The directors of Alex. Brown Inc., meeting for the last time before the annual shareholders meeting in May, voted yesterday to reduce the size of its board and give a majority of the seats to outside executives.
Details of the shift within the Baltimore-based investment banking firm are not expected to be released until the issuance next month of the company's proxy statement, which would outline the plan for shareholder approval.
However, the company's chief operating officer, A. B. Krongard, confirmed that about five Alex. Brown executives would likely not be renominated as directors this year.
The decision came as one of the final steps begun by an organization committee that was formed by the board about three years ago to help shift the company away from its days as a privately held partnership.
No director who works for Alex. Brown is leaving the firm, Mr. Krongard said.
"There's a trend to [having] a majority of outside directors," Mr. Krongard said late yesterday. "The slate that we will be coming out with will move that ball along."
Mr. Krongard, who is also a director, declined to identify who would be leaving the board in May. But, he said, instead of having 13 directors -- of which eight also serve as company executives -- the board would have about nine directors with only three from inside the firm.
The five current directors from outside the firm would remain the same, he said. A sixth, Frank E. Richardson, president of Wesray Capital Corp. in New York, was appointed yesterday to fill an existing board vacancy.
"This is perfectly consistent [with] the direction that we've been heading," Mr. Krongard said.