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| Best Practices |
The Chapter After 11
Suzanne McGee
05/03/2004
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Those of us
who are of Hirschfield’s mettle can expect to receive similar phone calls as
dozens of Chapter 11 survivors, ranging from telecom giant WorldCom to venerable
battery manufacturer Exide Technologies, scramble to build brand-new boards.
Headhunters, CEOs and creditors-turned-investors are turning to former
executives who are in their 40s, 50s and 60s—people who have extensive
experience running companies and, often, deep knowledge of a particular
industry. Many potential board members, however, have taken a step away from the
corporate rat race, selling the companies we built from scratch or otherwise
retiring. With enough wealth for ourselves and our heirs, it is no longer
necessary to work, although we are not yet ready to spend the rest of our lives
on the golf course. When the call comes, most of us might expect to react the
same way Hirschfield did; we will wonder if there is anything at all in it for
us.
TOP VIEW
Sooner rather than later, nearly every not-quite-retired executive will hear
from a recruiter for the board of a deeply troubled company, with a plea to lend
much-needed expertise and sobriety to the anticipated turnaround. It is a dirty
job, but those of us who enjoy a challenge will find both psychological and
financial rewards, provided the company does have the potential to reverse its
past misfortunes. |
At a glance, joining the board of a company emerging from Chapter 11
with a freshly wiped slate might sound like a safer proposition than becoming a
director of a troubled company. In practice, however, to succeed in overhauling
a bankrupt company, a board member must be a diplomatic virtuoso with a flair
for psychology and marketing, not to mention an instinctive finesse for
bottom-line decisions when the bottom line is somewhere near the center of the
Earth.
“You do not have liability for bad past decisions, but you do
have responsibility for fixing them,” says Michael Embler, vice president for
Franklin Mutual, who currently sits on two post-Chapter 11 boards, Kindred
Healthcare, formerly Vencor, a Louisville, Ky., operator of pharmacies, nursing
homes and hospitals, and AboveNet, formerly Metromedia Fiber Network, in White
Plains, N.Y., which trades on the pink sheets.
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