Reuters reports that GM Board of Directors member Percy Barnevik resigned his position today “for personal reasons.” Barnevik is one of GM’s longest serving BOD members; he’s watched the epic erosion of shareholder value and the breathtaking destruction of the automaker’s assets, market share and credibility. And yet, on his way out the door, Barnevik gave GM CEO Rick Wagoner and his team an unqualified thumbs-up. “I remain a strong supporter of management and the Board of GM, and of the direction the company is taking.” This from the ex-ABB CEO who had to repay half of an undisclosed $78m (i.e. hidden) severance package, part of an enormous book cooking scandal (called “Europe’s Enron”). The same company (that Barnevik founded) which was deeply embroiled in a global bribery scandal, eventually paying out $16.4m to the Justice Department to settle their criminal investigation. With Board members with this kind of background, who needs enemies?
Remains “Strong Supporter of Management”
It would seem the Director of the Board of Directors is one not at all misguided.
I wonder who will replace him or if he will be replaced?
These guys are not stupid and they have their own game. They just don’t care what happens to GM.
Regarding that picture — did I see that guy in a James Bond movie, holding a cat on his lap?
A disgraced or near-useless board member hanging onto his/her job until the end? What an oddity in this day’n’age! This guy must be the exception.
Like all good Captains Of Industry, you can assured the rest will go down with the ship. (Or maybe not…)
Percy? Seriously? Nothing else needs to be said.
And yet, on his way out the door, Barnevik gave GM CEO Rick Wagoner and his team an unqualified thumbs-up.
I’ll bet dollars to doughnuts on where his thumb has been all these years as a BOD member.
What did you expect him to say? “I was wrong, sue me”
The board of directors in today’s big American corporations do nearly nothing to help or guide their companies. They merely rubberstamp management’s decisions. Their only real role is to hire a new CEO when needed.
In many cases, the way management kisses up to board members is sickening. Remember when Chevron named an oil supertanker after Condoleezza Rice? The brown-nosing goes both ways, as can be seen by Percy Barnevik’s comments about GM’s management — who have been a failure by any measure.
Even so, directors can be liable for mismanagement that occurs in their companies. With the Sarbanes-Oxley Act beefing up penalties, it has been harder to find people willing to serve. Making board members even less helpful.
I prefer the Japanese practice of executive board members. In recent years, pressure has been on the Japanese to bring outside directors onto their boards, and make them more like the American model. I cannot see any benefit to that.
Robert,
I wouldn’t call your characterization of Barnevik terribly well balanced. He was one of the top business leaders of his generation in Europe, and created billions of euros in value for shareholders by developing an advanced, decentralized managment team at ABB.
That doesn’t excuse his passive behavior in allowing Wagoner et al to drive GM into the ground.
ShebornSean:
Balanced? Barnevik was disgraced when his hand was caught in the cookie jar, stuffing his face with nearly a hundred million dollars, back when a hundred million dollars was a lot of money.
ABB was also thrown into disrepute. Check out the links. Barnevik created a company with a culture of unbridled personal greed, without any inhibiting accountability.
Sound familiar? And THEN we can talk about letting GM nosedive.
That Percy and the others have been a failure on an epic scale is well documented.
That Percy and the others are solidly entrenched in their pay packages is also well documented.
That Percy and the others are Guilty! Guilty! Guilty!, as Charles Manson points out, of supreme arrogance.
That Percy and the others will not let anybody, not even a multi-billionaire owning the largest chunk of stock tell them what to do is on record.
So, let’s raffle off the date Red Ink Rick demands the money then tells The Chosen One to shove any and all requirements attached to it. General Motors is run as a cash cow for executive salaries and Rick will be damned if that is going to change.
The board of Aeronautical engineers at GM so named because they all take up space in the boardroom. They are the ones that the old adage was coined: some people make things happen, some people watch things happen, and some people wonder what happened.
It looks like Percy is well qualified to give Rick the thumbs up on his abilities as a leader. Percy is likely also on some sort of medication, I’m betting he has been sharing them with Rick for quite a while now.
Yes, yes. And why would these greedy bastards not do what they’ve done? They’ve profited handsomely too. So who got hurt? The dealers are being wiped out, tens of thousands of employees have been canned with or without some compensation, but they had no choice after they were well in and things were well down the slope. Those who did have a choice and watched as it happened were the stock holders. Where the hell were they? Surely any sensible individual stock holders are long gone. Of the institutional holders Dodge & Cox has 53,349,672 shares, and they’re not just late comers. Can this be ignorance or poor judgment? I just don’t see how anybody can be this stupid. There must be some nefarious shenanigans going on here, but I don’t understand it.
“I remain a strong supporter of management and the Board of GM, and of the direction the company is taking.”
That reminds me of the Stephen Colbert quote…
“We aren’t rearranging the deck chairs on the Titanic! Heck no, we are taking off and we are soaring high… We are rearranging the deck chairs on the Hindenburg!”
”I remain a strong supporter of management and the Board of GM, and of the direction the company is taking tanking.”
Couple of quick points.
A better analogy for what happened at ABB than Enron is Tyco. Remember when the CEO of that company treated it as his own personal piggy bank rather than the property of shareholders?? However, and this is worth noting, I don’t think anything Percy Barnevik ever did was illegal, just embarassing.
Second, Percy Barnevik did not “found” ABB. The initials stand for two companies that were merged to create it: ASEA and Brown & Boveri (the former being Swedish the latter being Swiss). He certainly played an important role in the merger that created ABB and emerged as the firm’s first boss. However at the end of the day he has always had to answer to even more powerful people. Those people being the Wallenberg family. At one point Barnevik even served as chairman of Investor, the central holding company in the Wallenberg corporate empire.
Hence the relationship to Detroit… It was Investor that sold Saab to GM. Given what GM paid the Swedes to take control of Saab, why wouldn’t Barnevik be happy with the performance of the firm’s management over the years?
Does anyone know what compensation the GM directors get?
In the Silicon Valley companies I work with, directors usually get stock options, and that’s it. Since they only spend one day every two to three months on company business, for a company that does well they get a lot of compensation indeed.
But I understand that companies like GM pay their directors fees as well as stock. And that directors are expected to buy stock with at least part of their fees. Anyone know about GM?
Also, in looking in vain for information on compensation, I had to laugh when I saw on GM’s website a statement by the GM board about what it sees as its responsibilities. None of these have been met. The statement is reproduced below for your amusement:
“The General Motors Board of Directors represents the owners’ interest in perpetuating a successful business, including optimizing long-term financial returns. The Board is responsible for determining that the Corporation is managed in such a way to ensure this result while adhering to the laws of the jurisdictions within which it operates and observing high ethical standards. This is an active, not a passive, responsibility.
“The Board has the responsibility to ensure that in good times, as well as difficult ones, management is capably executing its responsibilities. The Board’s responsibility is to regularly monitor the effectiveness of management policies and decisions including the execution of its strategies.
“In addition to fulfilling its obligations for increased stockholder value, the Board has responsibility to GM’s customers, employees, suppliers and to the communities where it operates — all of whom are essential to a successful business. All of these responsibilities, however, are founded upon the successful perpetuation of the business.”
The General Motors Board of Directors
Percy N. Barnevik
Retired Chairman,
AstraZeneca PLC
Director since 1996
Erskine B. Bowles
President,
The University of North Carolina
Director since 2005
John H. Bryan
Retired Chairman and Chief Executive Officer,
Sara Lee Corporation
Director since 1993
Armando M. Codina
President and Chief Executive Officer,
Flagler Development Group
Director since 2002
Erroll B. Davis, Jr.
Chancellor,
University System of Georgia
Director since 2007
George M.C. Fisher
Retired Chairman and Chief Executive Officer,
Eastman Kodak Company
Director since 1996
E. Neville Isdell
Chairman and Chief Executive Officer,
The Coca-Cola Company
Director since 2008
Karen Katen
Chairman,
Pfizer Foundation,
Retired Vice Chairman,
Pfizer Inc and Retired President,
Pfizer Human Health,
Director since 1997
Kent Kresa
Chairman Emeritus,
Northrop Grumman Corporation
Director since 2003
Ellen J. Kullman
Executive Vice President,
DuPont,
E.I. du Pont de Nemours and Company
Director since 2004
Philip A. Laskawy
Retired Chairman and Chief Executive Officer,
Ernst & Young
Director since 2003
Kathryn V. Marinello
Chairman and Chief Executive Officer,
Ceridian Corporation
Director since 2007
Eckhard Pfeiffer
Retired President and Chief Executive Officer,
Compaq Computer Corporation
Director since 1996
G. Richard Wagoner, Jr.
Chairman & Chief Executive Officer,
General Motors Corporation
Director since 1998
Now that Barnevik has some free time available he and Kwame Kilpatrick could open up a consulting firm in Washingtoon…
My impression of Barnevik is that he is a pretty good leader. As good as it gets, actually. And this compensation was based on the fact that he was almost headhunted to lead GM or GE or something similarily substantial back in the days. The scandal was about the actually at that time unheard of compensation of about 100 million dollars. That was unprecedented in Sweden, nothing before had ever come close. At the end, it was about how much ABB valued their leader. He sacrificed an international career for ABB and an enormous pile of cash.
If he is leaving the sinking ship, it is because he considers it a smart move. And if there are any more smart fellas in the BOD, others will follow. It’s the rats leaving before the big going down…
Not a motorhead in the group. It sounds like a multi-cultural love in. You have ladies and southern gentlemen. People from academia, pill pushers, bakers and bean counters plus international flavor. What a mulligan’s stew when you blend all of this. How, would they even know when they are being conned by the execs who run the company? But we know, that is why they are there. When you are unknowledgeable in such an environment, and you ask the first dumb question at your first meeting, I guarenttee, you won’d ask another. So to sum up, we have a bunch of failed execs leading a clueless board into????
oboylepr:
I wonder who will replace him or if he will be replaced?
Fozzy Bear would be good. They have a similar look…
http://muppet.wikia.com/wiki/Image:Fozzie_Season_1.JPG