Reuters reports that Tyco Int. Ltd. on Nov. 8 said directors who served during the era of indicted former Chairman Dennis Kozlowski cannot remain on the board after investors and a regulator panned the idea. Tyco said its board unanimously reaffirmed a September vote that said all nine directors who served during Kozlowski’s 10-year tenure could not stand for re-election early next year.
In recent months, a small group of Tyco directors initiated a rear guard action to reverse the September resolution. They argued that the troubled conglomerate needed continuity to navigate numerous investigations into the actions of former senior management.
Ira Millstein, considered a guru of U.S. corporate governance and enlisted by the contingent to lobby Tyco on their behalf, apparently had swayed Tyco Chairman Edward Breen. But when word leaked that Tyco might reverse course and retain some directors, large shareholders and New Hampshire’s top securities regulator balked.
New Hampshire’s chief securities regulator on Thursday wrote a letter to Breen expressing his dismay that Tyco might reverse course by keeping at least three Kozlowski-era directors. Tyco has corporate operations in Exeter, New Hampshire.
As a compromise, Tyco’s board voted to allow Breen to select two outgoing members to become nonvoting advisers. The board also nominated retired U.S. Navy Admiral Dennis Blair to fill an expected vacancy.
Breen said a new slate of independent directors will bring new perspective to Tyco.
