Performance in the boardroom: the best and worst boards of 1994.

The trend toward independent boards is going strong, but some companies lag the leaders. CE asked two longtime governance experts to identify five boards that are fighting fit and five that are down for the count.

For the past several years, shareholders and corporate-governance critics have been demanding improved performance from executives of publicly owned corporations. Their voices are being heard. Witness the large number of "pay-for-performance" compensation plans and the move toward CEO performance evaluations by many boards of directors.

Today, boards themselves are coming under fire. They are being challenged to improve their oversight of the corporate-governance function and to include more independent, experienced, and talented outside directors who are free from conflicts of interest and CEO domination. Only then, critics argue, can the board effectively monitor management.

Some companies have succeeded in restructuring their boards to improve performance. Others have lagged behind, some distressingly so. As longtime observers of the corporate-governance scene, we recently examined the composition and structure of some 200 boards and selected five "best" and "worst" examples based on the proxies issued in the spring of 1993, covering the 1992 calendar year (CE: April 1994). In this, our second study of 200 boards, we introduced some of the dynamics that relate management characteristics and company performance to board composition and structure. In general, good governance should lead to good performance and solid returns to all shareholders. In making our "best" and "worst" choices, we tried to assess how effectively a board can exercise its mandated duties of oversight, objectivity, and independence in a selected number of company- or industry-specific sectors such as financial, electronics, health care, and entertainment.

Our methods of selecting the best/worst boards are not scientific. In addition to consulting corporate directories and reading the proxy statements issued this spring, we listened to informal input from several CE readers and experienced directors familiar with our first study. We didn't rank these boards, because each is unique in composition, structure, and presentation. The criteria we applied are universal and static. Our second study considered companies with $200 million or more in revenues, up from $100 million in our first analysis.

In this context, we found it useful to think in terms of "strong" and "weak" boards. Strong boards evaluate and reward management's performance; formulate and implement corporate strategy; ensure equity among all corporate constituencies; and select competent directors, committee chairs, and board agendas. By comparison, weak boards usually are inhibited or constrained by specific composition--such as too many inside directors, too many conflicts of interest, and too little diversity.

The five companies we selected for their weak boards vary in size, product/service, market, and recent performance. Two of them had a difficult and disappointing 1993, while the other three posted good-to-excellent returns and growth. We chose the latter three to make a point: Good performance and strong executive leadership can only shield an ineffective board for so long; the first sign of crisis usually exposes a board's flaws.

All five companies face situations that cry out for strong boards, yet they have dragged their heels in making changes. This may be because dominant, entrenched, and high-profile managements overshadow their boards, making directors reluctant to question or criticize management's perspective, judgment, or objectivity. The situation is analogous to riding high on overinflated tires: Unless some changes are made soon, a blowout--or a slow leak--eventually will occur.

U.S. SURGICAL

In 1993, the health-care market suffered a "sea change," as customers began focusing on costs rather than products. The change surprised U.S. Surgical in Norwalk, CT, which was in the midst of a major expansion started in 1992. The company reported a 1993 net income loss of $138.7 million.

U.S. Surgical took drastic action, cutting the quarterly dividend to 2 cents from 7.5 cents and implementing a companywide wage freeze for 1994. Management also redefined the business strategy: Instead of selling surgical instruments and sutures, U.S. Surgical began selling "cost containment" to its hospital customers.

We believe this change could have--and should have--been anticipated before 1992. Health-care costs have been on the national agenda for some time. How did a smart, hard-driving management miss the signs? A strong board could have provided a contrarian perspective to a management single-mindedly committed to a previously successful strategy.

The board is composed of 10 members, six of them insiders--including the CEO (who owns 6.9 percent of shares outstanding), the executive vice president and CEO's wife (with 1.3 percent of the shares), and the 87-year old company founder. Of the four outsiders, two are insurance executives, one an investment banker (all have dealings with the company), and one a long-retired CEO.

Three of the four outsiders serve on all standing board committees. During 1993, the full board met five times, Audit Committee seven times, Compensation/Option Committee six times, and the Nominating and Executive Committees once each. The Nominating Committee's mission statement contains an unusual provision: It "must act unanimously and will not consider nominees recommended by stockholders."

Outside director compensation is relatively generous. The annual retainer fee is $31,200, plus an option for 4,000 shares and $2,500 per meeting. Committee membership carries an additional retainer of $3,120, and committee chairmanship pays $4,375. A shareholder's derivative suit filed in 1992 alleged executives and directors received overgenerous compensation. The defendants denied the allegations, but they accepted a settlement in which the company agreed to pay the plaintiff's counsel $550,000 in legal fees.

However, the poor financial performance in 1993 did prompt directors to take a 10 percent cut in compensation, and the CEO a 20 percent cut.

LOEWS

New York-based Loews also has posted dismal results lately. The financial company's stock price has declined steadily against the S&P 500 and its peer group during the past three years, especially in 1993. This is despite the family-controlled corporation's history of strong and aggressive management. Co-CEOs Laurence and Preston Tisch are both nationally recognized, high-profile executives.

It requires a confident and independent director to question or challenge proposals from the Tisches. We don't see any evidence of such independence. Of the board's 11 members, five are current officers of the company or its subsidiaries--and members of the Tisch family, which owns approximately 30 percent of company stock. There are six outside directors. Three previously served as officers of the company or its subsidiaries, and one of them is now an investment banker whose firm does business with Loews, and who also serves on 10 other boards.

Standing committees include Audit Review, Finance, and Executive. There is no Nominating or Compensation Committee. A "special compensation committee" of two outside directors (both former company officers) sets CEO pay. The co-CEOs can recommend compensation increases, but they have elected not to in the past two years.

Outside directors receive a $20,000 annual retainer. Audit Review Committee members are paid $500 per meeting. In 1993, the board met eight times and the committee twice. The fee structure may help explain why three outside directors attended less than 75 percent of all board and committee meetings.

VIACOM

Viacom's proxy is part of a 300-plus-page volume that details the New York-based entertainment company's recent merger with Paramount Communications. The board underwent some changes in late 1993 and early 1994, and it may still be in a state of flux. The proxy lists 10 members, but stockholders were asked to approve an amendment raising the maximum number of directors from 12 to 20.

Analyzing the board's composition in terms of its insider/outsider ratio is not particularly meaningful. Only two of the 10 members formally serve as company employees. However, Chairman Sumner Redstone, his son Brent, and Wayne Huizenga (CEO of Blockbuster and scheduled to become vice chairman of Viacom) can hardly be called independent "outside" directors, as the term usually is applied. Sumner Redstone is identified as the controlling stockholder of Viacom, owning 85.2 percent and 51.7 percent of Class A and Class B shares, respectively.

The more conventional outsiders are two senior NYNEX executives, a lawyer, an investment banker, and an academic. Five of the 10 directors are lawyers by trade.

There are two standing committees: Audit and Compensation. The latter is chaired by Sumner Redstone, with his son and Huizenga as members. Viacom does not have a Nominating Committee.

Directors' compensation is an annual retainer of $30,000 and $1,500 per meeting. The chairman of the Audit Committee receives an additional $7,500 annually. Viacom also has a directors' deferred compensation plan, a retirement income plan, and an outside directors' stock option plan.

Since 1988, Viacom has consistently outperformed the S&P 500 and the peer group, partly because of the strong leadership of Sumner Redstone, who also orchestrated the intense pursuit of the Paramount merger.

Viacom paid a reported $10 billion for the Paramount acquisition, following a much-publicized bidding war. It certainly would have been comforting to Viacom shareholders to know that a strong board was riding shotgun to a chairman bent on obtaining the prize. Would the newly constructed board have had the objectivity and independence to ensure that the final merger price was based on sound economics and not on personal (or personality) considerations?

BEAR STEARNS 

Bear Stearns of New York appears on our list of worst boards for reasons somewhat different than those cited above.

As was all too common among investment banks, Bear Stearns' board is large, with 35 directors, of whom only eight are outsiders. The 27 insiders are senior managing directors or senior Bear Steams executives.

The board's committee structure and meeting patterns indicate the practical difficulties of having a large board with few outsiders. The full board met six times during 1993, while its Executive Committee--seven insiders, chaired by the CEO--met 53 times. The Compensation Committee, comprising three outsiders and charged with "policy" issues, met eight times. The Management & Compensation Committee of seven insiders met 61 times to set compensation for managers below senior managing director, and to recommend awards to senior managing directors. The Audit Committee consists of two outside directors, and it met five times. There is no Nominating Committee.

Director compensation is a $20,000 retainer and $800 per meeting. Audit Committee members receive an additional $6,000 per year. Compensation Committee members receive an additional $1,500 per meeting.

Executive compensation is based on several complex plans. Bonus and incentive plans account for the largest portion of senior management's pay. All base salaries are limited to $200,000 annually, whereas total packages often run into the millions. Bear Stearns has 194 senior managing directors. Their compensation largely is determined by the Executive Committee and the Management and Compensation Committee.

Incentive compensation is said to be a major motivator in investment banking. In fact, 10 pages of the 28-page proxy, plus 42 pages of appendices, detail revisions to three key management compensation plans. One of these plans could increase the top executives' bonus by several million dollars.

Clearly, executive compensation is a central concern in investment banking. We accept that reality but suggest that a subject of such importance be overseen by strong, independent, outside directors, rather than a large, insider-dominated board. Because the stakes are so high, a strong board--and one that is recognized as such by shareholders--is the key to effective corporate governance in investment banking.

ADVANCED MICRO DEVICES

Advanced Micro Devices is an interesting case for two reasons. First, the board's structural weaknesses are typical of the high-tech electronics and software industries. Second, Sunnyvale, CA-based AMD has been playing "catch-up" with its corporate-governance critics. The semiconductor company reluctantly implemented a number of reforms requested by stockholder resolutions, but it only met the challenge halfway.

The 1994 proxy includes a stockholder resolution calling for a majority of independent directors. The board rejected this proposal, objecting to its definition of "independent" as too restrictive. But in line with a proposal in the same proxy, two new directors were added to the board, thus providing a majority of "non-employee" directors. Of the original six members, all of whom were re-elected, three were insiders: the CEO, vice chairman, and chief operating officer. The outsiders included two investment bankers (one with a firm in which AMD's CEO serves as an advisory board director), and one private investor. The two new members are a German executive/consultant and a California university dean. Our early admiration for the company's global perspective implied by the nomination of a German director was somewhat tempered by the fact that he served on AMD's board as the Siemens AG representative.

During 1993, the same three outside directors served on the Audit, Nominating, and Compensation Committees. The CEO chairs the Nominating Committee. In the 1993 proxy, a stockholder resolution proposed that the Nominating Committee consist solely of "independent" directors. The resolution received approximately 20 percent of the shares voted and was repeated in the 1994 proxy. The board recommended a "no" vote in both proxies.

In the 1993 proxy, the CEO stated his support for a Nominating Committee comprised exclusively of independent directors. Yet he remains the committee's chairman. He resigned in February 1993 from the Compensation Committee, making its membership all-outsider. However, he still has sole authority to set salaries and declare bonuses for executive officers other than board members, and to allocate bonuses under the Executive Bonus Plan.

Outside directors receive a $20,000 annual retainer, $1,000 per board meeting, and $500 for each committee meeting, except the Nominating Committee. The Audit Committee chairman receives an additional $20,000, while the Compensation Committee chairman receives $4,000. The Audit Committee met three times during the year and the Compensation Committee four times. Directors also receive 12,000 stock options upon first election to the board and 3,000 shares upon each subsequent election.

THE BEST BOARDS

Unlike our worst board choices, our best boards are relatively small. Raging from nine to 14 members, they have few inside directors, lawyers, investment and commercial bankers, and management consultants. Most have a somewhat higher than average representation of women and blacks. Director attendance at meetings is very high. And almost without exception, our best five companies ranked high on the Return to Shareholders Charts.

But the biggest difference is in committee structure and operation. Nearly all our best boards have a committee on board affairs, or a similar function, that coordinates and supervises the selection of new directors, the assignment of directors to committees, and the evaluation of CEO and board performance.

The compensation committees' reports in the proxy statements of the best boards are considerably better than those in the worst. These reports give more details, attempt to realistically link pay with performance, and highlight the creativity of individually tailored incentive programs.

We purposely chose some of our best boards from companies that have overcome obstacles and that recently restructured their boards and procedures. Their success shows what can be accomplished in a relatively short time.

COLGATE-PALMOLIVE

Based in New York, this global consumer-products company has a small, strong board that works constructively with a fast-moving company in a competitive industry. Among the board's nine members, only CEO Reuben Mark is an inside director. Of the outside directors, two are women, and one is black.

The board has four standing committees, each with five members, except the Personnel and Organization Committee, which has six. The board met 10 times in 1993, and the committees gathered 19 times. The Committee on Directors acts as the nominating committee, recommends board and committee structure, and reviews board member performance. The Personnel and Organization Committee oversees the company's organizational, personnel, compensation, and benefits policies.

Directors receive a retainer of $18,000 and 275 shares of common stock. Committee chairs get an extra $3,000 retainer, and deputy chairs carry $1,500. All board and committee meetings pay $1,000.

Colgate-Palmolive has a "re-load option" plan for its executives. If employees use shares they own to pay the exercise price of an option or the taxes withheld, they get a new option for the same number of shares at the same expiration date.

The company also has a long-term global growth program in which restricted stock awards depend on achieving targeted levels of growth in compounded global sales and earnings over a three-year period.

TEXACO 

For many years, this international oil company headquartered in White Plains, NY, had a board dominated by its retired CEOs. In the late 1980s, Texaco came under attack from several institutional shareholders for the way it conducted itself during certain tender offers.

Now, under the leadership of new CEO Alfred DeCrane and former CEO James Kinnear, Texaco has restructured its board and realigned its board policies. The board has 14 directors, two of whom are insiders (Kinnear resigned from the board when he retired as CEO).

The board published its "Board Requirements of Executive Management" and "Texaco Requirements of the Board." This is a worthy, one-page document.

Texaco administers its corporate-governance program through the full board and all its committees, but two are of special note. The Nominating Committee reviews the board's size and composition, and recommends candidates who meet the company's criteria. The Committee of Non-Management Directors, which met five times in 1993, administers the Compensation Committee's recommendations and also examines the company's organizational, personnel, and management succession programs.

Board fees include an annual $30,000 retainer and $1,250 for each board or committee meeting. Committee chairmen receive an additional $5,000 to $7,000. The first $10,000 of the retainers and $250 of each attendance fee is paid in Texaco common stock.

BOEING

This Seattle-based aircraft manufacturer has generally outperformed its peers and the S&P 500 Index, despite defense industry cutbacks and problems in the airline industry.

The 12-member board has two insiders. The rest are prominent executives or experienced administrators. There are four standing committees. Interestingly, five directors serve on the Audit and the Finance Committees, and five serve on the Compensation and the Organization and Nominating Committees. The latter advises the board on composition and committees, and makes recommendations on management succession.

During 1993, the board held seven meetings, and the committees 18. Directors are paid a retainer fee of $26,000 and $2,000 for each board meeting, plus a $6,000 committee retainer fee and $1,000 for committee meetings on non-board meeting days. When elected to the board, a director receives an option for 1,500 shares of common stock and is given an additional option for 1,200 shares at each subsequent annual meeting.

The company has an interesting seven-year incentive plan linked to its seven-year strategic plan. A new cycle begins each year and includes the executive investment and the performance-based award, administered by the Compensation Committee.

In 1993, the Compensation Committee awarded CEO Frank Shrontz and President Philip Condit a one-time, five-year, supplemental stock option exercisable only after Boeing exceeds its stock price targets.

GENERAL PUBLIC UTILITIES

General Public Utilities' reputation was tarnished in 1979 by problems with its Three Mile Island nuclear facility. This type of incident tries the strength of a company and its board--and is a continuing test for many years.

Parsippany, NJ-based GPU has an 11-member board, with CEO James Leva the only inside director. The board makeup, compared with other public utilities reviewed, is exceptionally talented, experienced, and independent.

The board met 11 times in 1993 and held 15 committee meetings. The Personnel and Compensation Committee recommends corporate officers and subsidiary presidents to the board, along with their compensation and benefits. The committee reviews plans for management succession and executive development.

Annual director retainer fees are $15,000 and $1,000 for each board and committee meeting attended. A portion of each director's annual compensation is paid in the form of 300 shares of GPU common stock.

GENERAL MOTORS

Just a few years ago, General Motors' board was perhaps the most vilified in the U.S. The company was in disarray, openly criticized by then-director Ross Perot, and lambasted in the press.

Finally, the board acted, electing outside director John Smale chairman and appointing John Smith the new CEO. In addition, the board produced a six-page document entitled, "GM Board Guidelines on Significant Corporate Governance Issues."

This corporate-governance manifesto touches on nearly all phases of board operation. Most important, it calls for the appointment of a Committee on Director Affairs to nominate new directors, assign committee memberships, and annually assess board performance. The full 14-member board is responsible for evaluating the CEO. The non-executive chairman or the lead director gives the review to the CEO.

The new corporate-governance strategy has prompted many changes at GM, most of them seemingly good. In a relatively short time, GM has moved from an ineffective board to an exemplary one. It shows what a few strong directors can accomplish when they set their minds to it.

GM directors are well-paid: There is a $26,000 annual retainer for board service and a $12,000 retainer for service on each of the board's six committees. No attendance fees are paid for regular board or committee meetings, but a $1,000 per diem fee is paid for special assignments. Chairman Smale receives a total compensation of $300,000 per year.

CONCLUSIONS

Our second analysis of America's corporate boards reinforces the two conclusions we reached in our previous one: First, boards of directors are in better shape than most corporate-governance critics give them credit for. Many corporations and CEOs still have not "gotten the word," but even more this year than last took major steps to improve their board composition and procedures.

Second, we are impressed with what a strong board of independent, experienced directors can achieve in a short time to improve its corporate governance and to support a company and its CEO, especially in a crisis.

The trend toward independent, conscientious, and outspoken boards is gaining momentum. It is time for those companies with weak boards to get current with their corporate-governance programs.

PARAMETERS OF THE STUDY

Our study does not purport to be definitive or scientific.

Nonetheless, in sifting through some 200 proxy statements, numerous directories, and accounts in the business press, and in conversations with many experienced directors and CEOs, we adhered to the following guidelines:

* No attempt was made to gain access to board meetings or to witness the dynamics of director interaction. We relied on relatively objective, publicly available information in evaluating the key aspects of board composition and structure.

* Our analysis was limited to public corporations of sufficient size to be listed on one or more of the major stock exchanges. Companies considered had at least $200 million in revenues.

* Criteria were established, and board characteristics were assessed, on the basis of published data, mainly annual reports, proxy statements, and a variety of directories.

* An important aspect of the time dimension needs to be emphasized. Today's boards are typically the end-products of a long history of director selection and structural evolution. Many of the characteristics viewed unfavorably today were perfectly acceptable a few years ago.

* We intentionally omitted any corporations with which we are personally connected as directors or governance consultants.

HOW TO EVALUATE THE CEO

Evaluating CEO performance is part of the function of an effective board, co-authors Bob Lear and Boris Yavitz agree. But how to do that most effectively, particularly in cases where a strong-willed chief resists being put under the microscope?

Yavitz is chairman of the Blue Ribbon Commission on Corporate Governance, recently appointed by the Washington-based National Association of Corporate Directors. Other commission members include Lear; Donald N. Frey, former CEO of Bell & Howell and a Chief Executive contributing editor; and Dale Hanson, former CEO of the California Public Employees Retirement System and a discussion leader at CE's April 1994 roundtable, "The New Governance Paradigm."

The NACD commission recently published a report entitled, "performance Evaluation of Chief Executive Officers, Boards, and Directors: Including Guidelines for Director Selection and Compensation." Some excerpts follow from a section on CEO evaluation.

Any manager can benefit from the feedback and insight of others. Yet in many companies today, the CEO's performance is not evaluated except under the most dire circumstances. Some boards may believe that incentive compensation plans adequately address the need for evaluation of top management. Some CEOs attach a stigma to such a review, believing it is only for the inexperienced CEO or for a CEO whose company is in trouble.

This is far from the case; evaluation makes sense for all CEOs. If facilitates board/CEO communication, provides clear guidelines for CEO compensation decisions, increases the likelihood that the board will support the CEO in times of crisis, and provides a clear signal to shareholders and regulators that the board is monitoring and evaluating the actions of the CEO and senior management.

Performance objectives should be in writing, agreed to by the CEO and the board, and established in advance of each fiscal year. They might include some or all of the following qualitative and quantitative factors:

Integrity: With ethical leadership, a company can surmount even the worst of times. Without such leadership, a company can fail in the best of conditions.

Vision. Has the CEO articulated a clear vision for the company that makes good business sense? Do operating plans reflect this vision?

Leadership. Has the CEO developed a strong management team? Does the CEO replace weak managers in a timely fashion?

Ability to meet corporate performance objectives. Are shareholder value goals and competitive performance factors taken into account? Are quantitative benchmarks set and tracked?

Succession planning. Has the CEO proposed a plan that makes sense?

In addition, each board should adopt a policy with respect to outside board service by its CEO. The increasing time demands of board service raise an important question regarding the number of boards on which a sitting CEO can effectively serve while still fulfilling all essential obligations to the company.

Any CEO evaluation process must fit the company that employs the CEO. It should be carried out only by independent directors.

Some companies will do well with the discipline and clarity of a formal, written process, while others may prefer the flexibility of an informal, oral procedure. In any event, CEO evaluation should be a confidential process.

FOLLOW-THROUGH

Although we recently chose a new crop of best and worst boards, it is always interesting to follow up on previous picks and see how they are doing now.

In April we selected Dayton Hudson, Unum, Goodyear, Alcoa, and Avon as our best boards. All five companies have fared well in the interim. The only major change was at Dayton Hudson when CEO Kenneth Macke retired and was replaced by Robert Ulrich.

Our worst board picks were Apple Computer, W.R. Grace, Occidental Petroleum, Sunbeam Oster, and Berkshire Hathaway. Accompanied by much publicity, Apple changed its CEO and brought in a new outside director, Paul Stern, who resigned after five months. Sunbeam Oster also brought in a new CEO, Roger Schipke, and a new outside director, Paul Van Orden. Warren Buffett, in his own unique way of managing Berkshire Hathaway, added a new director: his son Howard. No basic board changes took place at Grace or Occidental.

THE HALLMARKS OF AN EFFECTIVE BOARD

Since our previous study in April, there seems to be a growing consensus on the characteristics of an effective board. Representing a cross-section of corporate-governance interests, the NACD Blue Ribbon Commission, on which we served, recently published a consensus view of what makes for a good board. (Copies of the report entitled, "Performance Evaluation of Chief Executives, Boards, and Directors," can be obtained from NACD, 1707 L Street NW, Suite 560, Washington, DC 20036.)

The picture that emerges in the report resembles the structural criteria we first proposed in our April study. Once again, we did not weight criteria or rank the companies in each category, because different companies have different requirements at different times and under different circumstances, and some of our choices were made to illustrate specific points.

In this selection, we attempted to evaluate board composition and committee structure in the context of a company's management characteristics or strategic concerns. As such, boards could be seen as strong or weak. The key aspects of an effective board composition and structure are as follows:

Board size: Keep it relatively small--more than a handful of members (four or five), but less than a crowd (15 or more).

Outsider/insider ratio: Limit yourself to one or two inside directors. Former CEOs, serving for a prescribed period, count as insiders.

Potential conflicts of interest: Minimize the number of active investment bankers, legal counsel, commercial bankers, consultants, and interlocking directorships.

Narrow special-interest groups: Minimize investors representing blocks of shares, relational investors, inactive family relations.

Demographic balance: Maintain an appropriate mix of backgrounds, skills, and experience; recognition of capable women and minorities; relevant geographic dispersion.

Stock ownership by directors: Encourage by means of fees or special stock grants.

Committee structure: Establish a clear definition of responsibilities and functions of standing committees (compensation, audit, and nominating).

Emerging indications of director independence: Name a non-executive chairman, where applicable. Recognize a "lead director" or equivalent. Form "board affairs" or "independent director" committee. Establish processes for CEO, board, and director performance evaluations.

Conversely, the above characteristics applied in reverse typically represent needless "baggage" and curtail operating effectiveness. Cumulatively, such baggage can add up to a flawed or ineffective board.

THE BEST BOARDS

Colgate-Palmolive: Reuben Mark, 55, chairman and CEO, Colgate-Palmolive; Vernon R. Alden, 70, ex-president, Ohio University; Jill K. Conway, 59, ex-president, Smith College; Ronald E. Ferguson, 52, chairman, president, and CEO, General Re; Ellen M. Hancock, 50, senior vice president, IBM; David W. Johnson, 61, chairman, president, and CEO, Campbell Soup; John P. Kendall, 65, ex-chairman, Kendall Co.; Delano E. Lewis, 55, president and CEO, National Public Radio; Howard B. Wentz Jr., 64, chairman, Esstar and Tambrands.

Texaco: Robert A. Beck, 68, ex-chairman and CEO, Prudential Insurance; Willard C. Butcher, 67, ex-chairman and CEO, Chase Manhattan Bank N.A.; Edmund M. Carpenter, 52, chairman and CEO, General Signal; Franklyn G. Jenifer, 54, president, Howard University; Thomas A. Vanderslice, 62, chairman, M/A-COM; John Brademas, 67, ex-president, New York University; Alfred C. DeCrane Jr., 62, chairman and CEO, Texaco; Thomas S. Murphy, 68, chairman and CEO, Capital Cities/ABC; Charles H. Price II, 63, ex-U.S. ambassador to the U.K.; William J. Crowe Jr., 69, ex-chairman, Joint Chiefs of Staff; Allen J. Krowe, 61, vice chairman and CFO, Texaco; Robin B. Smith, 54, president, Publishers Clearing House; William C. Steere Jr., 57, chairman and CEO, Pfizer; William Wrigley, 61, president and CEO, Wm. Wrigley Jr. Co.

Boeing: Paul E. Gray, 62, chairman, MIT; Harold J. Haynes, 68, ex-chairman and CEO, Chevron; George M. Keller, 70, ex-chairman and CEO, Chevron; George H. Weyerhaeuser, 67, chairman, Weyerhaeuser Co.; Robert A. Beck, 68, ex-chairman, Prudential Insurance; Philip M. Condit, 52, president, Boeing; John B. Fery, 64, chairman and CEO, Boise Cascade; Stanley Hiller Jr., 69, CEO Key Tronic Corp.; Donald E. Petersen, 67, ex-chairman and CEO, Ford Motor Co.; Charles M. Pigott, 64, chairman and CEO, Paccar; Rozanne L. Ridgway, 58, co-chair, The Atlantic Council of the U.S.; Frank A. Shrontz, 62, chairman and CEO, Boeing.

General Public Utilities: Thomas B. Hagen, 58, ex-chairman and CEO, Erie Insurance Group; Paul R. Roedel, 66, ex-chairman and CEO, Carpenter Technology; Carlisle A.H. Trost, 64, ex-chief of Naval Operations; Patricia K. Woolf, 59, lecturer, Molecular Biology Department, Princeton University; Henry F. Henderson Jr., 65, president and CEO, H.F. Henderson Industries; James R. Leva, 61, president and CEO, GPU; John M. Pietruski, 61, ex-chairman and CEO, Sterling Drug; Catherine A. Rein, 51, executive vice president, Metropolitan Life; Louis J. Appell Jr., 69, president and CEO, Susquehanna Pfaltzgraff; Donald J. Bainton, 62, chairman and CEO, Continental Can; Theodore H. Black, 65, ex-chairman, president, and CEO, Ingersoll-Rand.

General Motors: Anne L. Armstrong, 66, ex-ambassador to the U.K.; John H. Bryan, 57, chairman and CEO, Sara Lee; Thomas E. Everhart, 62, president, CalTech; Charles T. Fisher III, 64, ex-chairman and president, NBD Bancorp; William E. Hoglund, 59, executive vice president, GM; J. Willard Marriott Jr., 62, chairman, president, and CEO, Marriott International; Ann D. McLaughlin, 52, ex-U.S. Secretary of Labor; Paul H. O'Neill, 58, chairman and CEO, Alcoa; Edmund T. Pratt Jr., 67, ex-chairman, Pfizer; John G. Smale, 66, chairman, GM, and ex-chairman and CEO, Procter & Gamble; John F. Smith Jr., 56, president and CEO, GM; Louis W. Sullivan, 60, president, Morehouse School of Medicine; Dennis Weatherstone, 63, chairman, J.P. Morgan; Thomas H. Wyman, 64, ex-chairman, president, and CEO, CBS.

THE WORST BOARDS

U.S. Surgical: John A. Bogardus Jr., 66, ex-chairman and CEO, Alexander & Alexander Services; Thomas R. Bremer, 41, senior vice president and general counsel, U.S. Surgical; Leon C. Hirsch, 66, chairman, president, and CEO, U.S. Surgical; Turi Josefsen, 57, executive vice president, U.S. Surgical; Douglas L. King, 52, president, Smyth, Sanford & Gerard Reinsurance Intermediaries; Zanvyl Krieger, 87, ex-chairman, U.S. Surgical; Bruce S. Lustman, 46, executive vice president and COO, U.S. Surgical; William F. May, 78, ex-CEO, American Can; Marianne Scipione, 47, vice president, U.S. Surgical; Douglas T. Tansill, 55, managing director, Kidder, Peabody & Co.

Loews: Charles B. Benenson, 81, officer, Benenson Realty; John Brademas, 67, ex-president, NYU; Bernard Myerson, 76, ex-chairman, Loews Theatre Management; Edward J. Noha, 66, chairman, CNA; Lester Pollack, 60, general partner, Lazard Freres & Co.; Gloria R. Scott, 55, president, Bennett College; Andrew H. Tisch, 44, chairman and CEO, Lorillard Tobacco Co. (subsidiary); James S. Tisch, 41, executive vice president, Loews; Jonathan M. Tisch, 40, president and CEO, Loews Hotel Division; Laurence A. Tisch, 71, chairman and co-CEO, Loews; Preston R. Tisch, 67, president and co-CEO, Loews.

Viacom: George S. Abrams, 61, Winer & Abrams; Frank J. Biondi Jr., 49, president and CEO, Viacom; Philippe P. Dauman, 40, executive vice president, Viacom; William C. Ferguson, 63, chairman and CEO, NYNEX; H. Wayne Huizenga, 56, chairman and CEO, Blockbuster; Ken Miller, 51, president and CEO, The Lodestar Group; Brent D. Redstone, 43, former assistant district attorney, Suffolk County, MA; Sumner M. Redstone, 69, chairman, Viacom; Frederic V. Salerno, 49, vice chairman of finance and business development, NYNEX; William Schwartz, 59, vice president for academic affairs, Yeshiva University.

Advanced Micro Devices: W.J. Sanders III, 57, chairman and CEO, AMD; Friedrich Baur, 67, ex-executive vice president, Siemens AG; Charles M. Blalack, 67, chairman and CEO, Blalack and Co.; R. Gene Brown, 61, management consultant; Anthony B. Holbrook, 54, vice chairman, AMD; Richard Previte, 59, president and COO, AMD; Joe L. Roby, 54, chairman, investment banking group, Donaldson, Lufkin & Jenrette; Leonard Silverman, 54, dean, School of Engineering, USC.

Bear Stearns: James E. Cayne, 59, president and CEO, Bear Stearns; Grace J. Fippinger, 65, ex-vice president, NYNEX; Carl D. Glickman, 67, private investor; Thomas R. Green, 59, attorney in private practice; Alan C. Greenberg, 66, chairman, Bear Stearns; Donald J. Harrington, 47, president, St. John's University; John W. Kluge, 78, chairman and president, Metromedia; Vincent J. Mattone, 48, executive vice president, Bear Stearns; Michael Minikes, 50, treasurer, Bear Stearns; William J. Montgoris, 46, CFO and COO Bear Stearns; Frank T. Nickell, 46, president, Kelso & Co.; E. John Rosenwald Jr., 63, vice chairman, Bear Stearns; Frederic V. Salerno, 50, vice chairman, NYNEX; Alan D. Schwartz, 43, executive vice president, Bear Stearns; John C. Sites Jr., 41, executive vice president, Bear Stearns; Warren J. Spector, 35, executive vice president, Bear Stearns; Michael L. Tarnopol, 57, executive vice president, Bear Stearns; Fred Wilpon, 57, president and CEO, New York Mets; and the following senior managing directors of Bear Stearns: E. Garrett Bewkes III, 42; Denis A. Bovin, 45; Peter Cherasia, 34; Michael R. Dabney, 47; Kevin J. Finnerty, 39; Richard Harriton, 58 Nancy E. Havens-Hasty, 48; Jonathan Ilany, 40; Daniel L. Keating, 43; David A. Liebowitz, 34; Bruce M. Lisman, 46; Matthew J. Mancuso, 43; Donald R. Mullen Jr., 35; R. Blaine Roberts, 49; Robert M. Steinberg, 48; John Steinhardt, 39; Uzi Zucker, 57.

Formerly the CEO of F.&M. Schaefer (1972-1977) Robert W. Lear is chairman of CE's Advisory Board. He also teaches at the Columbia Business School, where he is executive-in-residence. With 154 years of composite board experience, he is an independent general partner of Equitable Capital Partners and holds directorships with Cambrex Corp.; Scudder Institutional Funds; Korea Fund; and Welsh, Carson, Anderson, Stowe Venture Capital Co.

Boris Yavitz is dean emeritus and chair professor emeritus of Public Policy and Business Strategy of the Columbia Business School. He works as a governance consultant and has served on the boards of the Federal Reserve Bank of New York, J.C. Penney Co., Sterling Drug, Barnes Group, Crane Co., Medusa Corp., St. Regis Corp., PEC-Israel Economic Corp., and Israel Discount Bank of New York. Yavitz is also chairman of the Blue Ribbon Commission on Corporate Governance appointed by the Washington-based National Association of Corporate Directors.