By Joann S. Lublin
An outside director's abrupt exit from Quiksilver Inc. grew out
of an unusual corporate-governance spat that sheds some light on
how company boards fire chief executives.
Elizabeth Dolan, chief marketing officer of Fox International
Channels, resigned from the board of the outdoor-apparel retailer,
saying that the company board had excluded her from crucial board
discussions and votes, according to her resignation letter made
public Wednesday.
In an interview, Ms. Dolan claimed she was kept out of all
discussions to oust Quiksilver CEO Andy Mooney this spring because
of concerns that her friendship and shared work history at Nike
Inc. with Mr. Mooney would cloud her judgment in weighing his
dismissal.
Quiksilver declined to comment about confidential board matters,
an outside spokesman said. Several board members didn't respond to
requests for comment.
This spring, Quiksilver replaced Mr. Mooney as CEO with Pierre
Agnes, its president since November, after an internal review that
resulted in the company correcting errors as to when revenue was
recognized and impairment charges related to the sale of its equity
stake in Surfdome Shop Ltd. Quiksilver co-founder Bob McKnight took
over the chairmanship from Mr. Mooney.
For something as critical as a CEO's ouster, "all the directors
should be notified," Ms. Dolan said Thursday. "This is very poor
governance."
Since 2004, companies have been required to disclose the
resignation letters when a board member resigns or declines to seek
re-election because of a disagreement. But such disclosures are
rare because directors are reluctant to breach the wall of silence
about boardroom activity.
The Quiksilver situation is especially notable, given Ms.
Dolan's claim that "a duly elected director was not allowed to cast
a vote for or against the CEO," observed Michael Useem, a professor
at University of Pennsylvania's Wharton School who specializes in
governance and leadership.
Before Ms. Dolan joined Quiksilver's board last year as its only
female director, she said she had assured directors that her ties
with Mr. Mooney wouldn't prevent her from executing her duties as a
director including terminating his employment.
But when the concerns emerged about Mr. Mooney, her fellow board
members didn't loop her in, according to Ms. Dolan.
It started at a key March 16 board meeting that Ms. Dolan was
unable to attend because of a business trip. During a private
session afterward, independent directors started to discuss ousting
Mr. Mooney, she said she later learned.
In the days afterward, multiple calls were held among
Quiksilver's other independent directors to lay the groundwork for
the dismissal and Ms. Dolan said she wasn't invited to join those
calls.
Ms. Dolan said the plan to oust Mr. Mooney culminated on a board
conference call on March 26, when she was on an airplane. Two other
directors weren't on the call and voted ahead of time, an option
that wasn't offered to Ms. Dolan, who learned about the vote only
after it occurred, she said.
Fellow director Andrew Sweet told Ms. Dolan that board members
excluded her from multiple discussions before the final vote
because they saw her as conflicted, Ms. Dolan said.
According to her, Mr. Sweet explained that the board believed it
would be awkward for her to keep a secret from Mr. Mooney.
While Mr. Sweet couldn't be reached directly, the Quiksilver
spokesman said the director declined to comment.
Ms. Dolan declined to say whether she would have supported Mr.
Mooney's ouster. "They never let me know," Ms. Dolan said. "That
was the breach of trust."
Ms. Dolan worked for Nike between 1988 and 1997, serving as its
head of global marketing during her final three years. She joined
the 21st Century Fox unit in 2011 and Quiksilver was her first
stint as a public company board member.
21st Century Fox and News Corp, owner of The Wall Street Journal
and Dow Jones Newswires, were part of the same company until
mid-2013.
Mr. Mooney's 20-year Nike career ended in 2000. Earlier this
week, he became CEO of Fender Musical Instruments Corp., a guitar
maker. He was unavailable for comment.
Write to Joann S. Lublin at joann.lublin@wsj.com
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