Disney Revamps Board; Eisner Critic Sidelined

05 December 2002

As part of its ongoing drive to improve corporate governance, Walt Disney Company has made a number of changes to its board.

Disney has been criticised in the past for having directors who are insufficiently independent of forceful ceo Michael Eisner, criticism that has prompted a string of reforms over the past few months.

Ironically, however, independence guidelines introduced this week may reduce the influence of one of Eisner’s biggest critics.

Under the new criteria, Stanley Gold – who has clashed with the ceo in recent months over Disney’s poor performance – will no longer have ‘independent’ status as a director, since he is a business partner with the media mammoth’s vice-chairman Roy E Disney.

As such, he can no longer serve on the audit, compensation or governance and nominating committees.

Another director, Robert A M Stern, has also lost ‘independent’ status under the guidelines, as he conducts architectural work for Eisner.

In other board changes, Disney appointed ex-senator and Northern Ireland mediator George Mitchell to the new post of presiding director, and named one new independent board member, Robert W Matschullat, who will chair the audit committee.

The media giant also revealed it is being probed by the Securities & Exchange Commission for employing relatives of three board members, as revealed in the summer [WAMN: 13-Aug-02].

• Separately, Disney has revised its financial results for its fiscal Q4 (ended September 30) to take account of the poor performance of its latest animated film Treasure Planet. As a result, net income for the quarter has been reduced from $222 million (€222m; £141m) to $175m.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff