In 1999, Coca-Cola Co.’s CEO, Douglas Ivester, handpicked successor to popular Roberto Goizueta, was surprised in a Chicago airport by two members of the flagging company’s board of directors. According to the directors, Ivester’s hardhanded tactics with local bottlers and European regulators had alienated business partners and shareholders and left him with a reputation for not listening to the board. Mistakenly believing that the two directors spoke for the entire board, Ivester abruptly resigned. Shares of Coke fell 12% in two days as the board and investors struggled to make sense of what had happened. The incident would affect the company for years, and Coca-Cola would have three CEOs from 1997 to 2004.1 Certainly conflict is inevitable in any organization, but, with the right approach in place, boards can greatly increase the opportunity to resolve disagreements before they get a chance to get out of control.
Given the high stakes involved, it is important that boards use a comprehensive approach to specify roles, policies and procedures for resolving the routine disagreements that arise in the course of providing oversight. Boards using a systemic approach may find that not only will they resolve disputes more effectively, but they will also enhance their collaborative problem-solving and decision-making capabilities.2 Most of the time, boards do a pretty good job of talking things... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
