11/21/24 – Issue 9.44 – Your weekly news on all things board. 

The Boardspan team wishes you a happy Thanksgiving! Director’s Domain will be back after the holiday.

After two slow news weeks, there’s lots on board members minds these days. Now that the election results are clear, a whole new planning cycle may be underway in many boardrooms and C-suites. The economic outlook appears to be a bit rosier than earlier this year, nonetheless global trade, tariffs, workers’ rights, regulatory matters and a host of other issues will be on the table for discussion. To wit, the banking industry is seeing the immediate effects of change with politicians weighing in and regulators holding back. Culture and human capital governance matter more than ever. And if the geopolitical environment isn’t enough, cybersecurity, AI and other digital stress points will not abate. Meanwhile, corporate spin-offs continue to be in vogue. What’s a board member to do? Read on…you might find a few ideas below. If you find value in what you read, feel free to share it with others on your board or have them sign up for their very own edition of Director's Domain.

In the Spotlight

Director Optimism Increases in Post-Election Survey

Higher percentage of directors expect business conditions to improve

“The past few years have been marked by significant headwinds for business in the U.S., but if you listen to the hundreds of public company board members who participated in our post-election poll last week, that may be about to change. Corporate Board Member’s November Director Confidence Index, conducted in partnership with Diligent Institute, finds the majority of corporate directors optimistic about the business landscape in 2025: 54 percent expect conditions to improve over the next 12 months, vs. 42 percent in Q3 when we last polled them on this matter.” CORPORATE BOARD MEMBER

House Republicans Urge FDIC to Withdraw Proposed Board Governance Rule

Republican lawmakers claim the proposal represents a “significant departure” from existing governance principles

“The proposed guidelines would require boards at $10 billion-plus banks to create risk management programs… In their letter, the lawmakers, led by Rep. Frank Lucas (R-Okla.), said the proposal contains three major flaws. First, it would fundamentally change the liability and responsibilities of bank boards of directors and senior management. Second, its requirements are inconsistent with most state laws regarding directors’ fiduciary duties. Third, it arbitrarily sets the asset threshold for covered institutions far below the thresholds for heightened standards under the other banking regulations.” ABA

Regulators Are Withholding New Rules for Banks Until After Handover

The Fed, FDIC and OCC have no plans to any major rules or changes in anticipation of the political swing underway

“Representatives from the Federal Reserve, FDIC and Office of the Comptroller of the Currency said today there are no plans to finalize major rulemakings until next year, when President-elect Trump will likely appoint new leaders to the FDIC and OCC… FDIC Chairman Martin Gruenberg said his agency has several pending rulemakings. ‘We don’t anticipate any of them will be ready for action prior to the end of the current administration,’ he said.” ABA

From Boardspan this Week:

What's on the minds of Nominating & Governance Chairs?

From crisis preparedness to AI expertise to board succession planning, the NGC is covering a lot of ground. Learn what we're hearing from high-performing boards and get actionable tips to prepare your board for the future.

Across the Board

Proposed ISS and Glass Lewis Benchmark Policy Changes for 2025
Glass Lewis introduces policy updates for 2025, with a continued focus on executive compensation and board oversight matters – including the introduction of an artificial intelligence-related policy

“Glass Lewis will generally not make voting recommendations on the basis of a company’s AI oversight or disclosure. However, when there is evidence that shareholders have been materially impacted by insufficient AI oversight or management, Glass Lewis may recommend against appropriate directors… Glass Lewis will closely evaluate how the independent board members came to their recommendation, if the controlling shareholder had any ability to influence the board, and if the proposal also is put to a vote of disinterested shareholders.” COOLEY

See here for ISS's recent release, ISS Insights

The Expanding Agenda for Boards of Directors
While boards have made meaningful advances to address sustainability topics, they are less confident when it comes to their understanding of and ability to capitalize on GenAI

“Boards of directors are confronting an ever-expanding list of critical, complex topics. For the past few years, that list has been driven by an increased urgency to address climate and sustainability issues, and that imperative continues. But other issues—such as the rising importance of generative AI (GenAI) and intensifying trade and geopolitical disruptions—have also become a central part of the board agenda.” BOSTON CONSULTING GROUP

Board Influence and Control of a Company’s Digital Future is Critical to Success

Boards had a vital responsibility and are rethinking their committee structure to address it

“As the economic outputs and risks from digital business systems increase and expand, boardroom effectiveness is vital to how companies use and protect the digital business systems delivering their future… Corporate governance is a control in the complex digital business systems that power companies… Far too frequently however, the boardroom is a non-existent or under-performing control in the digital business system.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

A Board Outlook on Effective Human Capital Governance

Only one-third of board members agree that human capital governance is effective on their boards

“Human capital governance has emerged as a timely and relevant topic to board members, given new regulations in many countries; the impact of the pandemic and climate events on talent availability, mobility and cost; employee well-being and productivity; and labor action, as well as recognition of the role of intangible assets in corporate valuations and the link between people and performance (as well as risk). Human capital has become a focal point of board governance and one of the essential pillars of strong corporate stewardship.” DIRECTORS & BOARDS

What’s the Board’s Role in Overseeing Corporate Culture?

43% of respondents note their company does not have a definition of corporate culture

“Corporate culture is a critical area of board oversight. Closely tethered to corporate strategy and risk, culture failures can upend a company. On the flip side, the benefits associated with a positive culture are mission critical and can include business and financial resilience, reputation and goodwill, improved employee behavior, and higher employee engagement and productivity.” WALL STREET JOURNAL

CVS Adds 4 New Board Members After Activist Push

The company’s healthcare benefits division has come under pressure as Medicare Advantage plan members seek more treatment following the Covid-19 pandemic

“CVS Health has appointed four new members to its board of directors following successful discussions with hedge fund Glenview Capital Management… The changes to the board arrived several weeks after the hedge fund was meeting with top brass to exchange ideas on how to make improvements at the pharmacy and healthcare company.” BARRON’S

Elliott Threatens Company Split in Letter to Honeywell’s Board

Elliott is advising Honeywell to separate its automation and aerospace businesses

“Activist investor Elliott Investment Management has taken a more than $5 billion stake in Honeywell International and is calling for the industrial conglomerate to split into two separate companies. In a letter sent to Honeywell's board, Elliott said… company needs to simplify its structure as it deals with uneven execution, inconsistent financial results and an underperforming stock price.… Elliot’s stake makes it one of Honeywell’s largest shareholders. It has a long history of activism, most recently at Southwest Airlines where the carrier last month agreed to overhaul its board of directors.” MSN

Comcast to Spin Off Cable Networks, Including MSNBC and CNBC

The entertainment giant makes a bid to unshackle its movie studio and theme parks from the waning fortunes of traditional television

“NBCUniversal, Comcast’s media division, is set to cleave off a bundle of cable channels that generate roughly $7 billion in revenue annually, including USA, Oxygen, E!, Syfy and Golf Channel, into a new public company. Brian Roberts, the influential chief executive of Comcast… will not serve on the board of the new venture nor oversee its operations.” NEW YORK TIMES

Seat at the Table

• Clorox announces to its board Stephen Bratspies, CEO of Hanesbrands; and Pierre Breber, VP and CFO of Chevron

• Eli Lilly and Company appoints to its board Jon Moeller, Chairman, President and CEO of Procter & Gamble

• Panera Brands welcomes to its board David Deno, former CEO of restaurant firm Bloomin’ Brands

• BlackRock elects to its board Bayo Ogunlesi, Founding Partner, Chairman and CEO of Global Infrastructure Partners

• GameStop appoints to its board Nat Turner, Chairman and CEO of Collectors Holdings

• LegalZoom announces to its board Nathan Gooden, CFO of Squarespace

• Business communications firm 8x8 elects to its board John Pagliuca, President and CEO of software firm N-able

• Asbury Automotive Group adds to its board Shamla Naidoo, former VP of Technology Risk and Global Chief Information Security Officer at IBM

• InfuSystem welcomes to its board Ronald Hundzinski, former CFO of TI Fluid Systems

• Xponential Fitness elects to its board Bruce Haase, former CEO of Extended Stay America

• Hamilton Beach Brans appoints to its board April Lane, Chief Merchandising Officer at Thrive Market; and Bela Mehta, Managing Partner at CITG Capital Partners

• Flywire adds to its board Carleigh Jaques, former SVP, Global Head of Risk & Identity Solutions at Visa

• Business services firm Assurant announces to its board Kevin Warren, former Chief Marketing and Customer Experience Officer at UPS

• Lexicon Pharmaceuticals elects to its board Ivan Cheung, CEO of NextPoint Therapeutics

About Boardspan
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