Kroger Alum Sargent Joins Its Board

Discussion
Dec 12, 2006

By George Anderson


The newest member of Kroger’s board of directors is no stranger to the company.


Ron Sargent, the chairman and CEO of Staples, spent 10 years working for Kroger in a variety of positions before moving to the office supply chain as its vice president of operations.


He steadily climbed the Staples corporate ladder from the time he joined the company in 1989. He was named CEO of the company in 2002 and was elected chairman in March 2005, replacing company founder Tom Stemberg.


Mr. Sargent currently also serves on the boards at Aramark, Mattel and The Yankee Candle Company in addition to his duties at Staples. His term on the Kroger board will last until June 2007 when he will stand for reelection.


Discussion Questions: What benefit or detriment to Kroger is there having an executive from another retail company on its board of directors? Separately,
do you see a problem when an individual serves as a director on five different company boards as is the case with Ron Sargent?

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4 Comments on "Kroger Alum Sargent Joins Its Board"


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B Chris Schwartz
Guest
B Chris Schwartz
15 years 5 months ago
A well seasoned senior executive can serve on multiple boards and be very effective if they follow proven techniques in keeping up-to-date on the companies they serve and the industries that they compete within. 1. You need a strong administrative assistant to maintain up-to-date files on each company with all of the public and non public information they supply. 2. A standard report format has to be developed between the executive and his/her admin. person to allow the timely posting of information in a format that is second nature to the Board Member. 3. Prior to a meeting or phone session, the files have to be scanned and a review done of the timely facts that are known. 4. The Board Member has to have a sense of where/how they can contribute. This is not a lazy posting; it is an active role that requires a keen sense of responsibility and understanding between the CEO/Chairman and the Board Member of what role the member is to play and why. 5. Time is precious. The ability… Read more »
Gene Hoffman
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Gene Hoffman
15 years 5 months ago
The true purpose of a board member is to be steadfastly objective in a very subjective environment. But how many directors want to operate with that mindset? That’s a tall order when directors are selected to join the “fraternity” by the company CEO, many of whom usually expect more support than oversight. I have been on several boards including Kroger and have seen – and felt – this condition in operation. When I served on a tobacco company board I used to sit through emphatic lectures each quarter from a “hired” doctor who came in to tell us how tobacco wasn’t harmful at all to users. I used to regularly challenge his “facts” until I was not placed up for re-election to that board. So, to me at least, so much for expectations for objective oversight from directors. As for Mr. Sergeant who will now serve on the Kroger board, as well as on four others, it is assumed that someone with his experience and success will be a constructive director for Kroger. I believe… Read more »
David Livingston
Guest
15 years 5 months ago

Sitting on 5 boards is not really an issue but it depends on how active a person is on those boards. Do they attend regular meetings make decisions or are they just a prop to impress stockholders and Wall Street?

Generally board members are nominated because they will rubber stamp the agenda of the CEO and give him a big salary and bonus. I think it would be naive to think otherwise.

Mark Lilien
Guest
15 years 5 months ago

Board members, like any employees, benefit from a variety of experiences. The problem: where to draw the line. For some people, serving on 2 boards is too many. For others, 5 may be fine. Furthermore, there are boards who won’t tolerate active members, since what they want are passive cronies. Those people don’t need to limit their board memberships.

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