Cisco Systems, the largest maker of networking equipment in the world, has set a maximum age limit for members on its board of directors, the company said Friday.
The new policy bars people 70 and older from being nominated or renominated for election to the board. This means that the current chairman, John P. Morgridge, 71, will retire from the board in November 2006, when his term is completed.
Morgridge joined Cisco in 1988 as president and CEO. He served in that position until early 1995, when John Chambers became president and chief executive. At that point, Morgridge took on the role of chairman.
During his years as chief executive, Morgridge grew Cisco's annual sales from $5 million to more than $1.2 billion and led the company toward its 1990 initial public offering.
"Consistent with similar policies adopted by leading corporations, we've initiated this change to create a more formal timeline for board member changes," he said in a statement. "I look forward to the next year and a half of service to Cisco shareholders, working with the board, senior management and employees to drive the company's continued industry leadership."
Based on the new policy, vice chairman Donald T. Valentine and board member James F. Gibbons will not be eligible for renomination at Cisco's annual shareholder meeting in November. Both directors intend to remain on the board until then. Cisco said it expects to reduce the number of authorized directors from 13 to 11 at that time.
"For more than a decade, I've had the pleasure to serve on the board alongside Don and Jim," Morgridge said in a statement. "They have both contributed significantly to Cisco's success, and the entire Cisco community owes them a debt of gratitude."
Cisco also recently announced several management changes after Mario Mazzola, chief development officer, announced his retirement.
In setting an age limit, Cisco is not alone. According to research by consulting firm Hewitt Associates, at least 86 percent of Fortune 250 companies have retirement guidelines for board members. Of that 86 percent, 72 is the median age for retirement.
CNET News.com's Ed Frauenheim contributed to this report.
This has to rank up there as one of the dumbest ideas a Dot Com company can follow through with. Older more seasoned exec's are the bedrock of a stable IT company. Good companies have a good foundation. Senior exec's bring non-rash, level headed, seasoned, wise and knowledgable experience to the board room table. Basically this will make Cisco just another "me too", fad following, Dot Com company.
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