Nonetheless, the proxy endorses Kelly’s re-election, noting “his role and his experience enable him to bring invaluable operational, financial, regulatory, governance, and cultural perspectives to the board. Southwest Airlines Chair and Former CEO Gary Kelly Getty Images It’s complicated, but we definitely have some good opportunities there.” The system collapse followed 15 months later. It was Kelly, in an October 2021 CNBC television interview, who characterized the airline’s technology as “wonderful,” but also acknowledged, “There’s technology that’s required to reschedule our flight crews, so we have flight attendants, we have pilots, we have airplanes and once it gets behind, it’s just difficult to get that back together so I think the opportunity is to improve on that process. Six directors have served for over a decade, including its chair, former CEO Gary Kelly. Even with the addition of three new board members, the average age of Southwest’s board will be over 68. Many boards are adding younger members with credible tech-era leadership experience. Here are four proxy statement findings that portend upped digital era danger:įirst, technology is central to strategy acceleration. None is addressed by the operational plan and rubber-stamped leadership renewal. We’ll look at all options." Turbulence aheadĪs discussed in a previous article, the airline’s meltdown was precipitated by commonly overlooked digital era governance gaps: (1) l eaders underestimate the real business cost of technical debt (2) “trust, but don’t verify” management weakens business resilience and (3) executive resistance to bad news is most enterprises’ fatal flaw. Past that, we have a duty to our customers, we have a duty to our shareholders to keep growing here. Jordan told The Dallas Morning News, “To me, job one is ensuring our future for a long time at Love Field. Southwest had far better governance reboot options – it chose none of them. Omitted from the press release, but included in the proxy statement, is that incumbent director Ron Ricks, Southwest’s former legal and regulatory chief, will serve as committee chair - signaling its likely aim and attention.īoards struggle to act strategically when burdened with operational oversight, as such myopic distractions undermine today’s increasingly complex governance needs. The only governance suggestion is the formation a board-level “operations review committee to oversee management’s review of the disruption and action planning.” The language implies a short-lived and narrow focus. Not surprisingly, the resulting action items are all operationally-focused.
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