Aerojet crashes into board dysfunction

Aerojet Rocketdyne Holdings

01/07/2022 15:54

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    NEW YORK, July 1 (Reuters Breakingviews) - A company whose
chief executive also takes the role of board chair can be
criticized for poor corporate governance. But Aerojet Rocketdyne
 AJRD.N , a $3 billion U.S. defense firm, shows splitting roles
isn’t a cure for board dysfunction. 
    The rift between Chief Executive Eileen Drake and Executive
Chairman Warren Lichtenstein started over a now-defunct sale to
Lockheed Martin  LMT.N   urn:newsml:reuters.com:*:nL4N2UP3DX. He acknowledged he tried
to get her to change deal terms by offering to buy her a
handbag. Both put forward separate slates of board directors.
Then Lichtenstein took Drake to court for her use of corporate
resources to help fight him. 
    Lockheed dropped its bid, but the court case forced Aerojet
to retract a press release that undermined Lichtenstein. Then on
Thursday https://www.prnewswire.com/news-releases/aerojet-rocketdyne-shareholders-elect-the-entire-independent-slate-led-by-ceo-eileen-drake-301579064.html,
 shareholders sided with Drake. Board members disagreeing about
the direction of a firm isn’t necessarily a bad thing. But the
company’s shares are down 16% in the past year while Northrop
Grumman  NOC.N  is up 30%. The Aerojet fight has so far produced
only a distraction. (By Lauren Silva Laughlin)    
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 (Editing by Gina Chon and Amanda Gomez)
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