Tenet Board Shrinking as Challenges Loom

In the past, the committee has suggested that possible conflicts may have compromised the performance of both directors. Biondi, who currently chairs the company's ethics, quality and compliance committee, serves as president of a university that sold its hospital to Tenet in 1997 and, since then, has collected millions of dollars from the company. Cloud, who chairs Tenet's corporate governance and compliance committee, presides over an organization that's in the process of collecting large annual donations from the company.

Both directors also serve on the executive committee that holds "all of the powers of the board in the management of [Tenet's] business and affairs when the board is not in session." Only one member of that committee -- Tenet Chairman Edward Kangas -- will remain.

Going forward, another director with possible conflicts may leave the board as well. Monica Lozano, publisher of a Spanish-language newspaper that sells advertising to Tenet, has informed the company that she may not seek reelection next year. She currently serves on the two committees chaired by the departing directors.

All together, six directors -- including three independent newcomers -- will try to keep their board seats this year. And they will be seeking votes far away from Tenet's Santa Barbara headquarters in a city that, some believe, could become the company's next home.

"Tenet has four acute-care hospitals and its largest corporate office in the Dallas area," the company explained, when announcing the location of this year's meeting.

Last month, however, Tenet CEO Trevor Fetter signaled that a permanent move could be coming.

"I think it's clear to everyone that the Santa Barbara headquarters location was originally created for the personal convenience of the top executives of this company," Fetter wrote in a March 15 memo to his corporate staff. "Unfortunately, this company and its predecessors had a tradition of self-indulgence at the top. One of my top priorities has been to do away with that tradition."