Stretched thin, Mitchell cuts workload to meet new Disney board obligations.

After decades of nonstop work, George Mitchell has hit the wall.

The 69 year-old former Senate Majority Leader resigned last week as vice chairman of the new commission headed by Henry Kissinger to investigate why federal agencies failed to detect the Sept. 11 attacks, citing, among other concerns, time constraints. He also has agreed to sit on just four corporate boards, down from at least eight.

The scheduling cuts come as Mitchell takes on the position of presiding director of Walt Disney Co., a new post created to ease share-holder concerns that the board is under the control of Chairman Michael Eisner. It also could prove to be a pivotal spot should recalcitrant Disney directors ever mount a campaign to oust Eisner or drastically alter the company's strategies.

"These new guidelines are another sign of Disney's commitment to maintaining a leadership role in corporate governance," said spokesman John Spelich, who confirmed earlier reports that Mitchell has agreed to sit on just four boards.

As presiding director, Mitchell will chair board sessions without management directors--at least two of which are now required each year-in addition to advising Eisner and the committee chairs.

"The presiding director will be a legitimate way for board members who are unhappy with management to approach the company without dealing with management," said Herbert Denton, president of Providence Capital and a Disney shareholder.

The number of boards Mitchell sits on is somewhat of a moving target. As recently as September, he was a director of MPS Group Inc., Fedex Corp., Casella Waste Systems Inc., UnumProvident Corp., Starwood Hotels & Resorts Worldwide Inc., Staples Inc., Xerox Corp. and Disney.

Mitchell resigned from the Xerox board in September and from Casella Waste Systems and UnumProvident's boards last month. Officials from Disney, Staples, Starwood and Fedex said Mitchell will remain on their respective boards. Officials from MPS Group did not return calls.

Mitchell also serves on the advisory board of Unilever PLC, and a spokeswoman said he is expected to continue in that role.

Mitchell himself did not return repeated calls for this story. Asked if he was unavailable or just uninterested in talking, the woman who answered Mitchell's phone said, "He does not want to discuss that matter."

In resigning from the Kissinger commission last week, he noted in a letter that "the work of the commission would require more time than I can now commit to." Earlier, he had defended his role on corporate boards, telling U.S. News & World Report last April that, "The amount of time necessary to serve effectively on boards is not uniform."

Is he overcommitted?

Shareholder advocates long have raised questions about Mitchell serving on too many boards, but it was only after the fall of Enron Corp. that thrust corporate governance into the national spotlight.

Mitchell, for example, had served on the board of Xerox when the embattled maker of copiers restated earnings from 1997 to 2002 to account for $6.4 billion in revenue that had been inappropriately booked--part of a settlement of fraud allegations by the Securities and Exchange Commission.

"The mere association with that board is not the problem with someone of George Mitchell's stature," said Ric Marshall, chief executive of the Corporate Library, a Portland, Maine research firm that specializes in corporate governance. "The question is, is he overcommitted, and the answer is absolutely yes."

Mitchell has a strong reputation as peacemaker, and even Disney's harshest critics are applauding the board's decision. But they still wonder if he has too much to do.

"I can well understand why Disney would want to use someone of his stature in the very important position of presiding director," said Marshall. "But the problem is he's already vastly overcommitted. It's hard to imagine how he is going to do justice to the demands of being, in essence, the independent chairman of that board."

Yet, friends and business partners say Mitchell has little trouble staying on top of his numerous commitments.

"He was as prepared as any of the board members," said Arthur Maxwell, who served on the board of U.S. Technologies Inc. with Mitchell until 1998. "It was amazing to me that he took the time out of his schedule to make sure his presence was felt."

(Accounting troubles at U.S. Technologies led to the resignation of William Webster, who briefly served as head of the SEC's new accounting oversight board.)

Focused on Disney

Tom Werner, who with Mitchell is one of the owners of the Boston Red Sox and a partner at production company Carsey-Werner-Mandabach LLC, said the former senator is able to handle a heavy workload because he focuses on whatever he is doing at the moment.

"When you're in the room with him, it is not as if he has his cell phone on because has to take a call from Secretary Powell," Werner quipped. "And when he's working at Disney, he's probably completely focused on that."

Denton, who recently proposed that Disney separate the offices of chairman and chief executive, said he has found Mitchell more responsive than Disney's less busy board members.

"About two weeks ago Senator Mitchell sent me a letter assuring me he was paying close attention to our concerns," Denton said. "That was a very nice gesture."

Still, there are signs of strain. Of the seven meetings that the board of MPS Group conducted in 2001, Mitchell was unable to attend three, all of which were held by telephone, according to a proxy statement filed with the SEC.

"I would find that, given his schedule, he would find it quite challenging to focus (on so many boards)," said Charles Elson, .director of the Center for Corporate Governance at the University of Delaware. "There are only 24 hours in a day."

At the core of the debate is a year of financial and accounting scandals that has focused attention on corporate governance. A survey by the California Business Roundtable of 900 chief executives finds that 61 percent said corporate America did only a fair or poor job of responding to the public's concerns about accountability, responsibility and integrity.

"However," said Cathy Anterasian, head of the computing specialty practice at Spencer Stuart, which prepared the survey, "California CEOs and. their company's boards are taking an active role in addressing these issues."

Nowhere is this more evident than at Disney, which has seen the value of its shares tumble more than 60 percent from an all-time high in April 2000. The. company has been assailed for having poor corporate governance and recent disclosures that four directors have relatives working for the company were cause for an SEC inquiry.

But early this month Disney's board approved a new set of corporate governance guidelines, which tightened the definition of an independent director and established the presiding director position.

Disney critics call the changes a step in the right direction, but they are split on whether Mitchell is the best choice as presiding director. He did not fit the 'definition 'of an independent director until recently, when Disney ended a consulting relationship with him. The company had also used Mitchell's law firm, Piper Rudnick LLP, until May.

"Each of those prior relationships, certainly, from a governance standpoint, are things to think about," Elson said.

But Denton, one of Disney's harshest critics, said he is in full support.

"He has the stature to deal with a strong personality, such as you might find in Michael Eisner, so in my eyes he is an excellent choice," he said. "That is the nicest thing I have ever had to say about the company."

Mitchell's Workload

Company                          Role

Walt Disney Co.                board member
Staples Inc.                   board member
FedEx Corp.                    board member
Starwood Hotels and            board member
 Resorts Inc.
MPS Group Inc.                 board member
Piper Rudnick LLP              partner
Queen's University of Belfast  chancellor
The Economic Club of           president
 Washington
Unilever PLC                   advisory board member

Source: Piper Rudnick LLP, Business Journal Research