The Rittenhouse Review

A Philadelphia Journal of Politics, Finance, Ethics, and Culture

Tuesday, July 02, 2002  

Kann Eases Stranglehold on The Wall Street Journal
House Advances. Nepotism? You Decide.

Über journalist Peter R. Kann is loosening the stranglehold he has over the operations of financial publishing company Dow Jones & Co.

Until today, Kann was chairman of the board, chief executive officer, and chief operating officer of Dow Jones, as well as publisher of The Wall Street Journal, and editorial director of all Dow Jones publications, including Barron’s and the Dow Jones News Wires.

Dow Jones today announced that Kann will be giving up two of those titles, namely, chief operating officer and publisher of the Journal.

Taking over the position of chief operating officer is Richard F. Zannino, who previously had been chief financial officer of Dow Jones.

Zannino joined Dow Jones in 2001 after a career at Liz Claiborne Inc., including executive vice president, finance and administration.

Assuming the role of publisher of all print editions of the Journal is Karen Elliot House, previously president of the company’s international group.

House joined the Journal as a reporter in 1974 and, including the promotion announcement today, has been elevated at least six times since then. House was promoted to diplomatic correspondent in 1978, assistant foreign editor in 1983, foreign editor in 1984, vice president of the international group in 1989, and was named president of the unit in 1995.

Joining Kann, Zannino, and House on the newly formed seven-member executive committee, which will help Kann run the company, are Peter G. Skinner, executive vice president and general counsel; L. Gordon Crovitz, senior vice president, electronic publishing; James H. Ottaway Jr., senior vice president and CEO of the shrinking Ottaway Newspapers subsidiary; and Paul E. Steiger, managing editor of the Journal.

The executive changes at Dow Jones -- including the promotion of Christopher W. Vieth, most recently vice president of finance and comptroller, to the CFO slot -- were approved by the corporation’s board of directors last month.

The Dow Jones board of directors

For the record, as we say, the board of directors at Dow Jones is perhaps the quintessential example of the governance by the “old boys’ club.”

In addition to the aforementioned Kann and Ottaway, the board includes: Rand Araskog, former chairman of ITT Corp.; Harvey Golub, former chairman and chief executive officer of American Express Co.; Irvine O. Hockaway Jr., former president and chief executive officer of Hallmark Cards Inc.; William C. Steere Jr., chairman emeritus of Pfizer Inc.; Frank H. Newman, chairman emeritus of Bankers Trust Co.; David K.P. Li, chairman and chief executive office of Bank of East Asia Ltd.; Dieter von Holtzbrink, chairman of Verlagsgruppe George von Holtzbrink GmbH; Vernon E. Jordan, senior managing director at Lazard Frères & Co.; Roy A. Hammer, partner at Henneway & Barnes; and M. Peter McPherson, president of Michigan State University.

The board also includes three members of the Bancroft family, which owns a majority stake in Dow Jones: Christopher Bancroft, Leslie Hill, and Elizabeth Steele.

Exactly how independent this board is from management is open to debate. Many of these gentlemen have been palling around for years and some of them have so many other commitments that the amount of time they could possibly devote to the affairs of Dow Jones is questionable. Li serves on the boards of nine other corporations, Jordan sits on eight other boards, Hockaway on four, Steere on three, and Golub on two. Again, these are directorships these men hold in addition to their seats on the Dow Jones board.

Draw your own conclusions

Oh, and by the way, Peter Kann and Karen House are husband and wife.

For official documentation of this relationship, see the most recent proxy statement filed at the Securities and Exchange Commission by Dow Jones. For a less than flattering look at the relationship of Kann and House and its effect on operations at the paper and the rest of the company, read The Power and the Money: Inside the Wall Street Journal, by Francis X. Dealy Jr., which while out of print is available used. And for a review of Dealey’s book see Chris Welles’s piece in the July/August 1998 edition of the Columbia Journalism Review.

The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |