Carnival the Cruise People Crucify CEO. What about Board of Director Culpability $CCL

Carnival Corporation (NYSE:CCL) CEO Micky Arison aged 63 and a director since 1987 and chairman since 1990 has suddenly resigned. No successor immediately apparent. In case you do not read the news Carnival has had a spate of embarrassing problems such as engine room fires, cruises ships sinking killing 22 lives and steadily declining profits for the past three years. That will do it.

Carnival knows when to pour a fresh drink at the bar but it does not know how to refresh its leadership. Micky Arison was the head honcho for 23 years and left after several disasters. The board of directors is also long in the tooth and probably has not challenged anything from management for a long time. There are only two directors who came on after 2010. Everyone else is shall we say established.

The most recent board appointment is a politically correct female. Debra J Kelly-ennis 56. She was President and Chief Executive Officer of Diageo Canada, Inc., a subsidiary of Diageo plc, a global spirits, wine and beer company, from 2008 to June 2012. So the consumer goods background makes sense. She of course knows nothing about ship engines or seamanship.

The appointment immediately prior was in 2010 for Sir Jonathon Band, age 63. Sir Jonathon Band served in the British Navy from 1967 until his retirement in 2009, having served as First Sea Lord and Chief of Naval Staff, the most senior officer position in the British Navy, until 2009. He has been a non-executive director of Lockheed Martin UK Limited since May 2010. I get the Lockheed Martin appointment. Senior military officer upon retirement steps into the arms business. Resume wise a very good fit for both. Was Carnival doing someone a favour and giving sir Jonathan Band a supposed easy one. The skill level of a warrior sailor is not what a cruise ship line needs. How embarrassing for a career sailor to watch one of his ships sink and the captain turn tail and get off the boat first. Not exactly Royal Navy was it.

The remaining directors have been there much too long and if Micky Arison needs to go they should also. So the first order of business is to recruit a new credible CEO and to rebuild the team. that should include large scale changes at the board level. Net money flow and up tick/down tick are slightly negative. Short position is 2.82% of float with a very small cover bias. Dividend is 2.86% BTW Micky Arison has been a net seller all this calendar year so his heart has not been in it.

Nominations are now open. Need someone from the travel business who knows how to build. but in the mean time watch for a caretaker financial engineer who will test the waters for a leverage buyout.