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TIME - Man of the Year
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CompactPublishing-TimeMagazine-TimeManOfTheYear-Win31MSDOS.iso
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010493
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01049911.000
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1993-04-08
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THE WEEK, Page 15BUSINESSWanted: Outsiders
Under pressure from shareholders, Time Warner downsizes its
board
Public dissatisfaction with corporate governance of late has
engendered a movement toward more independent boards with fewer
so-called inside directors. Yet the jumbo-size board that
resulted from the merger of Time Inc. with Warner Communications
in 1989 was heavy with company executives. To streamline the
unwieldy group, Time Warner said it would reduce its board from
21 members to 12 and cut the number of insiders from six to two.
The board agreed on the plan, which had been under consideration
for months, just one day before the death of Time Warner
chairman and co-chief executive Steve Ross.
The consolidation was a direct result of pressure from
shareholder groups like the California Public Employees
Retirement System, which was troubled by the company's high debt
and by such actions as an aborted 1991 stock-rights offering.
Many suspected that the board was merely rubber-stamping such
decisions. Now it is up to CEO Gerald Levin to consolidate the
benefits of the merger.