Disney Board reduction

[Panthius]

Disney Reduces Size of Its Board
Tue January 28, 2003 03:07 AM ET

By Carl DiOrio
HOLLYWOOD (Variety) - And then there were 13.

Four longtime directors including Hollywood icon Sidney Poitier won't stand for re-election to the Disney board, officials said Monday. That means the Mouse House soon will have 13 directors, following last month's appointment of former Seagram vice chairman Robert Matschullat as a 17th Disney director.

The bard contraction is in line with the Burbank-based firm's campaign to make its corporate-governance practices more shareholder-friendly. Head Mouseketeer Michael Eisner secured the services of corporate-governance consultant Ira Millstein last year amid creeping shareholder distrust on Wall Street.

The reduction of Disney's board size and a reshuffle of some committees is aimed at making governance more flexible and open. Also at the December board meeting, former U.S. senator and current Disney board member George Mitchell was appointed to the newly created position of presiding director. Twice yearly he will run board meetings in the absence of corporate executives.

Disney said it also hopes to boost board independence and recently adopted stricter definitions of independent directors.

One of the departing directors -- architect Robert Stern -- was recently reclassified as a non-independent director because of architectural services he had provided for Eisner. But a Mouse spokeswoman said she couldn't explain how it was determined which directors would be leaving the board.

"The nominating committee of the board makes these decisions," spokeswoman Zenia Mucha said.

Also missing from Disney's list of 13 directors standing for re-election are school principal Reveta Bowers and Sotheby's executive Andrea Van de Kamp. Bowers was long rumored to be among those expected to step down from the board.

Disney said it considers nine of the directors named to stand for re-election to be independent board members.

"Reveta, Sidney, Bob and Andrea have made invaluable contributions to Disney during their more than 30 years of collective service," Eisner said in a statement. "I want to thank them for their hard work and unwavering commitment to the shareholders during their tenure."

Disney said its board will continue to work on other corporate-governance issues, including the formalizing of an Eisner succession plan.

Disney announced its new board slate after the close of market trading; its stock ended 2.1% lower at $16.75, falling farther than the overall market.

Considering those who will no longer be part of the board, is this good or bad for Eisner? My initial reaction is that it i bad for Eisner, but I would like to hear from those who know a lot more on the situation.

Panthius