The Motley Fool does a great series of podcasts–I’ve listened in recent months to interviews with James Fallows, John Mackey and Simon Johnson–and the other day I heard my friend Nell Minow of The Corporate Library talking about executive pay, boards of directors and her second life as Beliefnet’s Movie Mom.
Nell was asked who she would choose to dismiss as a CEO, if she had the power to do so. Her surprising answer: Tom Donahue, the CEO of the U.S. Chamber of Commerce.
“He’s a terrible CEO,” she said, with her typical bluntness. “I think he is a virulent force in the field of business and corporations. I think he has hijacked capitalism on behalf of executives rather than investors.”
Why? It turns out that Donahue has served as a director of three public companies, all of which have had problems.
He’s a director of Sunrise Senior Living, which suffered from series of accounting problems, a plummeting stock price and a decision to settle shareholder litigation. Two well-respected governance groups, Risk Metrics and Proxy Governance, recommended that Donahue be voted off the board for “failing in is oversight duties,” according to Bloomberg News.
Donahue was also a director of Qwest, the telecom firm which paid $250 million to settle SEC charges that the company fraudulently booked $3.8 billion in revenue over three years, the Washington Post reported.
Finally, Donahue serves on the board of Union Pacific, where, according to Nell, the board “supported the bonuses of executives by attributing revenue from the sale of a division as operating revenue.” Donahue’s role at Union Pacific has left him open to the charge that he has a conflict of interest on the climate-change issue because the railroad carries so much coal, as Pete Altman of NRDC has said.
Certainly Donahue has not shown much respect for his own directors–that is, the companies that pay him to run the chamber. On the climate change issue, the chamber’s position runs counter to that of such Fortune 500 firms and chamber members as GE, DuPont and Ford. Dow, GE, Johnson & Johnson, Microsoft and Shell have all gone to the trouble of putting out statements saying the chamber doesn’t speak for them on the climate issue, as the Who Does the Chamber Represent? website notes.
You can read about Nell’s visit to The Motley Fool and listen to her podcast here. The entire series of podcasts is available via iTunes.
CORRECTION: DuPont is not a chamber member and hasn’t been since 2005