Visteon Corp. expects to flesh out its board of directors with three new appointments by early 2001.
Since its spinoff from Ford Motor Co. in late June, the Dearborn, Mich., supplier has been slow to fill all eight to 10 of its board seats. Just prior to its independence, three outsiders were named to join Chairman Peter Pestillo as directors, setting up a four-member board for the world's second-largest auto parts maker.
The director search has 'been going a little more slowly than we had hoped,' said Susan Skerker, Visteon senior vice president of business strategy and corporate relations. 'But we hope to make up lost ground pretty soon.'
At least three additional board members are being considered, Skerker said. One to three more board appointments could follow before Visteon's planned annual meeting in May, when shareholders will be asked to approve the choices. The company is seeking outside directors with strengths in finance, technology and manufacturing.
Visteon's existing outside directors have expertise in manufacturing, strategic planning and public policy. Those directors are:
William Gray III, a former Democratic congressman and current president and CEO of the United Negro College Fund.
Robert Teeter, a former Bush administration pollster who is a business consultant and president of Coldwater Corp., a business management and political polling company.
Robert Jenkins, longtime manufacturing executive and retired chairman of Sundstrand Corp., an aerospace supplier owned by United Technologies Corp.
Gray reportedly is being considered for secretary of education in President-elect George W. Bush's Cabinet. If he takes that post, Visteon will have one more director slot open.
Even when the board is fully appointed, Pestillo will be the only Visteon executive among the members.
'We look at (outside directors) as bringing a very valued judgment and set of eyes to what we're doing,' Skerker said.
Rival Delphi Automotive Systems Corp. has a 12-member board of directors that includes three company executives: Chairman J.T. Battenberg III, CFO Alan Dawes and Executive Vice President Don Runkle.
In corporate governance circles, such a structure is highly regarded because it generally fosters stronger oversight of a CEO's actions and the company's business moves. But delays in filling director positions - inside or outside - also pose concerns.
'Clearly, not having a full board presents some risk to the company in terms of its decision-making ability, approval ability, and it also creates some risk to the shareholders because the board is their primary source of protection,' said Paul Lapides, director of the Corporate Governance Center at Kennesaw State University near Atlanta.
Though director seats ideally should be filled soon after a board's creation, it's not uncommon for new companies to lag behind as they focus on daily operation or leadership issues, Lapides said. That has certainly been the case with Visteon.
In September, the company hired Michael Johnston as president and COO. The former Johnson Controls Inc. executive has many challenges ahead. Visteon's profit warning in early December - triggered by auto production cuts - was accompanied by a hiring freeze, capital expenditure reductions, discretionary spending cuts and production overtime elimination.
Johnston is conducting a study, to be completed in January, to reduce overhead and possibly jobs.