Columnist: Chelsea Clinton 'Didn't Earn' IAC Board Seat, But Could Still Add Value
The board of Barry Diller's Web firm is filled with his friends, and "the real question is whether Ms. Clinton can act independently," a New York Times commentator writes.
NEW YORK – Barry Diller’s IAC last week added Chelsea Clinton, 31, to its board of directors in a move seen by some as a celebrity appointment.
“The real question is whether Ms. Clinton can act independently and provide value to the IAC board,” Steven Davidoff, a commentator for the New York Times’ DealBook, wrote late Tuesday. “While there are many doubts on that score - and while Ms. Clinton clearly did not earn this position - she can still demonstrate that she is up to the task.”
IAC said that her “skills and background complement the existing areas of expertise of other board members.” Clinton will be paid about $300,000 a year in cash and incentive stock awards.
“Ms. Clinton has this position only because she is the daughter of former President Bill Clinton and Hillary Rodham Clinton, the current secretary of state,” the columnist argued. “This is clearly an appointment made because of who she is, not what she has done, one that defies American conceptions of meritocracy.“
Davidoff also highlighted that IAC’s board is full of Diller friends, including former Walt Disney boss Michael Eisner, Warner Music chairman Edgar Bronfman Jr. and Diller’s stepson. And he mentioned that corporate governance research firm GovernanceMetrics International has cited governance concerns about IAC’s board.
Still, the DealBook commentator acknowledged that Clinton “appears to be a smart, capable individual“ and added that “while the reasons for the appointment are suspect, that does not mean Ms. Clinton cannot be a good, even great, board member.”
Davidoff also cited a recent study entitled “Reaching for the Stars: The Appointment of Celebrities to Corporate Boards” that examined 700 celebrities who have served on corporate boards from 1985 through 2006. The authors found that celebrity appointments increased the value of a company over as long as a three-year period.
“The authors postulate that celebrity directors create value by enhancing a company’s prestige and visibility and by using their connections to help the company,” he said. “But for a company like IAC, with its grab bag of Web businesses, it is hard to see what prestige or networking value Ms. Clinton can bring.”
Davidoff concluded by saying that Clinton can show through her actions that she can be an independent voice and make valuable contributions to IAC. His message to her: “Go for it, Chelsea.”