In the wake of Nortel’s accounting scandal, the company went through an extensive restructuring.
There was a lot of change – a new management team headed by CEO Mike Zafirovski, a new auditor to replace Deloitte, and an overhauled board of directors.
With Nortel’s decision to sell its $1.5-billion Metro Ethernet Network business, it’s clear the company’s in a strategic crisis. If it abandons MEN, then Nortel is making a huge bet on the enterprise space where it has been, at best, a second-tier player.
As much as Zafirovski and his senior executives have put together the strategic plan to resuscitate Nortel, a key question is what role did the board play, and how much of the blame should the 11 directors get for Nortel’s current situation.
Ultimately, the board represents the interests of shareholders so if Nortel has been headed down the wrong strategic direction over the past three years, shouldn’t they share the blame?
Wow - maybe getting some people on the board under 85 would help make NT a little more dynamic...
Kevin
MEN is better off getting far away from the current executive team based on their dismal results and decisions over the past three years
investment-banker
Z said they used an investment banker. would it be someone from morgan stanley, aig, citibank, merryl lynch or lehman. figures.
rolly reader
I once talked to a senior exec about the board after he made a presentation. His comment was that the board "are a bunch of potted plants".
bankrupt
most of them were good at bankrupting companies or running them into the ground. they get paid big bucks to just meet once in a blue moon. have no idea about the business. timeshared across other boards. some are losers with nothing else e.g. manley so being on a board look important.
30,000 employees should walk into the board room and kick each one of them out. people are stopping to work or taking it easy. so Notel or Nortanic or N*whatever is a reality.
Also not the arrogance from not accepting blame but putting it on the economy or previous health of the company. why did you hire an idiot, pay him $30million, nice perks for 2 years to do nothing.
NewBlue
"As much as Zafirovski and his senior executives have put together the strategic plan to resuscitate Nortel..."
The board has total blame. As I posted in response to an earlier blog entry, their failure wasn't necessarily in putting Mike Z in charge; it was from not removing him when it became obvious that Z's plan was failing/a failure.
The plan presented by Z that the board apparently approved should have included (if it didn't) some serious goals that would have had to be met. It should be fairly obvious to anyone who is even remotely observant that Z's plan was not working. The board either turned a blind eye to the failure of the executive team or is complicit in it. In either case, they must be held ultimately accountable.
Problem is, there is no real accountability. Everyone (including the company executives) will take their financial perks and payouts and bail, leaving 30,000 people unemployed and a once proud Canadian company in shambles.
Mickey
Isn't this the 'ol boys club that gave Owens $100K/mo pension after 18mo of asleep-at-the-switch service (before he decided to work w/ Huawei) and gave Z-man a 22% raise this year for a job well done?
Pure incompetence, one and all...
Dissappointed Shareholder
Selling MEN and giving the proceeds to Hacker in Enterprise....yep that makes a lot of sense.
Lonely Ops Guy
LOL.....You hit the nail on the head.
Another Nortel Watcher
The board is just as out of touch with the industry as Mike Z is. NONE of them have board seats because of accomplishments or vision in the industry that Nortel is a part of. Therein lies the problem. The board, like the CEO, do not have adequate background to make quality strategy or hiring decisions. Perhaps things would have gone differently if the board contained esteemed or former members of Intel, Microsoft, Wipro, etc..
I guess that means the shareholders are at fault for this mess, since they voted in the board.
Clint
Manley is a loser. This guy came on board from the lieberal party of Canada walking around the halls like he would make a difference. The liberal party did NOTHING for Nortel and having somebody like him in there, totally clueless is likely a prime reason why the BOD is out to lunch. Permanently.
How Much Blame Should the Board Get?
In the wake of Nortel’s accounting scandal, the company went through an extensive restructuring.
There was a lot of change – a new management team headed by CEO Mike Zafirovski, a new auditor to replace Deloitte, and an overhauled board of directors.
With Nortel’s decision to sell its $1.5-billion Metro Ethernet Network business, it’s clear the company’s in a strategic crisis. If it abandons MEN, then Nortel is making a huge bet on the enterprise space where it has been, at best, a second-tier player.
As much as Zafirovski and his senior executives have put together the strategic plan to resuscitate Nortel, a key question is what role did the board play, and how much of the blame should the 11 directors get for Nortel’s current situation.
Ultimately, the board represents the interests of shareholders so if Nortel has been headed down the wrong strategic direction over the past three years, shouldn’t they share the blame?
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