Best practices, worst appearances:
Jeb Bush’s boardroom troubles
From The AP: “During his transition from Florida governor to likely presidential candidate, Jeb Bush served on the boards or as an adviser to at least 15 companies and nonprofits ...”
More recently, Bush (who left the governor’s office in 2007) appears to have cut back on his boardroom work. At least a little. “Bush served on the boards or as an adviser to 11 companies or nonprofits at a time each year from 2010 to 2013. ... Those ties were in addition to his own businesses, such as Jeb Bush & Associates, and the educational foundations he created.”
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The AP reports that the former Florida governor “joined the board of at least one company, InnoVida, despite signs that the CEO’s prior venture dissolved amid fraud allegations. The CEO, Claudio Osorio, is now serving 12.5 years in prison. At least five of the companies have faced class-action lawsuits.”
There’s nothing in any of that that washes up at Bush’s feet, of course. One of the advantages of being a board member is that, among other things, your role is a largely advisory one; you’re not part of the day-to-day operations that sometimes get people indicted.
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BUT STILL. When you’re considering a run for the White House, appearances are everything. And having a place in the boardrooms of that many companies raises the questions of where his real interests lie — and how effective he could be as a board member for any of them.
“Board of directors and advisory boards are in charge of high-level oversight,” law professor Elizabeth Nowicki told The AP. “You cannot possibly do that simultaneously for 10 or 15 entities. If somebody starts serving on more than three or four boards that's a problem,” said Nowicki, a former Securities and Exchange Commission lawyer.
As you’d expect, Team Bush is pushing back against any hint of doing the wrong thing. “Gov. Bush has always conducted his business with the highest integrity and performance, just as he did when he served as Florida’s chief executive for eight successful years,” a Bush spokeswoman said in a statement.◊ ◊ ◊
But there’s another way to look at this. Another advantage to being a board member of a company is that you’re compensated, a little or a lot, for basically sticking your head in the office and periodically casting a vote for this or that.
Bloomberg Business reported in May 2013 that the pay for board directors at Standard & Poor’s 500 Index companies “rose to a record average of $251,000 last year, the sixth straight year of increased compensation since federal rules began requiring disclosure.”
“The average pay for directors is almost six times the $42,700 average salary for private-sector workers holding down full-time jobs,” Bloomberg reported.
Bush signed a $15,000-a-month consulting deal with InnoVida, a building materials maker, The Miami Herald reported in January.
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IT’S JUST one more headache for Team Bush, one more body blow to be absorbed as the ex-governor pulls his chin over making a run for the Oval Office. And it makes an inquiring mind wonder how fully engaged Bush could be as president with so many corporate masters bidding for his time and attention. You can’t put your attention span in a blind trust.
And his attention has been subdivided into its constituent parts in recent weeks and months by other embarrassing revelations. A few weeks back, he said he would have authorized the Iraq war, despite what we now know about the existence of the WMD’s that sent the United States on a tragically quixotic misadventure.
Then there’s the matter of a Bush Super PAC being investigated by the Justice Department. Two watchdog groups, Democracy 21 and the Campaign Legal Center, told Attorney General Loretta Lynch that Bush and the PAC “are engaged in a scheme to allow unlimited contributions to be spent directly on behalf of the Bush campaign and thereby violate the candidate contribution limits enacted to prevent corruption and the appearance of corruption.” Politico reported on this on Wednesday.
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To be fair, The AP reported, “executives who worked alongside Bush describe him as an engaged adviser with an eye on detail.” Which is what you would expect from one of Florida’s more popular governors, a man who’s shown the ability to reach across the aisle and govern in a way that’s responsive to that state’s challenges and demographic diversities.
But too much is too much. Zabihollah Rezaee, a University of Memphis accounting professor and author of books on corporate governance, told The AP that three boards should be the limit.“Board members are representing shareholders, and they are responsible to shareholders for financial integrity,” he said. “Best practices” point to a need to be on a small number of boards, he said, “because of the amount of time it requires to be effective.”
Running for the presidency is a high-level balancing act; the best of the Flying Wallendas work pales in comparison. Jeb Bush has to decide not just what’s important, but what’s most important as he weighs what could be the most important decision of his public career. He’s advised to choose wisely. Best practices in the boardroom don’t always translate well in a downbeat, still-underemployed nation of people for whom boardrooms haven’t always meant good news.
Image credits: Bush: Associated Press. Osorio: Broward County Sheriff’s Office.
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