Four of seven outside directors have held seats since at least 1997. They missed or didn't challenge management on problems brewing at the time. The oldest director, Phillip Samper, was absent at more than 25% of meetings in four of eight years through 2003.
The board made a good move in January in replacing CEO Bell with Michael Roth. Mr. Roth, appointed a director in a 2002 board makeover, is a seasoned CEO (MONY Group), an accountant and an outsider.
But the board took too long to install a forceful outsider. It complicated matters by leaving Messrs. Bell and Dooner as directors. The Corporate Library's Nell Minow, a corporate governance expert, told us she's opposed to ex-CEOS staying on a board-for good reason. It's hard for a new CEO to have candid discussions about changes when the old guard is sitting at the table.
Interpublic talks a good line. "Corporate governance is about accountability," says its Web site. "To all of our stakeholders-investors, clients and Interpublic employees, around the world. By adopting best practices in corporate governance, we build confidence and trust with these key partners." Interpublic recast the board in February 2002 to give majority control to outsiders. The board created a corporate governance committee in July 2002, two weeks before the meltdown began with a filings delay and earnings restatement. In late 2002, it added a "presiding director" and Interpublic named a "chief risk officer."
The payoff? Another earnings delay, another possible restatement, another credit downgrade, stock price near 2002 lows. Hardly the stuff to inspire confidence and trust in either Interpublic or its board of directors.