In his five years as CEO of Time Warner, Richard D. Parsons tamed a sprawling, unruly media octopus. Silencing early critics, he took a rudderless company with disparate holdings-such as Warner Bros. studios, HBO, the Time Inc. stable of magazines, and AOL-and transformed it into a uniform, functional enterprise. He simplified the corporate structure, strengthened the balance sheet, and discarded nonperforming assets. Not to say he hasn’t had major challenges. Despite his management prowess, the stock price has been stuck in a range, fueling shareholder dissent, most notably billionaire investor Carl Icahn’s push to break up the company in 2006. Throughout it all, #Parsons maintained his position as one of the most #powerful media moguls on the planet.
At a time when many chief executives have left the executive suite under fire, he has orchestrated one of the most orderly CEO successions in recent times. On top of that, he’s had to deal with corporate developments outside of Time Warner. As a board member of Citigroup, Parsons attended to the financial giant’s multibillion-dollar write-offs of subprime debt, and he presided over the board subcommittee that found Citigroup’s new CEO.
When Parsons stepped down as Time Warner CEO in January, he retained the title and responsibilities of chairman of the board. In an exclusive interview with black enterprise, Parsons discusses the future of Time Warner and #diversity in the executive suite.
Black Enterprise: Explain your current role with the company.
PARSONS: My new job is just to make sure that the new CEO [Jeffrey Bewkes] is effectively communicating his vision and direction to the board, that board input is being effectively received by the new CEO, and the other matters of chairing board meetings.
BE: What do you view as your greatest achievements during your tenure as CEO?
PARSONS: The thing that I feel the most satisfaction about is the relationship that I’ve been able to establish with all of my colleagues in the company, all the people who have been working on taking the company from the brink of disaster and restoring it to good shape. Even though the market has not smiled as favorably on our stock as I might have hoped, the company itself, in terms of the quality of its earnings and performance of its various divisions, is coming along. We have challenges like every company does in these markets, but we’re well back from the precipice and I think moving in a good channel.
BE: So what does management need to do to get movement in the stock price?
PARSONS: What we have to do is just continue to perform and show the marketplace and investors that we can turn the changes in our industry, including the acceleration of digital technology, to our advantage.
BE: So you believe you’ve structured Time Warner to handle the dynamic and rapid changes going on in media. Do you see retaining the suite of companies in the future?
PARSONS: I think the company is positioned very well to compete and grow in both the current environment and foreseeable future environments, but that doesn’t mean that something couldn’t happen tomorrow that will cause one to take a slightly different view or favor a slightly different construction of the company. The CEO’s job is to make sure that the company is always where it needs to be to maximize its competitive advantages. I couldn’t tell you if this company is going to be together the way it is for all time, nor can I tell you that the company is going to be broken up going forward.
BE: Under your watch, have you been satisfied with the diversification of the management ranks?
PARSONS: No. We’ve made some progress, over the last five or six years, in terms of diversifying the
management of our company at all levels. But it’s still a work in progress. I think we have most of the infrastructure in place. We have people at all levels who are doing the right thing by virtue of this objective. But we’re not where we need to be yet, and we will need to do more things on the structural side as well as on the human side.BE: Let’s talk about diversity in the boardroom. At the Black Corporate Directors Conference, its founders John Rogers and Charles Tribett presented the Corporate Diversity Call To Action, challenging black directors to make sure the diversity agenda was put on the boardroom table. Should black directors use their positions to push for greater diversity in corporations?
PARSONS: Do I think that somehow we need to come together collectively to validate this initiative? No, because each director’s obligations and responsibilities are to the shareholders of the entity that he or she is serving. I can assure you, having been on half a dozen large, public company boards, the agenda item is on the table and being addressed pretty much across the board. one of the things that I’ve found is that most directors who come from a diverse background, particularly African Americans,
introduce other minorities within the entities that they are serving on. When the board is looking to fill some seats, they are the persons it will go to in order to find some good minority directors.Now are we making progress as fast as we need to? There are always those who argue that we’ve got to move faster, and the dynamic tension that comes from that is good.
BE: So is the pipeline of minority directors expanding?
PARSONS: The scales are shifting. America’s corporate boardrooms are becoming more and more diverse each day, and that is not going to turn around in my judgment. But I think all of these things are incremental. People who are already over the wall play a part by not pulling the ladders up behind them, but instead putting more ladders down. So African Americans, Latinos, Asians, and women who are on boards have the opportunity to reach back and pull some more over the wall. People who are still getting their education have to play a part because nobody hands these things to you. You have to work for them. It has to be an across-the-board, society-wide effort. Everybody has to do their part. Hopefully I’m doing mine.