In the post-Enron era, independent directors must ultimately ensure their companies are operating soundly. A strong stock price (like Enron's was and like Omnicom's is) and impressive financial reports aren't enough. Let's be clear: Omnicom and Interpublic are not Enron. Yet their shareholders, clients and employees deserve the sort of aggressive board oversight the Enron board should have delivered. Placing outsiders in control of the board, with clear responsibility for the company, should help make that oversight possible.
Interpublic reconfigured its board from six insiders and six outsiders to two insiders (Chairman-CEO John J. Dooner Jr. and Chief Financial Officer Sean Orr) and seven outsiders. Omnicom's board today has nine insiders and eight outsiders; after its May shareholders meeting, it will have two insiders (Chairman Bruce Crawford and President-CEO John Wren) and nine outsiders. (Rival WPP Group has four insiders and 11 outsiders on its board. Grey Global Group's board has three outsiders and Chairman-CEO and major shareholder Ed Meyer.) There is a question about Omnicom's plan. Mr. Wren says the insiders leaving his board all will continue to attend board meetings. How independent can directors be if hired hands are hanging around the boardroom?
Outside control of boards is not enough. Enron's clubby board had 12 outsiders and two insiders before its implosion. Boards must be independent, hold management accountable and be accountable themselves. At Omnicom and Interpublic, clients are served and employees are led by agency managers. But the companies ultimately must rely on the judgment and responsibility of the outsiders now in control of these boards.