Fine Print - December 2010

Inductive reasoning
By G.D. Gearino

Confession: I didn’t know — or at best, had long forgotten — that there is a North Carolina Business Hall of Fame. The list of things I don’t know is long and seemingly grows longer by the day, but this is something I should have been aware of (considering what I do for a living). My feeble excuse is that controversy was never attached to inductions, nor am I related to anyone so honored and thus had cause to be tuned in. Ipso facto, ignorance flourished.

Well, I’m ignorant no more. Controversy finally caught up to the Hall of Fame. The worthiness of Winston-Salem banker Bud Baker, named to the 2010 class of laureates, has been called into question. It strikes me as a minor flap. But now that I know about the hall’s existence, I’ll put forward a name for the 2011 crop of inductees.

Baker was CEO of Wachovia Corp. for most of the 1990s and also served as chairman the last five years of his career, which ended in 2003. If you know your history of Tar Heel banking, you’ll recall that it was on his watch that Wachovia ceased to exist in every way except name. In 2001, it merged with First Union Corp., but as is the case with most “mergers,” it was a takeover dressed up as a marriage. Winston-Salem lost a headquarters, and many people lost jobs as Wachovia’s operations were folded into First Union’s Charlotte-based empire. But First Union, a bank with a hustler’s reputation, had married up, so it took the bride’s name. That sheen of respectability did it no good: Just seven years later, First Union-turned-Wachovia hustled itself into near failure and takeover. And what of Baker, who set that slow-motion collapse into action? He gets into the North Carolina Business Hall of Fame.

That set off howls of outrage. One reader, for instance, wrote me to ask, “Will Ken Thompson soon be inducted into this same Hall of Fame because of similar achievements?” Thompson, of course, being the fellow at the controls when Wachovia was flying into the mountainside in 2008. The Winston-Salem Journal saw fit to run a story exploring Baker’s worthiness, including the beleaguered Hall of Famer’s own defense, which can be paraphrased thusly: Hey, a merger seemed like a good idea at the time.

My answer to the reader said, in part: “It’s an interesting question: Does the ambition behind an ambitious failure outweigh the failure?” If so, and that clearly seems to be the case in this instance, then yeah — why wouldn’t Thompson be inducted? In fact, make it a twofer by adding former Bank of America Corp. CEO Ken Lewis. Never has ambition-turned-failure been so conspicuously on display in the Old North State as it was when these two were working their magic. (OK, “failure” is a little strong in regards to Lewis and BofA. How ’bout “near disaster, undesired regulatory attention, the disdain of Congress and widespread public opprobrium”?)

But as I say, the Baker business is a minor flap — although the North Carolina Chamber of Commerce, which selects Hall of Fame inductees, apparently was unnerved by the attention. When I called to ask about the guidelines used in the selection process, I got a figurative bum’s rush. That’s too bad, because the other thing I wanted to ask is how the Hall of Fame became such an XY — as in chromosomes — club.

By my count, only five of the 91 people to be installed since 1988, when the first crop of laureates was harvested, are female. Sure, the early classes were in catch-up mode, plucking the obvious picks from the days of yore — American Tobacco’s James Buchanan Duke, for instance. In his day, women weren’t considered worthy of access to the ballot box, much less the boardroom. But while the later classes are much more contemporary, there still hasn’t been a woman installed since 2005. (That was Joan Zimmerman, CEO of Southern Shows Inc. in Charlotte.)

I’m not much in the grip of diversity mania. Remember, just a few months ago in this space I declared that a recent study lamenting the lack of diversity on Tar Heel corporate boards was simply “white noise.” I won’t pretend that I’m suddenly dismayed by the Hall of Fame’s gender imbalance — though the hall’s officials themselves are: “We probably need to look for more women and minority [laureates],” says Phil Volponi, president and CEO of Junior Achievement of Central Carolina, which oversees the Hall of Fame. The only reason I bring up gender is because it gives me a chance to make a pitch for my favorite female CEO of all time: Susan Ivey, who is retiring from Winston-Salem-based Reynolds American Inc. (page 30)

I could (but won’t) give you a long recounting of what Ivey has done since 2004, when she became head of the company formed by the merger of Louisville, Ky.-based Brown & Williamson Tobacco Corp. and Winston-Salem-based R.J. Reynolds Tobacco Co. — a stock price that doubled on her watch, a strong move into smokeless tobacco products and a deft touch at keeping her company below the anti-smoking zealots’ radar. Instead, I’ll simply share something she told a reporter seven years ago when asked why early in her career she gave up a good job selling office supplies to flog tobacco: “I wanted to sell something I had a passion for, like cosmetics, cigarettes or alcohol.”

An accomplished female CEO who likes to look good and party. Who’s going to quibble with that nomination? Certainly not me.