It's well known that Starbucks'
Schultz has been on DreamWorks' board since 2004; his tenure will end at the coming annual meeting. He's certainly not alone among luminaries serving on that company's board. As of DreamWorks' latest proxy statement, other high-profile board members include Paul Allen (co-founder of Microsoft
According to DreamWorks' 8-K filing, time requirements related to Schultz's return to the Starbucks CEO position led him to decide not to stand for re-election.
Last week, I wrote a piece on corporate governance issues, and about how board composition is an important (if complex and sticky) consideration, since boards are supposed to represent shareholders' interests. (Given the sort of high-profile corporate debacles that have befallen the financial-services industry, it's easy to wonder how boards seem to so often miss signs of trouble on the horizon.)
For investors looking for red flags, directors who serve as active CEOs at other companies might be a problem, as common as that practice is. After all, someone who's already busy heading up an entire company may be distracted or impeded in fulfilling a director's role at another corporation, even if that effortusually only adds up to a couple of weeks a year. Who needs extra roadblocks to having a robust, fully engaged board?
Schultz's decision to leave DreamWorks' board could be viewed as nothing more than an interesting tidbit of news, but I think it represents consideration for shareholders' best interests. Starbucks shareholders know that Schultz has plenty of work to do at the coffee company. And I'm sure DreamWorks shareholders would prefer directors who are grappling with less pressing matters than a major turnaround. Schultz's move sounds like good, common-sense business to me.
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