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Ford Motor Co. has fewer independent directors than other publicly traded companies, Moody's Investor Service Inc. said in a report on corporate governance.

At most, nine of 15 directors can be considered independent, which compares unfavorably to the average among companies in the Standard & Poor's 500 Index, the Jan. 20 report said. The Ford family controls 40 percent of voting power at the Dearborn-based automaker. Chief Executive Officer Bill Ford is the great-grandson of founder Henry Ford.

Corporate governance issues are being scrutinized after Enron Corp., the energy company that collapsed in a record bankruptcy in 2001, set up business partnerships owned by executives.

"People want some assurance the companies are being operated more for shareholder than for managers," said Mike Flynn, director of the University of Michigan's Office for the Study of Automotive Transportation.

"We're very comfortable with the current composition of our board and its governance," said Jim Vella, vice president of public affairs and chief of staff. "Moody's was obviously impressed by the high caliber of directors" and "by our strong oversight of internal audit and internal controls and by our continuous improvement of the corporate governance process."

The average board independence was 69 percent among 1,275 companies analyzed in 2003 by the Investor Responsibility Research Center. Larger companies had the most independent boards and companies with revenue of $10 billion or more had boards that were 73 percent independent.

At Ford, three family members are directors: Bill Ford; his father, William Clay Ford; and cousin Edsel Ford. Chief Operating Officer Nick Scheele is a director along with Carl Reichardt, who retired last year as vice chairman.

Moody's said other directors had potential conflicts of interest. Director John Thornton was until last year copresident of Goldman Sachs Group Inc., among Ford's bankers since the company went public in 1956. Ties between Ford and Goldman "leads us to conclude this director cannot be considered fully independent," Moody's said.

Directors Robert Rubin, chairman of Citigroup Inc.'s executive committee, and HSBC Holdings Plc Chairman John R.H. Bond may have links that mar their independence. "We would expect that given Ford's size, it likely has some banking relationships with these two financial institutions," the report said.

While investors may be concerned the Ford family is "too influential in the company's decision-making," the ratings company said "the high-caliber board balances out any such concerns."
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