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Directors & Boards E-Briefing, March 2010 editorial


Volume 7, Number 3 •  March 2010


Koz on the Cover
A closing of the circle on a governance success story that wasn’t.

Ten years ago this month, for the Spring 2000 edition of Directors & Boards, I ran a photo on the cover of Dennis Kozlowski, then the high-flying chief of high-flyer Tyco International. It is not something I am ashamed of, nor is it something that I am particularly happy to be reminded of.

Those were certainly palmier days for Kozlowski and Tyco. It may be hard to believe now, but there was a period when he was considered a paragon of good corporate governance. Not to hide in a crowd, but our cover story — a Q&A interview conducted by our lead columnist Hoffer Kaback (sorry, Hoffer, if you are not inclined to be reminded either) — joined many other laudatory reports at the time on the dynamic growth of Tyco and the leadership qualities of its CEO.

Not only did we do this particular cover story, but five years earlier we ran an article authored by Kozlowski himself, titled “The Vitals of Accountability.” As he stated in this article, “The key issue for our board, and for every board in America today, is how to ensure accountability.” In light of subsequent events, how sad it is to remember him composing (and us publishing) a line like this. If he believed it then, he was right to express such an observation. He would be right to say so again today — were he not an inmate at a New York correctional facility.

My intention is not to beat up on this past author, with whom we enjoyed a good relationship. (I even had him do a book review for us of a biography of Bob Monks, A Traitor to His Class; Monks served on the Tyco board under Kozlowski for nine years . . . so, thinking like an editor, who better to opine on this 1998 bio of the famed governance activist?)

No, what has happened is that I just got a big reminder of our Kozlowski coverage when it was cited in a new book by John Gillespie and David Zweig, Money for Nothing [Free Press, 2010]. At first I didn't know whether to be appalled or flattered.

But the book is a good one. For a book on corporate governance, not the most cash register-ringing of topics for a mainstream book publisher aiming for a general audience, it has actually gained impressive traction, including admiring reviews in the New York Times and Wall Street Journal and good pickups elsewhere, such as this cheeky piece in Fortune.

The book’s subtitle pulls no punches — How the Failure of Corporate Boards Is Ruining American Business and Costing Us Trillions. I know there are compelling counterarguments to that thesis that I could and perhaps should muster based on our journal’s close coverage of boards for almost 35 years. Nothing is that stark, or one-sided.

For this unsettled moment in governance, the book deserves its opportunity to channel debate about the role and effectiveness of boards. I ran an excerpt in the First Quarter edition of Directors & Boards, just coming off press as this e-Briefing is landing in your email inbox. The authors called our Kozlowski material that they cited in their book "fascinating," and I am happy to return the compliment with the passage I published — their jailhouse interview with Kozlowski, which yielded some fascinating reflections on how it all went wrong between a CEO and his board.

In a way, this latest piece in Directors & Boards closes the loop on our 15 years of Kozlowski coverage — from the grand days of his being a governance success story to the astounding fall from all that is graceful and good about the leadership of boards and corporations.

But there is a bigger picture to all of this. I believe it, as should you, when book authors Gillespie and Zweig state that this is just not a failure of governance at Tyco: “It’s clear that Kozlowski and his directors shared the same flawed relationships that have plagued many other boards.”

I welcome your comments at    

Jim Kristie is the editor and associate publisher of  Directors & Boards.



Directors & Boards e-Briefing is a monthly service of Directors & Boards. All contents copyright 2010, MLR Holdings LLC.





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