By Brett D. Fromson
"Everybody does it. This was nothing out of the ordinary. It's the way the world works," Jordan said in an interview yesterday. "I wish when I was a kid that someone had done that for me. But there were no blacks on boards back then."
Jordan, one of President Clinton's closest friends and a key figure in the probe of Monica Lewinsky's relationship with the president, is no stranger to the subtle machinations that characterize corporate life.
A member of 10 major corporate boards -- positions that will earn him an estimated $1.1 million this year -- Jordan has developed a reputation among his peers in the corporate elite for being a deft networker and a loyal defender of the managers who nominate him for a directorship.
At American Express Co., for example, Jordan wanted no part of the 1992-93 boardroom coup against a friend of his, chief executive James D. Robinson, III.
Responding to a call by other directors for Robinson's ouster because of managerial miscues, Jordan told his peers he opposed dumping Robinson. He instead backed a plan to form a search committee that included Robinson, according to board sources familiar with the meeting held in a private dining room at the St. Regis hotel in New York in late 1992.
This move helped Robinson momentarily to outmaneuver his opponents on the board by allowing him to retain the chairmanship and install his protege as chief executive. When that tactic failed in the face of a shareholder revolt, Jordan and other Robinson allies reluctantly concluded Robinson must resign -- with a huge farewell compensation package.
Jordan's efforts to help Lewinsky, a former White House intern, find a job by tapping his connections at American Express and Revlon Group Inc. -- two companies he serves as a director -- have thrown a spotlight on his corporate activities. Some observers have found it curious that Jordan, a high-flying corporate lawyer, would network so assiduously for a 24-year-old intern. At Revlon, in fact, Jordan went right to the top, speaking to Revlon Chairman Ronald O. Perelman about getting Lewinsky a job.
Independent Counsel Kenneth Starr is investigating whether Jordan's efforts on behalf of Lewinsky were made in exchange for her signing an affidavit that she did not have sex with the president.
Yesterday, Jordan declined to say whether he had ever contacted these companies previously for other young men or women. And he said he would not have referred Lewinsky if he had thought it would generate controversy.
"You are not going to recommend anyone anywhere that will reflect negatively on a company. Nobody does that," he said. Both American Express and Revlon have received subpoenas from Starr requesting information on Lewinsky's job search. Revlon ultimately offered her a job, but withdrew in the face of allegations that she had had an affair with the president.
Jordan is one of the most sought-after directors in America.
He sits on the boards of a long list of large publicly held U.S. companies -- American Express, Bankers Trust New York Corp., Callaway Golf Co., Dow Jones & Co., J.C. Penney Co., Revlon, Ryder System Inc., Sara Lee Corp., Union Carbide Corp. and Xerox Corp. -- whose total market value is about $100 billion.
This year, Jordan is expected to receive a total remuneration of about $1.1 million for his board duties, according to Graef Crystal, editor of the Crystal Report, a newsletter on executive compensation.
In addition, eight of the 10 companies steer legal business to his law firm, Akin, Gump, Strauss, Hauer & Feld, where Jordan is one of three senior executive partners and earns a reported $1 million a year.
In theory, corporate directors such as Jordan serve to protect the interests of shareholders. The chief executive of a publicly held company serves at the pleasure of the board, which has the legal authority to oust top management.
In reality, boards also serve as agents of management, which is usually responsible for their being named to the board in the first place. Corporate governance hawks have argued for years that far too many directors are in top management's pocket and reward mediocre executives at shareholders' expense.
Jordan, like many of his peers, tends to be extremely supportive of management, according to current and former directors who have seen him in action. "Vernon is a loyalist," said one. Jordan had no comment on that characterization.
Jordan is supposed to attend 84 board meetings and another 57 committee meetings a year, according to company reports. That does not require quite the time commitment one might imagine because board and committee meetings are often held on the same day, and as was the case earlier this week for a Xerox board session, Jordan can be hooked in telephonically. Only at Bankers Trust and Dow Jones was Jordan's attendance below average, according to company reports.
As a board member, Jordan was involved in another major business story: the scandal at Bankers Trust after corporate customers sued the bank for fraud involving the bank's most profitable product, financial derivatives.
During the difficult days of the scandal, Jordan remained loyal to Bankers Trust chief executive Charles Sanford, even though many investors were calling right away for Sanford's departure.
"It has never been acknowledged by the bank that the board forced a change in management," a board source said. "But the question facing the board was how to protect the reputation of the company while taking its time to gracefully change leadership. Jordan was good at that. He was a longtime director and close to Sanford. They had many conversations, warm and friendly, about what was the right thing for Charlie to do."
A bank spokesman said, "Mr. Sanford resigned in 1996 consistent with his prior plan to retire at age 60, which he communicated to the board in 1993."
Current and former executives and directors of Fortune 500 companies who have worked with Jordan say his presence on so many boards results in large part from the paucity of "qualified" African American representatives.
Jordan, from 1972 to 1981 head of the National Urban League, had mined the corporate world for contributions to sustain the civil rights organization.
"Go back 10 or 20 years, companies began to want to find blacks to put on the boards in order to gain diversity," said Harvard Business School's Jay Lorsch. "Executives and directors looked around the black community and they were not going to pick Jesse Jackson. So they picked people empathetic to management and who knew how the system works."
The former senior executive at American Express said Jordan spurred the American Express board to bolster minority hiring at American Express and championed African American executives such as Kenneth Chenault, president and chief operating officer of the financial and travel services giant.
More recently, Jordan's political ties to Clinton have impressed corporate chief executives.
"Clinton's election enhanced Vernon's stature. He has entree into what is going on in Washington and how Clinton might react to an issue of importance to our company," said a former director of a company where Jordan serves as a board member.
Jordan himself says: "I would be the last to deny that my life has been enhanced by my relationship with the president."
Still, directors who have served with Jordan on boards said the unusual circumstances surrounding Lewinsky's job search might have caused them to pause before referring a job candidate to top management.
"There is a big difference between recommending a woman who you might suspect was the president's mistress and recommending the son or daughter of your college roommate," said one of the directors who is also a chief executive of a major company. "If Vernon had come to me in my capacity as an executive, I would have asked him what was up. If the person seemed like a hot potato, then I would ask him about her."
A source close to top executives and directors of Revlon said about Jordan, "If he wanted [Lewinsky] to get a job, she would have gotten a job. If he says it is important, that is different from just saying talk to this girl."
Directorships also run in the Jordan family. His second wife, Ann Dibble Jordan, is on five boards -- Automatic Data Processing Inc., Coleman Co., Johnson & Johnson, Salant Corp. and Travelers Group Inc. Coleman is controlled by Revlon chief Perelman.
On the Johnson & Johnson board when she and Jordan married in 1986, she later joined the other four. Compensation expert Crystal figures her annual compensation from board service totals about $345,000.
In addition, Jordan's daughter Vickee Jordan Adams is a director of Granite Broadcasting Corp. and his stepdaughter Antoinette Cook Bush is a director of CNA Financial Corp., an insurance subsidiary of Loews Corp.
The Jordan family as a group sits on the boards of 17 publicly held U.S. companies.
Staff researcher Richard Drezen contributed to this report.
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