Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) will reduce the size of its board of directors, as expected, after Erez Vigodman assumes the post of president and CEO next month. The announcement came in a letter to shareholders from chairman Dr. Phillip Frost.
Frost wrote, "We have also undertaken a broader review of Teva’s governance, including, among other things, the size and composition of the board. As part of this review, we intend to reduce the size of the board while also adding new board members with global healthcare experience."
Frost gave no numbers but sources believe the number of directors will be reduced from 15-12 (most global pharmaceutical companies have 10-12 directors).
At least one of the members of the board has already been decided. Frost wrote, "Mr. Vigodman will continue as a member of Teva’s board, an important initial step in our evolving governance structure." This addresses the problem of the rift between management and the board during the tenure of previous CEO Dr. Jeremy Levin who did not sit on the board.
Regarding the remained of the board's composition, Frost added, "We are currently in the process of identifying appropriate candidates. Corporate governance is a priority of this board, as we know it is for our shareholders. The constructive input we have received from our shareholders on this topic over the past few months has guided our ongoing review. We will keep you informed as we implement changes and continue to strengthen Teva with the objective of building shareholder value in partnership with our top-notch management team."
Digital printing entrepreneur and acitivist shareholder Benny Landa told "Globes" "This is a big step in the right direction and I welcome it. It looks like the board is on the right path and I'm certain they'll be working very soon, because the intention is very clear. I'm very encouraged by the direction and I'm waiting to see the results in the field."
Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2014
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