Disney Approves Tighter Standards for Its Directors

Walt Disney Co.’s board of directors, which has come under fire for being too close to management, took another step Tuesday to strengthen its corporate governance guidelines.

The changes include adopting a new code of conduct and business ethics for directors and tightening standards related to the independence of directors.

As a result of the changes, director John Bryson no longer is classified as independent and no longer will chair the board’s governance and nominating committee.

The board cited “the level of business” between Disney and the employer of Bryson’s wife, Louise, an executive at the Lifetime TV network, in which Disney is part owner. A year ago, the board decided that Bryson could remain an independent director.

That was a sore point with then-director Stanley Gold, who claimed that Disney removed him from a key committee post because he voiced criticism of Disney Chairman Michael Eisner. The board said Gold had been denied independent status because of his business relationship with former Vice Chairman Roy E. Disney, a major company shareholder.

Gold and Disney ultimately resigned from the board and called for Eisner’s resignation. The board has since rallied behind Eisner.

Tuesday’s actions were recommended by the board’s corporate governance advisor, Ira Millstein.

The board also reelected former U.S. Sen. George Mitchell as presiding director.

In other developments, Eisner said Tuesday that tourists flocked to the company’s theme parks over the holidays, signaling a gradual improvement in one of the company’s cornerstone businesses.

“Our parks are perhaps our most distinctive asset, and they concluded a rather auspicious holiday season,” Eisner said at a media conference in Phoenix.

Eisner did not disclose theme park attendance figures but said traffic was especially strong at Walt Disney World in Orlando, Fla. The resort posted its best day and best week ever over the holidays, he said.

Eisner said the strong attendance results would be tempered by higher marketing and employee benefit costs.

He also touted improvements at Disney’s California Adventure. The Anaheim park struggled after it opened in 2001 but was one of the few industrywide to show attendance gains in 2003, Eisner said, citing an annual survey by trade publication Amusement Business.

As the world’s biggest theme park operator, Disney has been hammered by a steep drop in worldwide travel because of the recession and fallout from the Sept. 11 terrorist attacks.

Disney has estimated that overall earnings per share for the fiscal year ending in September would rise 30% or more, based on the improved outlook for theme parks and other business units and the strong performance of its film studio, which was No. 1 at the box office last year.

The company’s ABC network will benefit from an improved advertising market and cost controls and aims to return to profitability in fiscal 2005, Eisner said.

Disney’s stock closed at $24.20, up 6 cents on the New York Stock Exchange.