Trouble in the “magic Kingdom”- Governance Problems at Disney
Trouble in the “Magic Kingdom”- Governance Problems at Disney
Key Problem
The key problem of Disneys Board is the lack of independence and efficiency. And its inefficiency was due to its independence. Eisner, the CEO of Disney, is the critical factor for the problem.
Eisner rebuilt board with many his personal affiliated directors, the nepotism in board resulted in Eisner owning all the power of the company. And Eisner victimized dissenting members and kicked them out of important committees, which made the board inefficient when making strategic decisions. Because the board was almost taken over by Eisner, the other members had no more right to reject. Under the bad governance, most Disneys directors lost their independence, quality, and accountability. Besides, the Disney is so dependent on its leader, Eisner, that when facing their leave the company fails or is never able to recover. The reason is that there is no one effective succession plan for emergency and Eisner lacked this vision.
Alternative Solution
Considering the entire environments, we cannot think all the faults are resulted from Eisner. Eisners leading period is known for success in reaching high profits and search for monarchic power within the company. During this period, the company expanded the theme parks and its financial performance jumped to high level. Eisner has enough ability and experience to get the corporation out of the bad conditions. A Three Year Plan should be set:
Focus on organizational changes in side. The frequent changes of corporate officers should be stopped. It is true that a new leader not requited from within the organization will bring with new ideas and concepts. But, such a person also brings a foreign corporate culture to Disneys organization. It may lead to communication, efficiency,