In a move that seems to signal the upcoming retirement of its chairman, Cisco Systems's board of directors on Friday adopted an age limit for members of its board of directors.
Under the new rule, no one may be nominated or renominated for a board seat after his or her 70th birthday, according to a Cisco news release on Friday. The rule will go into effect for nominations for Cisco's 2006 shareholder meeting, expected to take place in November 2006.
Cisco Chairman of the Board John Morgridge, now 71, would not be eligible for renomination. Vice Chairman Donald Valentine and board member James Gibbons also could not be renominated. All three intend to remain on the board until then, according to the release. At that time, the board will be reduced from 13 to 11 seats.
The rule was adopted at a regularly scheduled board meeting after it was recommended by the board's Nomination and Governance Committee. That board consists of Valentine, Gibbons, Carol Bartz and James Morgan.
Morgridge joined Cisco as president and chief executive officer (CEO) in 1988, when Cisco had 34 employees and US$5 million in annual sales, according to Cisco's Web site. He rose to his current post in 1995, handing over the reins to President and CEO John Chambers.
The age limit provides a clear road map for the evolution of the board, according to a statement attributed to Morgridge in the release.
Earlier this month, three high-level Cisco executives announced their retirement and Senior Vice President and Chief Technology Officer Charles Giancarlo was promoted to chief development officer. Those changes will become effective at the end of the company's current fiscal year on July 31.