Shortly before Christmas last year three directors resigned from the board of Eastman Kodak Co., all in one week. Hmmm. Kodak's financial problems were well disclosed by that time, but to see three board members head for the exit raised questions in my mind about whether this was a bankruptcy “tell.” (Yes, as things turned out.) And thus was born the idea for this edition's cover story on “When to Resign from a Board.”
Whether to resign in advance of a bankruptcy filing (see page 23) turned out to be one major component of our examination of board resignation best practices. Gerald Czarnecki keynotes this special focus with a well-delineated list of top reasons to bid adieu to a company board (page 17). Charles Thayer offers some sound thinking on not “kicking the can” about the decision to resign, both by the individual himself or herself and by one's fellow board members (page 18). We then turn to legal colleagues for specialized counsel on disclosure obligations (page 21) and on the wisdom of a preemptive move in advance of an IPO filing (page 25) as well as the aforementioned bankruptcy declaration. As Gerry Czarnecki notes, resigning from a board “is as important and difficult a decision as the one we make when we join.” Indeed, and this package of briefings is a worthy resource to help guide you through that decision should it arise.
As this edition was in development over the late summer and fall months, there was a lot of ink being spilled in the media on the tenure of Ford's Alan Mulally, specifically on whether the superstar CEO was wrapping up his time at the
automaker. “Ford Refutes Talk of Mulally Exit,” headlined one such article in the
Financial Times in November. The accounts all struck me as press-generated kerfuffle, but it sure provides a timely backdrop for our article on “How the Ford Board Recruited Alan Mulally” (page 31). Not only is this a “for the records” case study on how the board members marshaled their talents and determination to get the best possible new leader, but it also offers important lessons to other boards in executing a CEO hire. It was good to work with a longtime colleague, Dennis Carey, in publishing his co-authored account of this CEO search that will certainly go down in the record books as one of the most decisive recruitments ever made by a board of directors.
Another longtime colleague that I take great pleasure in welcoming back into our pages is Gary Sutton. Gary was a columnist for six years (from 2004-2010), during which time he enlivened our pages with his singular voice. He could always be counted on to comment with refreshing frankness on life in the boardroom, where he would be the first to admit that he was witness to a lot of non-best practices. I could not think of a better expert to turn to for tying the ribbon on our package of advisories on resigning from the board (page 72). But there is a lot more in the pages ahead before you get to Gary's endnote. Enjoy.