Nichols Institute Replaces 3 of 7 on Board of Directors
In a move to put more emphasis on business expertise, Nichols Institute said Monday that it is replacing three of its seven directors.
The company, which makes test kits for a broad range of medical disciplines, said the new directors are Rock N. Hankin, a management consultant who was formerly a partner at the accounting firm of Price Waterhouse; George L. Bragg, a former vice chairman of Western Digital Corp.; and Frederic M. Roberts, president of the investment bank F.M. Roberts & Co. They replace Rosabeth M. Kanter and James A. Riddell, both of whom hold Ph.D.s, and physician John T. Potts.
In addition, company Chairman Albert L. Nichols said he will recommend that stockholders replace board members Norman W. Achen and Earl L. Wright with directors who have strong business credentials. Nichols and Paul Bellamy, the chief financial officer who is serving as interim chief executive officer, would remain on the board.
“The changing marketplace and the major changes in health care are also going to require changes in the way Nichols Institute does business,” said Nichols, a physician himself. “I need to bring on people at the board level who have the kind of experience in dealing with rapidly changing companies and marketplaces that we are going to need.”
Nichols removed himself as chief executive officer of the San Juan Capistrano-based company in December and is seeking a permanent successor.
Under President Clinton, Nichols said, the nation’s health care establishment will probably undergo substantial change as the administration works toward its goal of reducing health care costs and setting up national health insurance. Such changes, even if they are chaotic, could create “tremendous business opportunities” for Nichols if it can react quickly, the chairman said.
Bonnie S. Perkins, an analyst for the brokerage William Blair & Co. in Chicago, said that the moves were expected and that they will help put the company on a stronger business footing.
Nichols said he does not fear a loss of medical expertise on the board, noting that there are other doctors and other medical professionals on the company’s 4,000-member staff to offer plenty of advice on medical matters.
He also said that the board changes are unrelated to Nichols Institute’s annual results, released last week. The company reported a 1992 loss of $4.3 million, or 28 cents, compared with a profit of $3.4 million, or 23 cents a share, for the previous 12 months. It blamed the loss on a second-quarter restructuring charge. Annual revenue was up 20% to $284.2 million from $236.3 million.
