EO Tylee Wilson spent $68 million developing an ultimately distraous smokeless cigarette without telling the board. As chronicled in Barbarians at the Gate, even in an epic of corporate excess, Wilson directors were livid that he had far exceeded his spending limits without board approval. Why didnt you tell us about this sooner? Juanita Krepps demanded. You trust hundreds of company people working on this project; you trust dozens of people at and agency youre working with; you trust outside suppliers and scientists-but you dont trust us, she said. I, for one, absolutely resent that Wilsons successor, F. Ross Johnson, behaved similarly. He handled his board with a combination of lavish perquisites and meagre information. He arranged for his directors to rub shoulders with celebrities, use corporate planes and apartments, and he even endowed chairs at their alma maters with corporate funds. All this made hard for directors to push him on tough questions. Two Wall Street Journal reporters described the life of an RJR Nabisco board member: A seat on RJR Nabiscos board was almost like Easy Street: lucrative directors fees, fat consulting contracts and the constant loving care of the company president and chief executive officer, F. Ross Johnson. I sometimes feel like the director of transportation he once remarked, after ordering up a corporate jet for a board member. But if Im there for them, theyll be there for me. While he was dazzling his handpicked directors, who could expect them to complain about his jets and country club? Required:

i] Comment on the effectiveness of the RJR Nabisco board of directors with former and current CEO.

ii] What is the governance implication of the phrase But if Im there for them, theyll be there for me?