During a turnaround at ABB, CEO Dormann took several steps to reform corporate governance including forming a strategy committee to develop a back-to-basics plan over 18 months, increasing transparency through a weekly CEO letter and sharing goals, and decentralizing governance while maintaining transparency and focus on performance. These reforms helped lead ABB to recover from near collapse, with revenue growing to $18.78 billion and 105,000 employees by 2003, after which Dormann stepped down as CEO but remained chairman.

1. ABB- Corporate Governance
During a Turnaround
Presented by:
Hesham Alkheraif and Abdullah Alkheraif

2. — Transparency
— Cooperation
— Communication
Takeaways

3. 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

4. Challenges
— 1997 Asia financial crisis
— Close to collapse
— Former CEOs issues
— Share price

5. How Dormann thinks ?
— Past
— Present
— Future

6. Changes in the board & the
executive committee

7. Typical Board Tasks
— Monitoring and supervising
— Selecting, evaluating, and coaching top
management
— Substantive input in the corporate evolution

8. Phase 1
— The formation of the strategy committee.
— “Back-to-basic”
— Timeline of 18 months

9. Changes in the board & the
executive committee

10. Phase 2
— The strategy committee in action
— Communication
— Weekly letter from the CEO
— Sharing goals

11. Phase 3
— Leadership in a decentralized governance structure
— Transparency
— Performance

12. 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

13. Takeaways
— Transparency
— Cooperation
— Communication

14. Questions