Revolt in the Boardroom by P-HarpercollinsPubl


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									Revolt in the Boardroom
Author: Alan Murray

Count them: Franklin Raines, Michael Eisner, Carly Fiorina, Harry Stonecipher, Hank Greenberg ,
Morgan Stanley's Phillip Purcell. These chief executives, each running one of the sixty largest companies
in America, were each removed against his or her will in the span of the same year. The facts in each
case vary. Stonecipher, a short–timer as CEO of Boeing, was fired after a wild workplace fling that began
at the company's annual executive retreat. Greenberg, chief executive of the insurance company AIG for
almost four decades, was ousted under the pressure from New York State Attorney General Eliot Spitzer
because of an investigation of the company's accounting irregularities. Fiorina and Eisner came under
attack from shareholders; Raines was the target of a newly empowered government regulator. But taken
together, they signal a tectonic shift in the underpinnings of power in corporate America. The imperial
CEO is gone. In its place is a new, and often messy, system of board rule, in which a group of people,
many of whom have relatively little experience in business, are holding sway over corporate titans, and in
which an array of new interest groups – shareholders, regulators, hedge funds, employees, and labor
unions – are learning to successfully flex their muscle. This book would tell the tumultuous inside story of
that revolution, examine what caused it, and explore what it means for the future of American business.

On Monday, January 10, 2005, Carly Fiorina sat at the very pinnacle of corporate power.Since 1999, she
had been chairman and chief executive of one of the world's most storied technology companies, Hewlett-
Packard, which employed 150,000 people and brought in revenues exceeding $80 billion a year—roughly
the economic output of Nigeria. She had doubled those revenues by engineering a controversial merger
with Compaq Computer Corporation in 2002—a merger that had been contested publicly by Walter
Hewlett, son of one of the company's revered founders. It had been a grueling, vicious and highly personal
battle for her.But she had won.In the process, Carly Fiorina had proven herself to be one of the most
talented business leaders of her generation. She was charismatic and compelling—able to win the hearts
and minds of audiences large or small. As one executive who worked with her at Lucent Technologies
Inc. put it, "She could sell ice to Eskimos." Because of that skill, she was now widely heralded as the
most powerful woman in business. She traveled the world, giving hundreds of public speeches, and
frequently graced the covers of business magazines. She made such an impression on the public
consciousness that, in many business circles, she could be easily identified by one name alone.She was
Carly.Her position and her power—like those of her colleagues at the very top of the corporate pyramid—
in some ways rivaled the position and power of great rulers. At the turn of the century, CEOs were
unconstrained by powerful ministers or legislators, unchallenged in meaningful elections, unencumbered
by burdensome constitutional constraints, and usually unthreatened by rebellious underlings. The
previous century had seen the flattening of political hierarchies throughout the world. But at the giant
corporations that spanned the globe, controlled much of the world's commerce and generated much of
the world's wealth, the CEO still sat on top of a clear hierarchy, and his or her strength and authority
remained largely unchallenged.CEOs' pay mirrored that power. Fiorina brought home an annual paycheck
that was 20 times that of President George Bush. In her leisure time, she cruised on her large, private
yacht.Particularly in the United States, CEOs like Fiorina were used to getting their way. Technically,
they were appointed by, and reported to, their boards of directors. But many, like Fiorina, held the title of
Chairman of the Board as well as Chief Executive. They set the board's agenda and controlled much of
the board's access to information. They benefited from a business culture, developed during the 20th
century, that held that strong, even autocratic, CEOs offered the best route to business success. The
successful CEO wasn't first among equals; the CEO was boss.In Fiorina's case, this position of power
was particularly sweet because she was a woman. The ranks of corporate power, far more than the ranks
of political power, had remained the province of men throughout the 20th century. When the elite
members of the Business Council held their regular meetings, there were seldom more than one or two
women in the crowded room—or for that matter, more than one or two African Americans. In recent
years, a few prominent women, like Meg Whitman of eBay Inc. or Anne Mulcahy of Xerox Corporation or
Andrea Jung of Avon Products, had broken through the glass ceiling and made it to the top. But at the
beginning of 2005, those women were still scarce enough to be counted on the fingers of two hands.
Among Fortune 500 companies, no more than 10 had female...
Author Bio
Alan Murray
Alan Murray is assistant managing editor of the Wall Street Journal and author of the paper's authoritative
"Business" column, which runs every Wednesday. He is former host of CNBC-TV's Capital Report, and
remains a regular contributor to the television network. A winner of numerous journalism awards, Murray
has written two previous bestsellers: Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely
Triumph of Tax Reform, coauthored with Jeffrey Birnbaum, and The Wealth of Choices: How the New
Economy Puts Power in Your Hands and Money in Your Pocket. He lives in Greenwich, Connecticut,
with his wife and two children.

Discovers fresh insights from even the best-known corporate blow-ups.

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