Philips chief Kleisterlee to head Vodafone

Vidya Ram London | Updated on February 02, 2011 Published on February 02, 2011

Mr Gerard Kleisterlee

British telecom giant Vodafone has appointed Mr Gerard Kleisterlee, the chief executive and president of Dutch firm Philips Electronics, as its new chairman, in the latest sign that the company is intent on further international expansion.

Vodafone said that Mr Kleisterlee, who will take over from Sir John Bond on April 1, was picked because of his “international experience” and “familiarity with business in emerging markets.”

“It is an honour and a privilege to be invited by the Board of Vodafone to become its Chairman,” said German-born Mr Kleisterlee on Wednesday.

Long stint in Philips

Mr Kleisterlee, 64, has spent his entire career at Philips, starting with its medical systems division in 1974. Over the next decade, the electrical engineer worked his way up the company, moving to Asia to become the president of Philips Taiwan and the regional manager for its components division in the Asia-Pacific division in 1996.

Shortly afterwards he was also made responsible for all the firm's activities in China up until 1998. Moving back to Europe, he joined the Philips board in 2000, and was made chief executive and chairman in 2001 a position he will hold until March. He is also a member of the Daimler supervisory board, and a member of Royal Dutch Shell's audit committee, and joined the board of directors of Dell late last year.

Mr Kleisterlee proved a popular and successful CEO, winning widespread acclamation for his strategy of transforming Philips from a large unwieldy to a far more streamlined and competitive business focused on lighting, healthcare and consumer electronics, winning him Fortune's European Businessman of the Year award back in 2007. Mr Kleisterlee sold Philips' semi-conductor business to a consortium of private equity investors, including Kohlberg Kravis Robers, Silver Lake Partners and AlphInvest for around $10 billion, a move that helped stabilise earnings.

Vodafone investors will be hoping that he will bring the same acumen “along with his experience in Asia” to the role of chairman. Mr Kleisterlee's predecessor, Sir John, has faced flak over the firm's strategy, with shareholder Ontario Teachers' Pension Plan voting against his re-election as chairman last year.

Though the activist shareholders voted in favour of Mr Vittorio Colao continuing as CEO, they argued that over the past five years the firm had had “significant structural and strategic weakness” which had led to the firm trading well below its asset value, and that board rejuvenation was essential if the firm were to put its history of “poor allocation and disastrous M&A” behind it.

Key challenges

Mr Kleisterlee will face two immediate challenges as chairman: the impasse with Verizon Communications in the US over dividend payments of the joint venture, and the stand off with the Essar Group over its plans to merge part of Vodafone Essar into publicly-listed India Securities.

Published on February 02, 2011

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.