OFFICE DEPOT CHIEF SPEAKS UP……
OFFICE DEPOT CHIEF SPEAKS UP……
2006-01-02 at 10:18:00 am #13382
Corporate America working to fix image, Office Depot chief says
BOCA RATON – Corporate America is still paying for a few high-profile corporate scandals over the past five years even though they have largely moved through the courts, Office Depot Chairman and Chief Executive Steve Odland said………..”Once you’ve violated the public trust, it takes awhile to get it back,” Odland said. “We have a public relations job to do. We do have to mend some fences.”
Odland, who has been in charge of Delray Beach-based Office Depot for eight months, spoke to a roomful of executives at a meeting of the Florida chapter of National Association of Corporate Directors at the Boca Raton Resort and Club. The group meets several times a year to discuss corporate governance and ethics issues.
Odland thinks that while the boardroom scandals at Tyco International, Adelphia, WorldCom and Enron have soiled the image of the nation’s public companies, most firms have made the necessary changes to become good corporate citizens.
Citing statistics from the Business Roundtable, a group of 160 chief executives of the largest U.S. firms, Odland said eight of 10 of its members have boards with independent directors holding three-quarters of the seats. Nine of 10 members have established procedures for communicating with shareholders. Half of its members have independent chairmen or lead directors, and all of them hold closed meetings without the chief executive present.
Odland acknowledged that many of these changes were prompted by the Sarbanes-Oxley Act, a law aimed at greater public disclosure and stricter accounting controls. But he was concerned about the law’s “unintended consequences,” including shareholder lawsuits when stock prices fall sharply, and the high cost of applying the law.
“We have to be careful not to criminalize honest mistakes,” he said. “While nobody likes to see investors lose money, without that possibility, nobody could make money.”
Joe O’Donnell, chief executive of Boca Raton-based Artesyn Technologies, agreed that the law was necessary to ensure more transparency in corporate accounting but said it has become a costly measure to fulfill each year.
“The intent of Sarbanes-Oxley was completely appropriate, but the details have been overdone,” O’Donnell said.
Odland is no lightweight in the ethics arena. He has been at the forefront of corporate governance since his days at AutoZone, where he replaced a board dominated by insiders with nine independent directors and himself.
Office Depot, the office supply giant, requires ethics training, including a test that quizzes employees on how to act in workplace situations.
It staffs an ethics hot line with an independent contractor.
In August, the company amended its corporate governance policy to include a provision requiring board members to resign when they receive a “withhold” or “against” vote from a majority of shareholders.
“I go out and tell employees to do the right thing,” Odland said. “If something bothers you, don’t do it.”