American Express - Corporate Governance Case

2005 Words Aug 28th, 2011 9 Pages
American Express
Chairman/CEO Influence and Outcomes

7/30/2011

Table of Contents

American Express Overview 3

James D. Robinson 3

Success and Failures of Robinson 3

Board Of Directors 4

Decisions Required 4

Candidates for CEO Position 5

Robinson’s Strategy 5

Decisions Of The Board 5

Problems Faced By American Express 6

Solution 7

Lessons Learnt 7

References 7

American Express Overview

American Express Company (American Express), incorporated in 1965, is a global service company The Company’s principal products and services are charge and credit payment card products and travel-related services offered to consumers and businesses around the world. American Express Company and its principal
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• An innovative product called ‘Optima’ cards caused $112m loss to AmEx.

• Shearson stock fell down to 1/3rd, and AmEx had to buy all its remaining shares. Shearson’s CEO Mr. Peter Cohen was fired.

Board Of Directors

In 1992, American Express had one of the largest board in USA. It contained 19 board members and only three of these were company employees. With majority as independent and non-executive directors, AmEx’s board was also an admirable one. Some of the Directors on the board were:

• Mr. Rawleigh Warner and Mr. Richard Furlaud - 2 most senior board members. (These two members joind board in 1972, before Robinson was appointed as CEO/Chiarman.)

• Mr. Howard Clark (Robinson’s predecessor as CEO), was not a board member but was a regular attendee of meetings.

• Drew Lewis, CEO of Union Pacific .

• Henry Kissinger, the former secretary of state.

• F. Ross Johnson, the impetuous ex-CEO of RJR Nabisco.

• Vernon Jordan, the civil-rights lawyer.

Decisions Required

Warner brought to light evidences of setbacks that had befallen AmEx under Robinson’s leadership. He pointed out many events proving this, which All this had a cost of billions of dollars to shareholders: • Attempted takeover of Philadelphia Life Insurance Co. in 1977. • Aborted mergers • Problems at Shearson • episodes involving Safra and RJR Nabisco • the losses from Optima • the
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