General Electric announced as part of its investor update last week that it would shrink its board from its current 18 members to 12 by April of next year, while adding three new directors with “relevant industry experience.”
That means nine of the board’s current directors will leave. The downsizing would make GE’s board closer in size to other large companies, and aims for closely matching board makeup to new CEO John Flannery’s turnaround plan for the troubled giant.
Flannery has said he will turn things around by focusing on aviation, power and health care. That means less attention on businesses including oil and gas, transportation and lighting. That makes former ConocoPhillips CEO James J. Mulva a likely candidate to leave the board, according to the Wall Street Journal. Other possible departures include Andrea Jung and Shelly Lazarus, who are nearing planned retirement dates.
Flannery has told CNBC that former Vanguard CEO John Brennan will not leave. According to the Journal, recent board addition Ed Garden of the Trian Partners hedge fund will also keep his seat.
Choices about both departing and new directors will be made by the current board. Flannery has said the three new directors should have a “digital and technology orientation,” despite some retrenchment in GE’s once-sprawling digital ambitions.
The planned board turnover drives home just how drastically things are changing as General Electric struggles for relevance. GE’s stock has had an awful year, capped off by last month’s big earnings miss and last week’s announcement that the company would cut its vaunted dividend in half to fund restructuring. There’s now talk that GE could be removed from the Dow Jones Industrial Average, a potentially bleak development for a company that has embodied American innovation since its founding more than 125 years ago.