In a signal that its governance overhaul may be nearing completion, rehabilitation giant HealthSouth Corp. added two members to its board of directors last week, but even more additions are likely, said Jay Grinney, the company's chief executive officer.
The Birmingham, Ala.-based company announced that Lee Higdon, 58, president of the College of Charleston (S.C.), and John Maupin, 57, president of Meharry Medical College, Nashville, joined the board last week. Grinney, who also is a board member, didn't give a timeline but said the board anticipates that it could add up to two more members.
As of Sept. 6, HealthSouth's board is expected to have 11 members, including Richard Scrushy, the indicted former chairman and CEO who hasn't complied with requests that he step down from the board. The company's governance rules don't restrict the number of directors on the board, but Grinney said 12 would be a good number.
Other board changes are on the way.
In June, the company announced that Charles Elson, 44, director of the Weinberg Center for Corporate Governance at the University of Delaware, will join the board Sept. 1. Board member John Chamberlin, 75, was expected to resign last week, the company said. Chamberlin, a board member since 1993, is the last of five long-standing members who agreed to resign as part of a settlement in late 2003 with the Teachers' Retirement System of Louisiana, a pension plan that holds shares in HealthSouth. The teachers' group filed a lawsuit asking that HealthSouth be required to hold an annual meeting in early 2004. Under the settlement, HealthSouth is required to hold a meeting after its audited financial statements are complete-sometime in the first quarter of 2005, the company said.
In other HealthSouth news, a federal judge last week said the start of jury selection in the criminal case against Scrushy would begin Jan. 5, 2005, when jurors are scheduled to fill out questionnaires at U.S. District Court in Birmingham. Lawyers from both parties are supposed to submit a list of jurors to strike by Jan. 12 and further questioning and the final phase of jury selection is to begin Jan. 18.
The government charged Scrushy with 85 criminal counts in connection with HealthSouth's multibillion-dollar accounting fraud. Federal Judge Karon Bowdre earlier this year said the trial would start in September or next January, depending on schedules.
The case has been postponed from previous scheduled starts because lawyers said they needed more time to prepare and because of a scheduling conflict. U.S. Attorney Alice Martin said the court chose the date because of previous scheduling conflicts. There could be further delays, she said.