Friday, April 11, 2003

The revolution begins Tenet Healthcare Corporation's CEO this week became the first head of an S&P 500 company to not also hold a position on his company's board of directors. It was not an altruistic move. Jeffrey Barbakow resigned from the board under pressure from Tenet's shareholders, according to a story in the Dallas Morning News (intrusive registration required). It's a small victory for investors and it doesn't signal a trend. But it's a start. ...experts say [that] outside of companies that have faced scandal, there's no widespread trend toward radical corporate governance improvements. Instead, many executives and boards are waiting to see how stringently the reforms of the Sarbanes-Oxley Act will be enforced before they take action. Proof that, as we've stated here many times, companies will comply only to the extent they are forced to do so. Separating CEO and chairman of the board roles has become a focal point of recent corporate reform efforts. Without such separation, boards become little more than a rubber stamp for the self-enriching moves of egomaniacal CEOs. While experts agree the CEO and chairman positions should be divided, not all agree it will be easy to do so. According to Wayne Shaw, a corporate governance expert at Southern Methodist University: I find it incredibly hard to believe that CEOs are going to come out and accept a board with sufficient independence. It flies in the face of reality. You've got these dynamic leaders running these companies and now you're going to have somebody tell them what their salaries are going to be?" Well, yes. Someone must. We've seen the results of letting CEOs (or their factotums) determine their own compensation. 9:24:35 AM    Oh yeah? []