When it comes to failures and strategic mistakes at Sprint-Nextel (NYSE: S), the spotlight has focused mainly on CEO Dan Hesse. He has held the reins at the nation’s third largest wireless company since December 2007. And he was in the news recently when he agreed to alter his compensation package after objections from a number of shareholders.
James H. Hance, Jr., Sprint’s chairman, is as much to blame for the company’s problems as Hesse. He has been on the board since 2005. That means he helped pick Hesse. It also means he has been part of all board discussions about how Sprint might turnaround its loss of market share to AT&T (NYSE: T) and Verizon Wireless. Hance was also a critical player in the board’s decision to block an $8 billion deal to merge with MetroPCS (NYSE: PCS), which Hesse has championed.
Hance is poorly qualified to lead the Sprint board. He is what many corporate governance experts call a “serial board member.” He sits on the boards of directors of Cousins Properties (NYSE: CUZ), Morgan Stanley (NYSE: MS), Ford Motor (NYSE: F) and Duke Energy (NYSE: DUK). Shares in Duke are up 15% over the last year, but those in Morgan Stanley are off 35% and Ford shares are down 30%. Shares in Cousins are off 10% during that period. And Sprint’s shares are 55% lower over the same period, as well as off by nearly 90% since Hance joined the board.
Hance ought to have his hands full with Sprint. The balance of his board work can only be a distraction.
Sprint has not been a viable standalone company for many years. The board should have played the most significant part in remedying that. Sprint has needed a marriage or sale for some time. Hance clearly has not provided leadership as Sprint tries to get a reasonable return to shareholders via the few means available.
Hesse is in the headlines every time Sprint’s fortunes falter. Hance should be there, too.
Douglas A. McIntyre