What Was GM's Board Thinking?
Remember when General Motors was sliding into bankruptcy in early 2009? Back then, it was common to hear people blast the old GM board of directors as being short-sighted, poorly run, and an example of how a board of directors should NOT function.
We were all told that things would change when the Feds put a new board of directors in place. After all, it would be stocked with veterans of corporate America who know the right way to run a company. Keep that in mind as you look at what's happened over the last couple of months at GM.
Heck, look at what happened in the last week.
Chairman and CEO Ed Whitacre Jr. wouldn't commit to running GM long term, so the board picked fellow director Dan Akerson to replace Whitacre. Ackerson may turn out to be a great CEO, but the process for selecting him was a mess.
Was there a full public search for a new CEO? No.
Did the Whitacre resignation and Akerson selection catch executives by surprise? Yes.
Does this look like a rush job akin to a high school student council picking its next president? You bet.
In short, many people, including investors, are wondering how decisions are being made at GM and whether this company is so intent on getting an IPO donethat it's dropped the ball when it comes to corporate governance.
You can't blame people for being skeptical.
There are few answers coming from GM, and even fewer coming from the Treasury department which appointed Dan Akerson to the GM board last year and as the majority shareholder has to know what's going on at GM.
If Ed Whitacre told the board earlier this year that he was not going to stick around, why did the GM board wait until now to make a quick selection of Akerson as CEO? Shouldn't the board have moved sooner? Wouldn't that have made Wall Street more comfortable heading into a GM IPO? Instead, for the second time in the last nine months a GM CEO is suddenly stepping down.
Yeah, we've been told things would be different with the new GM board of directors.
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