After enduring some rough headlines in recent weeks, General Electric announced its slate of director candidates for its 2018 annual meeting of shareholders, including three new faces and board slimmed down from 18 to 12 members.
The move makes good on a promise from GE chairman and CEO John Flannery to trim the board’s size, and illustrates that widespread changes are afoot for the company.
“John Flannery wants to call his own shots and one of the best ways a recently appointed chief executive can do that is to change out the board,” professor of leadership at Arizona State University’s Thunderbird School of Global Management Jeff Cunningham told Corporate Board Member. “The downside of making such a precipitous move is that the very board that appointed you is now thinking, ‘what, me?’”
“There are no good times to part ways with directors, and Flannery is making some adroit moves.” – Jeffrey Cunningham
The three new candidates are H. Lawrence Culp, Jr., former president and CEO of Danaher Corporation, Thomas W. Horton, former chairman and CEO of American Airlines and Leslie F. Seidman, former chairman of the Financial Accounting Standards Board (FASB). Directors Marijn Dekkers, Susan Hockfield, Peter Henry, Andrea Jung, Steve Mollenkopf, Shelly Lazarus, Jim Rohr and Mary Schapiro decided not to stand for reelection.
“There are no good times to part ways with directors, and Flannery is making some adroit moves, sliding old bark if not dead wood over, like Andrea Jung and Rochelle Lazarus, both of whom reigned during a different era than we face today,” Cunningham says. “In bringing on Lawrence Culp and Thomas Horton, he attracts the kind of big league thinkers a GE CEO will be able to draw upon for advice, and more importantly, be able to relate to. He is also throwing a bone to the compliance side by bringing on Leslie Seidman, former chair of the Financial Accounting Standards Board, and a woman, which makes a total of three females on the board.”
According to GE, the move was a collaborative effort by the board that was focused on superior performance and maximizing the long-term value GE for its shareholders.
“The reconstitution of our Board was a constructive and collaborative exercise that demonstrated the quality and integrity of all our directors,” GE lead director Jack Brennan said in a statement. “It was a comprehensive evaluation that everyone undertook with one goal in mind – to build the very best board for GE and its shareowners.”
But it’s clear that Flannery had a large hand in the shake-up.