William J. Holstein

What Are They Doing to GM’s Board?
APRIL 14--I've been quiet lately about General Motors, but the latest board appointment gets me. The government's auto czar, Steve Rattner, stacked the board with telecommunications and private equity people, including Chairman and CEO Ed Whitacre. The lead director is now Pat Russo, former CEO of Lucent and former co-CEO of Alcatel. All these people may be quite accomplished in their own professional spaces, but they know nothing about the automobile business. What GM needs on the board are people who understand innovation, manufacturing, marketing, global markets and the like.

Now we discover that the board has picked Cynthia Telles, a California psychiatry professor and former Los Angeles City Commissioner, to serve as a GM director. This is a diversity hire because Ms. Telles is Hispanic.

I understand the need for diversity in all aspects of how a corporation runs itself, but this is just nuts. A psychiatry professor? What possible contribution can she make? Is she going to offer psychotherapy to uphappy directors?

I regret to conclude that this is an example of mis-management. The great fear I have is that this board will force management down the wrong path--of being politically correct perhaps but not fundamentally focused on the competitive challenges that lie ahead.