Most corporations have bylaws about how many board members they must have. The federal government requires that boards of directors keep enough outside members to maintain independent audit and compensation committees.
Ford (F) may have some trouble with these rules and regulations. Yesterday, two of its most prominent board members left: John R.H. Bond and Jorma Ollila. Bond is chairman of Vodafone (VOD). Ollila is chairman of Nokia (NOK) and Royal Dutch Shell (RDS). Neither is exactly at retirement age. Their departure follows that of the Ford CFO by less than a week.
Ford still has eleven board members, but, the company is in such deep trouble, others may leave. Some analysts think that Ford could run low on money next year.
Bond and Ollila said they were worried that they could not spend adequate time working with Ford while it muddles its way though the global automotive crisis. Each said he would need to spend more time in Europe which is moving into a deep recession.
Some of Ford’s other board members may have to leave. Ford does not have a real public company board. The Ford family controls the vote, so it may not need a full complement of directors.
Here are some of the other people on Ford’s board and why they may leave:
Stephen Butler is the retired head of KPMG. The accounting firm may need him back because it will be required to spend additional time looking at the complex year-end write-offs at clients in the banking and brokerage industries.
Kimberly Casiano is president of Casiano Communications, a publishing and direct marketing firm in Puerto Rico. She may resign because she has absolutely no qualifications to be on the board of a multi-national car company, or any other large corporation for that matter.
Irvine Hockaday is the retired CEO of Hallmark Cards. A recession could do substantial damage to the greeting card business and he might be called upon to take back his old job to steer the company through a very difficult period.
Richard Manoogian is chairman of Masco (MAS) a home improvement and construction materials company. Since the housing market is in its worst slump since The Great Depression, his firm will require all of management’s time to save the company.
Ellen Marram runs the Barnegat Group. She has worked at Seagram and Tropicana. Since Barnegat is an obscure business advisory firm, she may not be renominated due to lack of credentials.
Homer Neal is a professor of Physics at The University of Michigan. In order to get the grants to hold onto his large salary at U of M will require much more of his time during a recession.
Gerald Shaheen is the head of Caterpillar (CAT). The global downturn in heavy construction will almost certainly undercut his company’s earnings and keeping Cat on track will require more and more of his time.
John Thortan is a former senior executive at Goldman Sachs (GS) and is now a professor at Tsinghua University in Beijing. Since China is replacing the US as the leading global economic power, he may simply decide that spending time working in the declining American business environment is not worth his effort.
That will leave CEO Alan Mulally, William Clay Ford, Jr. and Edsel Ford II to go down with the ship.
Douglas A. McIntyre