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The irony of appointing former Nortel Networks' board director Kristina Johnson to Cisco's board of directors

It appears Cisco CEO John Chambers has appointed Cisco's first openly gay lesbian board director, Kristina M. Johnson!

Mon, 8/6/12 - 5:30am    View comments

In a press release last week, Cisco Chairman and CEO John Chambers gushed:

"We are extremely pleased to welcome Kristina to Cisco's board of directors. Kristina brings us an unmatched expertise in science and technology, which will help guide Cisco as we continue to innovate and transform our customers' experiences."

The Cisco press release continued:

"Johnson, 55, currently serves as CEO of Enduring Hydro, LLC, a clean energy development and consulting company. In her previous role as under secretary of energy, she was responsible for managing a broad $10.5 billion energy and environment portfolio. Prior to this role, Johnson served as provost and senior vice president for Academic Affairs at The Johns Hopkins University and dean of the Pratt School of Engineering at Duke University. She currently serves on the board of directors of Boston Scientific Corporation and The AES Corporation. Johnson is also an inventor and entrepreneur, holding more than 45 U.S. patents. Johnson has received the John Fritz Medal, widely considered the highest award given in the engineering profession."

View the below stock price chart comparison of the companies on which Kristina M. Johnson currently serves as a member of the board of directors (i.e. Cisco Systems, AES Corporation and Boston Scientific Corporation).

Cisco (CSCO) vs. AES Corporation (AES) vs. Boston Scientific Corporation (BSX):

What peaked my curiosity though, was what wasn't mentioned in Cisco's press release!

On November 7, 2006 Kristina M. Johnson was appointed to the Board of Directors of Nortel Networks:

Nortel Announces Dr. Kristina M. Johnson Appointment to the Board of Directors

"I am pleased to announce Dean Johnson's appointment," said Harry Pearce, chairman of Nortel's Board of Directors. "Her insight and experience will greatly benefit Nortel and contribute to our focus on innovation and R&D effectiveness."

Gee, fast-foward 6-years and it sounds almost exactly how Cisco CEO John Chambers gushed about Johnson.

However, according to a Form 8-K filed on May 27, 2009 with the U.S. Securities and Exchange Commission:

"On May 20, 2009, as a result of the confirmation by the United States Senate of the nomination by President Obama of Dr. Kristina M. Johnson as Under Secretary of Energy for the Department of Energy, Dr. Johnson provided notice of her resignation from the Boards of Directors of Nortel Networks Corporation ('NNC') and Nortel Networks Limited ('NNL'). Dr. Johnson's resignation, which was effective May 20, 2009, is as a result of such confirmation and not as a result of any disagreement with NNC or NNL."

View all of the Nortel Networks' financial statements as filed with the SEC during the 11/7/2006 to 5/20/2009 time frame when Kristina M. Johnson served on Nortel's board of directors:

Nortel financial documents

In my opinion, here's the irony of appointing former Nortel Networks' board director Kristina Johnson to Cisco's board of directors:

• While a member of the board directors of the failing Nortel Networks between the months of July and September 2008, Cisco's new board director, Kristina M. Johnson, appears to have approved the private jet use of Nortel CEO Mike Zafirovski so he could commute from his home in Chicago to his work office in Toronto, even though Nortel suffered an operating loss of -$1.188 billion (page 1) during those 3-months.
• Obviously, Johnson will fit right in as a Cisco board director because Cisco Chairman and CEO John Chambers loves to travel in his outrageously expensive $50 million private jet that he personally owns, but simultaneously charges Cisco over $2 million annually in expenses!

Why Cisco's Board of Directors should be replaced

Are these the real reasons for the fall of Nortel?

Nortel chief flying in corporate jet as company files for bankruptcy protection

Nortel board of directors vote to file bankruptcy

Analyst appears to pre-announce the imminent death of Nortel: Stock price target $0

Once north of $300B, Nortel's stock market capitalization plummets under $1B
 

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