Six bosses who fell out with their boards, and why
Antony Jenkins’ departure from Barclays today is just the latest in a long line of bust-ups between CEOs and their boards
Disputes between chief executives and company boards often make for explosive headlines, and that has been the case today with Barclays’ move to sack its chief executive Antony Jenkins after a C-Suite bust up over the bank’s direction. Stemming from the board’s view that Barclays’ main task should be to boost profitability through larger cost cuts, Jenkins’ departure was marked by chairman John McFarlane’s criticism of the bank as “cumbersome”. He also confirmed that the organisation’s next leader would be required to make it “leaner and more agile”.
While investors responded positively to Jenkins’ firing, the Oxford graduate was instrumental in drawing a line under ethical lapses that occurred during the tenure of controversial former chief Bob Diamond. In Diamond’s era, Barclays was found to have rigged the LIBOR rate used to underwrite trillions of pounds’ worth of financial contracts, and the bank was later fined a total £290m by US and UK regulators.
One of Jenkins’ landmark management moves was to spur the bank’s 140,000 staff to sign up to a new code of conduct, which set out five key values they would have to observe: respect, integrity, service, excellence and stewardship. In addition, staff bonuses were radically restructured along “Purpose and Values” criteria.
Here are six other big bosses who fell out with their boards, why – and what happened next…
1. Steve Jobs v Apple
In arguably the most famous boardroom power struggle of them all, Apple’s board fired co-founder Steve Jobs in 1985, with a man Jobs had once hired – CEO John Sculley – doing the dirty work. Jobs was criticised by the board for costing the company millions of dollars in failed projects, with the flop of Macintosh Office coming as a particularly harsh blow. However, the subsequent failure of Apple’s PowerPC microprocessor led the firm to push Sculley out in 1993. Three years later, Jobs returned – eventually becoming chief executive and launching ground-breaking products such as the iPod, iMac and iPhone. Following Jobs’ death in October 2011, Sculley finally voiced his regrets about the ‘85 firing. (Source)
2. Greg Dyke v BBC
Following stern criticism of the BBC in the final report of Lord Hutton’s inquiry into the circumstances of weapons inspector Dr David Kelly’s death in 2003, director general Greg Dyke came under intense pressure from the public broadcaster’s board. Kelly was named as the source of quotations used by BBC journalist Andrew Gilligan, who described a government dossier on Iraq’s access to weapons of mass destruction as “sexed up”. Dyke defended the BBC’s reporting and publicly refused to bow down to the then-Labour government’s campaign of – in his words – “systematically bullying” the media outlet. However in January 2005, Dyke was forced to quit after the corporation's governors made it known they no longer supported his leadership. Since his departure, the BBC has weathered criticism for overt self-regulation in its programming and journalism, and regular appeasement of government agencies.
3. Jamie Dimon v JP Morgan
Dimon and his board clashed in May after almost one-third of the investment bank’s shareholders voted against his increased remuneration. Dimon pointed his finger at board members in a subsequent meeting for failing to satisfactorily explain the bank’s strong performance to investors, after shareholders deemed there was no “compelling rationale” for his proposed $7.4m cash bonus. Yet despite lso lambasting “lazy” and “irresponsible” shareholders, Dimon’s remains the bank’s leader, having steered the company through the financial crisis and built multi-billion pound profits since his appointment in 2005. (Source)
4. Chris Viehbacher v Sanofi
Poor relations between chief executive Viehbacher and his top team led to the end of his time at Sanofi last October, after chairman Serge Weinberg criticised the chief executive’s abrasive management style and lack of cooperation with directors. Despite the plaudits Viehbacher had won for transforming the French drugmaker into an international brand through global acquisitions, board members were concerned by the poor performance of the cornerstone diabetes business, spearheaded by top-selling drug Lantus. While Viehbacher has since joined the board of healthcare science company PureTech, new Sanofi boss Olivier Brandicourt is under pressure as, ironically, a recent spike in the popularity of Lantus in America has stunted the firm’s new insulin therapy Toujeo. While Lantus’s staying power could support Sanofi’s profits in the near term, it also could leave the company vulnerable as more competitors enter the market.
5. Carly Fiorina v Hewlett-Packard
HP’s $19bn gamble to merge with Compaq Computer Corporation failed to pay off, forcing the board to fire chief executive Carly Fiorina in 2005. Weeks of displeasure and frustration built up towards the CEO among board members, as HP’s stock plummeted by more than 50% since her 1999 appointment. While the firm’s value rose by $3bn the day after Fiorina’s departure, HP continues to struggle in today’s declining PC market – and announced plans only last week to halve its operations into one enterprise business and one consumer-focused unit.
6. Daniel Zappin v Maker Studios
After co-founding the YouTube-based video production company in 2009, chief exec Zappin was replaced in May 2013, prompting the Ohio State graduate to file a lawsuit against the firm’s board. His case alleged that board members had “illegally issued shares to themselves and diluted the common stock for their own financial gain”. Furthermore, he claimed, the board had breached his contract by removing him as CEO. The company denied his claims. Last year, Maker Studios was sold to Disney last year for $950m – a deal that Zappin and three other former Maker execs tried to block through an unsuccessful injunction filing.
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Image of Antony Jenkins courtesy of the Wikimedia Commons.