There's no question the board shares responsibility for the fact that the transition was not a good one,'' says Nicholas J. Nicholas Jr., the only director who would comment. During Thoman's troubled tenure, the board seemed to harbor an unspoken allegiance to a former CEO, standing by while retired CEO Paul A. Allaire, who remained as chairman, overshadowed his successor. Experts are divided on whether outgoing CEOs should stay on. But it's clear in Allaire's case that his influence continued to permeate management as well as the board. The board's failure on succession was compounded by a host of governance problems.
Experts point first to the board's composition.
In addition to lacking directors with technology credentials, Xerox has too many insiders, critics say. Including Vernon E. Jordan Jr., whose law firm was retained by Xerox in 1999, insiders account for 5 of 15 seats. Director ties to Xerox may have prevented them from heading off the management fiasco. Clearly, many were too busy. Xerox President and Chief Operating Officer Anne M. Mulcahy, who joined the board after Thoman's ouster, sits on four boards.