General Electric has nominated three new directors to beef up its turnaround team, including the former head of the Financial Accounting Standards Board and the former CFO of AT&T.
The giant conglomerate is in the midst of a restructuring as it attempts to restore investor confidence. GE stock dropped 45% in 2017 and, according to The Wall Street Journal, the decline of the company has prompted “investors and analysts to question the board’s oversight.”
On Monday, GE announced an overhaul of the board that includes the removal of several long-serving directors and the nominations of three outsiders — Leslie Seidman, a former JPMorgan Vice President and FASB chairman; Thomas Horton, former CEO of American Airlines’ holding company and finance chief of AT&T; and former Danaher CEO Lawrence Culp.
“We are adding proven world-class expertise in capital allocation, aviation, accounting and financial reporting,” GE Lead Director Jack Brennan said in a news release.
“The new board is unified in its mission to work with [CEO] John Flannery and GE’s senior leadership team to drive the company’s focus on superior performance and to maximize the long-term value of GE’s world-class businesses for our shareowners,” he added.
The three new board candidates all have accounting and finance experience, with Seidman being nicknamed “Loophole Leslie” by opponents for her bank-friendly approach to regulation as FASB head after the 2008 financial crash.
GE has said a restatement of its 2016 and 2017 results due to the new revenue recognition standard would likely lower reported earnings.
Analysts said the nominations to the board — to be cut to 12 directors from a previous 18 and voted on by shareholders in April — would do little to distract from the problems facing GE.
“This remains a ‘liability story’,” JP Morgan analyst Stephen Tusa said. “We see weak core free cash flow as too structurally challenged to de-lever the balance sheet, leaving the company prone to risks around further contingent liabilities, and/or capital markets volatility.”