world, Apple Inc. (NASDAQ: AAPL) does not have much of a board of directors, in terms of their backgrounds and likely ability to steer the company through a difficult period and calls for it to part with its cash hoard.
Apple's most famous director is Al Gore, a former vice president and current environmental advocate. Like all the directors, he was added to the board by Steve Jobs. The notion that board members are independently elected was never the case with such a powerful chief executive. Gore has no qualifications to serve on the Apple board.
Another board member who has no place with Apple, particularly because of her great failure as a CEO, is Andrea Jung. She was thrown out of Avon Products Inc. (NYSE: AVP) after years of poor results and scandals that hurt Avon's reputation.
Yet another board member whose background makes him an unlikely director is Bill Campbell, the chairman of tax software company Intuit Inc. (NASDAQ: INTU). Although Intuit's share price has done relatively well, its annual revenue is barely above $4 billion. Campbell oversees what is hardly a large tech or consumer firm, and one that has little to show for any revolutionary innovation.
Millard Drexler is also on Apple's board. He runs the small clothing retailer J. Crew, after he was fired from his job as CEO of Gap Inc. (NYSE: GPS) in 2002. Neither is much of a recommendation for his presence on the board.
That leaves three members of Apple's. One is Walt Disney Co. (NYSE: DIS) chief Robert Iger. He is on the board because of Jobs's relationship with Disney. However, Iger has the credentials to be on the board on his own. Ronald D. Sugar, the former head of Northrup Grumman (NYSE: NOC) belongs on the board because of his successful management of a huge corporation. He has the background to chair, as he does, Apple's audit and financial committee. Finally, Arthur D. Levinson is the chairman of Apple's board, and a man who had an impressive career as former chief of Genentech.
All in all, Apple has three strong board members, but they are outnumbered by weak ones. That is a shame, given the company's ability to have done better. Jobs added these people and did the firm a disservice, given the kind of governance it needs during its recent set of crises.
Filed under: 24/7 Wall St. Wire, Corporate Governance Tagged: AAPL, AVP, DIS, featured, GPS, INTU, NOC