Apria moves to strengthen board of directors
June 30, 2003
LAKE FOREST, Calf. - Apria, which already has one of the most respected board of directors in corporate America, made a move earlier this month to make it even better.
The company will open its nominating process for board candidates to top shareholders, a shift expected to avoid heated proxy fights, the company announced earlier this month
The HME giant said its new policy would allow stockholders owning at least 5% of its common stock - currently just one investor - to submit challengers for seats on the board of directors. The move is intended to boost shareholders' direct involvement in selecting board members at a time when investors are demanding better corporate governance, reported the Orange County Register.
''It has become painfully obvious over the past few years that corporate America must improve board-room dynamics,'' said Ralph Whitworth, Apria's chairman. ''This would allow a truly independent director to be nominated and elected.''
BusinessWeek magazine last year ranked Apria’s board as one of the best in corporate America.
While the new policy - touted by Apria as a first for a publicly traded company - is based on good intentions, some questioned the practicality of instituting a plan that could result in a hefty slate of unknown nominees, the Register reported.
Though the policy means the company's nine directors could face competition at its 2004 annual meeting, Whitworth said he doesn't expect a flood of new nominees. According to a regulatory filing that Apria gave the Securities and Exchange Commission on Wednesday, only Barclays Global Investors Ltd. would qualify, with its 5.06% stake in Apria stock.
However, Whitworth noted that the policy allows for investors to come together to form a 5% shareholder group that could submit a board challenger.