Blind Spots, Biases and Other Pathologies in the Boardroom

Chapter 1

Oversight by Groups of Board Members

In January 2001, CEO of Tyco International Dennis Kozlowski received an employment contract from his board. Like many CEOs, Kozlowski had served most of his tenure (almost 8 years) without one. However, by 2000 he was asking for a contract. More specifically, he was asking for one that included a clause stating that conviction of a felony was not grounds for termination unless it was materially injurious to the company and if “three quarters of the board then voted to oust him.”¹

Although many CEOs have negotiated contracts with generous terms, it was unique to include a felony as something that would not amount to “just cause” for termination. But neither this nor the strange timing of the contract ...