Combined with the prior departure of Google CEO Dr. Eric Schmidt last year, the recent death of Apple director Jerome York has left the company with one of the smallest boards of directors of any Fortune 500 company, the Wall Street Journal reports. Following York’s passing, Apple’s board now has only six members, including CEO Steve Jobs, who is described as a dominating force in the group. Citing unnamed corporate board experts, the report states that the shrinkage is likely to result in directors having to perform more duties than they can handle, and also causes problems for the board’s audit committee, which Apple’s own rules state must have at least three members.
The audit committee was comprised of York, former Intuit Inc. CEO William Campbell and former Genentech Inc. CEO Arthur Levinson. While the company could ask one of its other three independent directors to fill the gap, such a move is unlikely, the Journal says, based on required financial expertise absent from these individuals. According to the report, shareholders have long wanted Apple’s directors to be more independent of Jobs, a move which would help the board challenge the CEO when necessary. A smaller board, packed with Jobs admirers, is considered less likely to expand the company’s options.
Roderick Hills, a former Securities and Exchange Commission chairman, said York’s successor should have “sufficient stature and importance to take the CEO on,” adding that the next audit committee chairman should be ready to resign if things aren’t done correctly; York himself said in an interview before his death that he wished he had resigned after learning about the company’s prior concealment of Jobs’ health concerns.