ABB- Corporate Governance During a Turnaround

Presented by:

Hesham Alkheraif and Abdullah Alkheraif

�  Transparency

�  Cooperation

�  Communication

Takeaways

Background �  ABB is an industry leader in power and automation

technology

�  Merger of ASEA and Brown Boveri (ABB)

�  2001: Dormann became chairman and in the next year he became a CEO

Challenges

�  1997 Asia financial crisis

�  Close to collapse

�  Former CEOs issues

�  Share price

How Dormann thinks ?

�  Past

�  Present

�  Future

Changes in the board & the executive committee

Typical Board Tasks

�  Monitoring and supervising

�  Selecting, evaluating, and coaching top management

�  Substantive input in the corporate evolution

Phase 1

�  The formation of the strategy committee.

�  “Back-to-basic”

�  Timeline of 18 months

Changes in the board & the executive committee

Phase 2

�  The strategy committee in action

�  Communication

�  Weekly letter from the CEO

�  Sharing goals

Phase 3

�  Leadership in a decentralized governance structure

�  Transparency

�  Performance

As Result

�  2003: 18.78 Billion of revenue with 105,000 employees

�  2004: he stepped down of CEO and back to be chairman and Fred Kindle will become the new CEO

Takeaways

�  Transparency

�  Cooperation

�  Communication

Questions