Friday May 31, 12:48 am Eastern Time
Disney Board Calls on Chief Eisner to Reverse Company's Slide
Walt Disney Co . Chairman and Chief Executive Michael Eisner is facing increasing calls from several members of the company's board to improve Disney's faltering performance and better plan for the future, people familiar with the matter told The Wall Street Journal.
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The Disney board has long been derided for cutting Mr. Eisner too much slack, both in good times and bad. But these days, a string of corporate scandals has put directors themselves under pressure to be more diligent about their oversight role. In that environment, according to people familiar with the board, a small number of important Disney directors has during recent months gotten more assertive with Mr. Eisner in hopes of reversing the entertainment company's slide.
It is a similar scenario to what is being played out at underperforming or downright troubled companies across the U.S. After the collapse of Enron Corp. and the subsequent severe problems faced by companies ranging from Global Crossing Ltd. to Adelphia Communications (NasdaqNM: ADLAC - News) Corp., board members have been widely blamed for being asleep at the wheel.
Greater director activism has spread quickly to the entertainment business. As companies such as Vivendi Universal SA and AOL Time Warner Inc. (TWX - News) have difficulty meeting their stated performance goals, directors at those firms have become more demanding of executives to make sure they don't over-promise and under- deliver.
At Disney, the board members aren't looking to replace Mr. Eisner, 60 years old, whose current contract runs out in September 2006 , these people suggest. Rather, the directors are trying to prod Mr. Eisner by working in consultation with him, a process he has welcomed. Specifically, they want him to intensify efforts to turn the ABC television network around, to build up the company's executive ranks, depleted during recent years by defections, and to come up with a more systematic succession process, something Mr. Eisner has long resisted.
Wall Street Journal Staff Reporter Bruce Orwall contributed to this report.