Kenneth L. Chenault.

• Author: Porter, Martin
• Position: American Express Co.'s president appointed to the International Business Machines Corp. board

Louis Gerstner finally snags an elusive candidate for the Big Blue board.

While completing his last year at Harvard Law School in 1976, Kenneth I. Chenault became an American Express Co. card member. (His first card was gold, the most exclusive offered by the company at the time, according to a recent Business Week story on him.) Five years later, after serving as a management consultant at Bain & Co. and an attorney at Rogers & Wells, he joined AmEx. His boss was Louis V. Gerstner Jr., who was then heading AmEx's largest division, the Travel Related Services Group (TRS). Their paths have just crossed again in a meaningful way. Chenault, who became president and COO of AmEx in 1997, is now, in a twist of irony, overseeing his former boss: In October 1998, he was elected to the board of IBM Corp., whose chairman and CEO is Louis Gerstner.

"Louis has always had his eye on Ken for his board," says IBM director Cathleen Black, adding that he has been trying to woo Chenault for years. Black, president of Hearst Magazines and an IBM director since 1995, serves on IBM's corporate governance committee, which has accountability for director selection. The timing was never right for Chenault. But, Black says, "Louis is very persuasive," and through persistence ultimately convinced Chenault that if he were to join any outside board, IBM was a place where he could make a significant contribution.

"Believe me, Ken has many, many opportunities to join literally dozens of boards," Black says. Executives of his stature must be extremely selective when considering joining boards because of the time commitment, she says, and they must also have a very strong belief in the future of the organization. She hails Chenault as an accomplished executive, and says IBM is a world-class company and the perfect board opportunity for him.

Chenault served under Gerstner for eight years. In his first job as director of strategy for TRS's merchandise services division, Chenault immediately established a successful track record: revenue from mail-order services tripled to $500 million in only two years. By the time Gerstner resigned in 1989 to head RJR Nabisco Inc., Chenault was managing the entire consumer card group for TRS.

The early '90s were turbulent years at AmEx. It was significantly trailing Mastercard and Visa in market share, prompting a series of massive cost-cutting restructurings and new marketing strategies to get AmEx back on track - areas where Chenault...