JBord

Well, what you're saying is that it's easier to get things done when it's the same person. I agree with that. But my preference is to have more checks and balances. If it's the right direction, the CEO should be able to convince the board of his plan whether or not he's Chairman.

I have much less of a problem with the arrangement in smaller companies that often need to be more nimble to survive and are willing to take more risks to do so.

bmwe92fan

I don't disagree - but I've always been amazed at the amount of time and energy it takes to manage a board of a company of this size - and considering the folks on this one - and the various constituencies - it's going to take a lot work and attention - which to me - here and now with what UA is facing - isn't the best use of the CEO's time or ability.....

BearX220

Maybe the main lesson of the Smisek experiment was the downside of giving one guy too much power in the dual role.

fly18725

Major companies have a corporate secretary and entire teams to support much of the regular board engagement, which tends to be answering questions and providing information. Of course, the CEO works for the board and a good chunk of time (I've heard about 10%) is usually spent engaging with directors.

JBord

I think you're right, which is why I'm very unhappy with the hedge funds attack. Oscar had a board that appointed him and was conceivably backing him. The hedge funds claim the board stinks and tries to force new members, which takes Oscar's focus off where it needs to be. Regardless of how it's been spun, the move was not supportive of Oscar and his agenda.

I'm glad to see some back tracking now (they're now suddenly supportive of Oscar and don't need Bethune to be Chairman), but I agree with you that the board and CEO need to be in lock-step right now. Again, with no inside knowledge, it seemed to me like they were there, and then a wrench was thrown into the works.

JBord

Right. But to me, the time spent is not the stuff you mention, but managing the disagreements and getting consensus with a board that had been seeded with members whose intention was to take the company in a different direction than Oscar and the previous board. There's a pretty good chance that decisions and implementation of those decisions would be slowed.

Now, maybe I'm wrong, and they all are getting along more than I read into it. But I don't know we can say that yet.

Kacee

I would say the first level problem there was putting the wrong guy in the CEO role. The fact that he was also Chairman exacerbated that problem, mostly because he was able to hold onto power longer than he should have.

schley

Current Board

Oscar Munoz
President and Chief Executive Officer
United Airlines

Carolyn Corvi
Retired Vice President and General Manager - Airplane Programs, Boeing

Jane C. Garvey
North America Chairman, Meridiam

Todd M. Insler
Master Executive Council Chairman, Air Line Pilots Association

Walter Isaacson
President and Chief Executive Officer, The Aspen Institute

James Kennedy
Former President and Chief Executive Officer, T. Rowe Price Group, Inc.

Henry L. Meyer III
Non-Executive Chairman of the Board and Retired Chief Executive Officer, KeyCorp

Robert Milton
Former Chairman and Chief Executive Officer, ACE Aviation Holdings, Inc.

William R. Nuti
Chairman, Chief Executive Officer and President of NCR Corporation

Sito Pantoja
General Vice President Transportation Department, International Association of Machinists and Aerospace Workers

Laurence E. Simmons
President, SCF Partners

David J. Vitale
Executive Chair of Urban Partnership Bank

John H. Walker
Non-Executive Chairman, Global Brass and Copper Holdings, Inc.

James Whitehurst
President and Chief Executive Officer, Red Hat, Inc.

Charles A. Yamarone
Managing Director, Houlihan
Chairman, El Paso Electric Company

iflyjetz

The employees have been well aware of how bad Smisek and Rainey were. And as far as the BoD, it was under the control of Smisek. It took a coup in the middle of the night to get rid of Smisek - I don't blame the BoD for that.

Oscar is just starting to get the company in order and there's still a lot of work to be done, but almost all employees feel like we're on the right track and Oscar doesn't need any 'help' from a couple of hedge funds who sat on their butts while Smisek destroyed the company.

As far as Bethune, he turns 75 in August and cannot hold a seat on the BoD once he's 75. Not to mention, Bethune was the Chairman of the Board of Aloha Airlines from 2006-2008. Aloha went chap 7. I'll give Brenneman and Bonderman more credit for Continental's turnaround than Bethune because his performance at Aloha proves he's not as good as his PR machine.

The BEST course of action is for Altimeter and PAR to stop distracting Oscar and let him concentrate on turning around the company so that we provide the best service to customers once again.

helvetic

http://www.forbes.com/sites/danielre...ited-airlines/

I'm curious if anyone has some commentary regarding the proxy fight within UA's shareholders, and the implications it may have for customers.

FBWFTW

Funny you should post this-I was JUST reading a bunch of articles on exactly how UA has been trying to turn around and how they got into the mess they're in and one linked to the MP forum.

It seems that these hedge funders don't have enough (~7.1%) pull just yet to install their guy Bethune-who did wonders for pmCO apparently and was beloved by employees and customers alike. If he can help Mr. Munoz I'd say go for it! However, since he's being put up by hedge funders, I wonder just how good it would be for passenger improvements-the stroopwaffels and meal/Pax comfort type improvements could potentially be the first casualty of a Chairman with a mandate to increase the stock price.

bocastephen

Some names I would like to see on the board, although this list violates my rule about having a majority of the Board aviation-centric, but this would represent a collection of people who understand the value of a successful service business and can balance the needs of customers, employees, vendors, and investors:

Gordon Bethune - although he is now somewhat tainted by these investors

Alan Mulally

Jack Welch

James Collins

Indra Nooyi

Craig Jelinek

Danny Wegman

Bob Iger

JBord

So you're generally a backer of the hedge funds position, except you want to keep Oscar on the board? And you want all 3 of the brand new appointees gone?

I don't think UA needs to clean house. The board doesn't have as much power as many here think. Their job is to represent investors and give Oscar advice. Things seemed to be turning around with the current board and Oscar as CEO, indicating to me that the main problem was Smisek rather than the board.

bocastephen

No, I am not definitely not aligned with the goals of this hedge fund group - however, I've been harshly critical of the board since the merger (and of the CO board prior to it), and have often pointed out that most of the board members don't have a merry clue about the airline business and offer zero value except to act as gum-flappers egging on Smisek about profits and performance. It was the CO board who pressured Larry K into a merger he knew beforehand was destined to fail, and it was the board that fired Larry and hired Smisek to drive the merger regardless of the fallout.

Smisek wasn't Smisek in a vacuum - he was enabled by many of the people on the list above, and many of these people are architects in the resulting performance and service problems that crippled UA post-merger.

These are the same people who recently told Oscar to get his behind back into the office immediately or face termination and lose much of his retirement benefits....a charming message to send to someone still recovering from a major life-threatening illness who should be returning to work in phases, not all in one shot.

I think they are tolerating Oscar's initiatives based on his promise that it will improve the overall picture, including profitability - however if it doesn't work as expected, or fast enough, he will be out the door.

In short, the board was *always* the problem - most of them need to go, but not for the reasons presented by the hedge fund investors.

Kacee

Given that Oscar was on that board since the merger (and CO's board since 2004), it would be odd to blame the prior board for Smisek while at the same time welcoming Oscar as savior.

I would say that the Board has more significant duties than just to "represent shareholders" and give advice, particularly the members of the audit committee. But it is unquestionably management, not the board, which is responsible for both setting and executing strategy as well as managing day to day ops.