ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, August 14, 1996 TAG: 9608140030
SECTION: BUSINESS PAGE: B8 EDITION: METRO
DATELINE: NEW YORK
SOURCE: BLOOMBERG BUSINESS NEWS
Board directors of major U.S. companies shouldn't presume their jobs are safe, according to an annual survey of 1,000 directors.
In the past year, 54 percent of all companies asked at least one member of the board to resign, said the directors surveyed by Korn/Ferry International, a group that helps companies search for executives.
Corporate governance committees, which review how well boards work, are holding directors more responsible for profits.
In some cases, these committees conduct formal evaluations of board members. Others weed out underperformers through informal processes, Korn/Ferry said.
``This is a shift from the day when once you got on a board you were there forever,'' said Korn/Ferry Chairman and Chief Executive Richard M. Ferry in a statement. ``Boards are increasingly taking pains to evaluate their performance.''
Lack of contributions to committee deliberations and lack of ``understanding of the company's mission and strategic plans'' are the most common reasons that a committee asks a director to step down, Korn/Ferry said. Conflicts of interest also were cited.
Health care, pharmaceutical and entertainment companies were most likely to ask a director to step down, according to the survey, with 68 percent of those companies asking a board member to leave. ``These boards are becoming more and more independent,'' said Barbara Casey, a spokeswoman for Korn/Ferry. ``They're not just puppets.''
The news media have contributed to this change by putting the spotlight on directors' salaries and company layoffs, Casey said.
Stockholders also are pressuring directors to take a more active role in their companies as a source of quality control, she said.
LENGTH: Short : 45 lines ILLUSTRATION: GRAPHIC: chart - Facts about Corporate Directors. color STAFF KEYWORDS: MGRby CNB