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Old Sep 26, 2002, 09:35 PM   #1
arn
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Apple, Gap Among Magazine's Worst Boards

http://www.reuters.com/news_article....toryID=1503194

Apple Computer Inc. AAPL.O Chief Executive Steven Jobs not only has the dubious distinction of having his company's board named as one of the worst, but he is also a director of Gap Inc. GPS.N , another company that made the same list. The two companies are among eight listed in the Oct. 7 issue of BusinessWeek as having the worst boards of directors.
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Old Sep 26, 2002, 10:08 PM   #2
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personally i would like to see more of an explanation as to why Apple made the list. I mean, GAP had all sorts of issues, nearing bankruptcy etc. but apple? not sure who the board is but maybe it just the link of the Apple board and the GAP board via steve...
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Old Sep 26, 2002, 10:33 PM   #3
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If I were BusinessWeek, I would hate Apple. Analysts want Apple to become another high-volume, low-margin computer company. They don't understand why Apple sells these really expensive computers with really low gigahertzes. Apple ought to port to Intel - it would open up vast new revenue streams! And drop the iPod, as it is not in their core competency... etc.

So, keep up the good work, Jobs. (not sarcasm - he's doing a pretty good job, and I hope he's Apple's CEO until he's 80, because you just know Apple will go to **** again after he leaves.)

Alex
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Old Sep 26, 2002, 11:46 PM   #4
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What else can be said? It's Business Week. The poster above hit the nail on the head.

The sad thing is, we're smart enough to know how to sort out the garbage, but this will hurt Apple because just about every President of every company and organization gets that magazine, so they'll say "Oh! We better not switch to the Mac after all, they aren't looking too good!"

Last edited by dricci; Sep 27, 2002 at 12:07 AM.
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Old Sep 27, 2002, 12:28 PM   #5
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The article makes sense

Here are the reasons (along with my commentaries) why BusinessWeek chose Apple's board as one of the worst:
  • No stock ownership from CEO. Studies have shown again and again that the best way to align the interests of the managers with the shareholders is to give managers an ownership interest via stock (NOT stock options). Apple may be a special case since Steve Jobs has other motivations besides monetary compensation to make Apple a good company. Nonetheless, the criticism by BW is valid in the general sense: People who own something tends to treat it better.
  • The absence of Larry Ellison. Ellison was absent for more than 25% of the corporate board meetings for the last five years. Stockholders want to make sure that the directors act in their interest by being more engaged in corporate governance. Being absent for a quarter of the meetings is certainly a worrisome sign, although it would be interesting to see what meetings Ellison actually missed. The criticism of Ellison's lack of ownership is based on the same rationale as the criticism of Jobs.
  • Microwarehouse's seat on the compensation committee. The company accounts for almost 2.9% of Apple's sales in 2001, and the fact that Jerry York (MW's CEO) sits on the compensation committee is certainly a sign of potential conflict of interest. Here's a hypothetical scenario: Your biggest customer is also the person who determines how much you get paid. To increase his own sales, he might approach you and say: "Look, I want you to sell me those computers at a lower price than other customers. Otherwise . . ." Jerry York has an excellent track record as a corporate executive (his role as CFO of Chrysler and IBM has been the stuff of legends) and no one is accusing him of improprieties. However, the appearence of the conflict of interest does exist.
  • Interlocking directorship with The Gap. Another potential conflict of interest. Mickey Drexler, as an Apple director, could treat CEO Jobs favorably, while Jobs as The Gap director could do the same for CEO Drexler.
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Old Sep 27, 2002, 12:38 PM   #6
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This article makes sense, part II

If you have read my comments above (and the article), you will understand why BusinessWeek viewed Apple's board and corporate oversight unfavorably. While I would not go as far as saying that Apple's board is one of the "worst," BW is correct in pointing out some problems at the top of the company.

The fuction of a corporate board is to ensure that the interests of the shareholders are met, and that the managers of the company (CEO, CFO, etc.) are acting in a way that meets this goal. The absence of strong corporate oversight led to the Enron, WorldCom, and Tyco debacles among others.

We as Mac owners should not adopt some automatic, knee-jerk "us vs. everyone else" mentality when we hear such criticisms. Granted, some criticisms are way off the mark (like that "review" of the iMac on MSN ), but some are not. We should hope that valid and properly written articles will prod Apple to improve its form of corporate governance. After all, strong corporate governance will ensure that Apple will not only survive but prosper, which is what we as all Macusers want.
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Old Sep 27, 2002, 01:02 PM   #7
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FYI

Here are some of the boards cited by BW as ones that "Needs Work":
  • ADVANCED MICRO DEVICES: "Board gets high marks for independence and quality, including audit committee that met nine times in 2001. But five directors need a bigger equity stake. No outside director is CEO of a company of comparable size."
  • MICROSOFT: "With no nominating committee, founder Bill Gates has too much control over board composition. A former company president shouldn't be sitting on the audit committee. And with just eight directors, every warm body counts--three of them shouldn't be sitting on five or more additional boards."

Intel makes the list for having one of the best boards.
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Old Sep 28, 2003, 10:09 AM   #8
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Jerry YORK!! give me a break

If anything good happened at Chrysler or IBM, it wasn't because of Jerry York. He either had oustanding direction or good people working for him. His work at Microwarehouse shows that. Believe me, he has not a clue. His position on the Apple board only makes the Business week ranking that much more accurate. I asked him one time if his postion on both the Microwarehouse board and the apple board was a conflict of interest. He told me it wasn't. Apparently, other people think it is.
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Old Sep 28, 2003, 04:42 PM   #9
Vector
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i think you just won the award for dredging up the oldest thread.
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Old Sep 29, 2003, 12:05 AM   #10
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um...yeah...

so did u wait a year & a day exactly on purpose?
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Old Sep 29, 2003, 08:37 AM   #11
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Quote:
Originally posted by Vector
i think you just won the award for dredging up the oldest thread.
Not quite, nfarlow gets that award, almost two years.

http://forums.macrumors.com/showthre...644#post431644
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Old Sep 29, 2003, 11:19 AM   #12
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Originally posted by vniow
Not quite, nfarlow gets that award, almost two years.

http://forums.macrumors.com/showthre...644#post431644
that is impressive. at least they are searching the forums since many dont before starting new threads.
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Old Oct 2, 2003, 08:05 AM   #13
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Microwarehouse bankruptcy

The reason I posted a year later is becasue of the recent Microwarehouse bankruptcy. The legend Jerry York was at the helm. waht a mastermind. Got a group of investors to pay $800 Million and sell it for $22 Million a few years later.
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