Viacom Inc. (NASDAQ:VIAB) is pursuing the idea of appointing a lead independent director as the media company faces questions regarding its corporate governance, according to Reuters based on information from people familiar with the matter.
The sources indicated that the media company will likely choose one of its current Board members to serve as independent director.
More than a month ago, the Board of Directors of Viacom appointed its CEO Philippe Dauman to also assume the position of Executive Chairman, which was vacated by Sumner Redstone, the 92-year-old media tycoon, who co-founded the company.
Shari Redstone, the Non-Executive Vice Chairman and daughter of the media tycoon opposed the appointment of Dauman to replace his father. She previously explained, “It is my firm belief that whomever may succeed my father as Chair at each company should be someone who is not a Trustee of my father’s trust or otherwise intertwined in Redstone family matters, but rather a leader with an independent voice.”
Viacom has 7 directors classified as independent
Viacom Inc (VIAB.O) is looking to name a lead independent director, most likely one of its existing board members, and could make an announcement within the next few days, two sources familiar with the situation told Reuters, as the media company faces investor questions about its corporate governance.
Currently, there are seven directors identified as independent on the company’s Board including Frederic Salerno, the former vice chairman and chief financial officer at Verizon Communications (NYSE:VZ) and chair of the Board’s compensation committee, Charles Phillips, the chairman of Infor and also a member of Viacom’s compensation committee.
Standard corporate governance practice
Kevin McManus, vice president at Egan Jones, an independent proxy adviser, commented, “It has become standard corporate governance practice for companies that have combined the CEO and chair position to have a lead independent director.”
McManus explained that the responsibility of an independent director is to help the Board handle sensitive issues such as discussing the compensation and performance of Dauman—a situation where he is conflicted.
The two major shareholder advisory firms, Glass Lewis and Institutional Shareholder Services (ISS) criticized Viacom’s corporate governance, its decision to give the role of Executive Chairman to Dauman, and his high compensation package.
