1/9/25 – Issue 10.01 – Your weekly news on all things board. 

Risk is the boardroom’s constant companion—sometimes the quiet observer, other times dramatically disruptive. As directors confront a rapidly changing landscape, several critical questions arise: How to manage the repercussions of Costco’s shareholder vote on DEI programs, which is likely to leave one camp or another unhappy? As cybersecurity threats continue to escalate, how can every board member ensure they are vigilant, rather than leaving it up to the audit committee? With AI oversight now coming under scrutiny from Glass Lewis, what preparations must directors make for risks that are as complex as the technologies they oversee? Governance in this increasingly complex and polarized world transcends simple maintenance of operations; it requires skillful navigation through uncharted waters, ensuring that organizations not only survive but thrive amidst uncertainty.

In the Spotlight

Boards Await Costco’s Shareholder Vote on Ending Its DEI Programs

No matter which side of the DEI debate directors are on, corporate boards will likely pay close attention to what happens with the vote on this anti-DEI proposal

“The National Center for Public Policy Research (NCPPR) has filed a proposal which asks Costco to end its DEI initiatives because they are discriminatory and open the company up to financial and legal risks. In a statement, the conservative think tank stated that, ‘DEI holds litigation, reputational and financial risks to the company, and therefore financial risks to shareholders.’... Costco’s board is urging shareholders to vote against the NCPPR proposal and has publicly stated its commitment to its DEI programs.” CORPORATE BOARD MEMBER

New Year, New Cyber Threats: How Boards Are Stepping Up

From quarterly security briefings to crisis simulations, corporate boards are revolutionizing their approach to cyber defense

“As concerns about cybersecurity continue on a seemingly constant growth trajectory, audit committees most often take the lead on cyber disclosure oversight… But cyber concerns are not just the purview of one committee — they are embedded in a variety of discussions, from risk and strategy to talent and supply chain. Given the complexity and frequency with which cyber issues arise and their potential costs, the entire board must be watchful.” CORPORATE COMPLIANCE INSIGHTS

Annual Meeting and Corporate Governance Updates for 2025

Glass Lewis now expects boards to track, understand and take steps to mitigate exposure to any material risks that could arise from a company’s use or development of AI

“Glass Lewis (i) will review a company’s overall governance practices and identify which directors or board-level committees have been charged with oversight of AI-related risks, (ii) will evaluate the board’s response to, and management of, this issue as well as any associated disclosures and (iii) may recommend against certain directors if the board’s oversight, response or disclosure concerning AI-related issues are deemed insufficient.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

From Boardspan this Week:

AI and Governance: What Every Board Needs to Know

“Generative AI has changed the game for every business. What does that mean for boards and corporate governance? We were fortunate to have Ayesha Khanna, one of the world's leading experts on AI and business (and also a board member) speak with Boardspan CEO Abby Adlerman about the impact of AI on companies and boards, and what boards need to know about AI to be prepared.” BOARDSPAN

Across the Board

Meta to End Fact-Checking
Since Trump's November victory at the polls over Kamala Harris, Meta and other major technology companies have also sought to engender goodwill with the incoming administration

“Meta CEO Mark Zuckerberg on Tuesday said the social media company is ending its fact-checking program and replacing it with a community-driven system similar to that of Elon Musk's X. Zuckerberg cited the outcome of the 2024 U.S. presidential election as underlying the decision, calling it a ‘cultural tipping point towards, once again, prioritizing speech.’… The announcement came a day after Meta said former Ultimate Fighting Championship chief executive Dana White, a close ally of President-elect Donald Trump, would join its board, and shortly after former UK deputy prime minister Nick Clegg announced he was stepping down as president of global affairs.” CBS

Dana White, the Ultimate Fighting Championship C.E.O., Joins Meta’s Board
Mr. White, a close ally of President-elect Donald J. Trump, further strengthens the social media giant’s connections with the incoming administration

“Meta is adding Mr. White, a longtime friend of President-elect Donald J. Trump, to the social media company’s leadership amid a series of moves to strengthen its ties to the incoming administration. Last week, the company shook up the top of its policy team, appointing a longtime executive known for his Republican ties as head of global policy. Meta has also donated $1 million to Mr. Trump’s inaugural fund… Meta, which owns Facebook, Instagram and WhatsApp, created three new board seats for the appointments, bringing the total number to 13.” NEW YORK TIMES

U.S. Steel, Nippon Steel Challenge Biden’s Move to Kill $14.1 Billion Deal

Companies accuse president, head of steelworkers’ union and Cleveland-Cliffs CEO of teaming up to block transaction

“Biden on Friday rejected Nippon Steel’s purchase of the storied American steelmaker, citing national-security concerns… The companies said three drafts of a national-security agreement were submitted to Cfius to address concerns about the deal. Those included commitments for nearly $3 billion of investments in U.S. Steel’s plants, guarantees to produce steel in the U.S. and a proposal to grant Cfius approval over independent members of a board that would oversee U.S. Steel’s operation.” WALL STREET JOURNAL

CEO Compensation and the Workforce at Large

Directors must speak up when it comes to determining when CEO pay is excessive

“There is so much data that is available to you on CEO pay and executive pay in general from peer groups, publicly disclosed information and surveys. There really should be no question in your mind if you’re on a committee, where your CEO stands relative to the market and relative to your industry. And there’s scads of data on how well your company is performing. You can line the information up and, if you don’t feel like you’re getting the right information from your consultant or from management, keep asking because the information is there.” DIRECTORS & BOARDS

More Companies Are Buying Bitcoin, Betting on Rewards Over Risks

It is a sharp pivot away from the cautious approach of the traditional corporate treasury, normally charged with safeguarding cash rather than chasing higher returns

“A couple of weeks after the presidential election, Joe Davy, chief executive of the marketing firm Banzai, sent an email to the company’s board of directors: He wanted Banzai to start buying Bitcoin… ‘I cannot understand how a risk-averse board could justify an investment in digital assets, given we know they swing quite significantly,’ said Naresh Agarwal, an associate director at the Association of Corporate Treasurers, a trade organization. ‘It is quite an opaque market.’ The companies buying crypto are following the example set by MicroStrategy, a business analytics software firm that started amassing Bitcoin in 2020. It has since built a Bitcoin stash that has risen to more than $40 billion, dwarfing the value of its software business.” NEW YORK TIMES

The Sustainability Dividend: A Primer on Sustainability ROI

As sustainability becomes a business imperative, companies face growing pressure to determine the return on investment (ROI) of their sustainability efforts

“Data from The Conference Board show that 41% of polled executives either believe their companies are underperforming or are uncertain when it comes to assessing the ROI of their sustainability investments, while only 17% express similar concerns about measuring traditional ROI. Amid global challenges such as economic uncertainty, which pressures businesses to invest strategically for cost savings and risk mitigation, and climate change and resource scarcity, which require investments to adapt and respond.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERANCE

Seat at the Table

• Macy’s appoints to its board Robert Chavez, former President and CEO of Hermès Americas

• Supply chain firm Kinaxis elects to its board Lynn Loewen, former President of Minogue Medical

• Performative chemistry firm Chemours announces to its board Joseph Kava, VP of Data Centers at Google

• Steel producer Cleveland-Cliffs adds to its board Jane Cronin, SVP of Finance of The Sherwin-Williams Company

• CRISPR Therapeutics welcomes to its board Dr. Briggs Morrison, CEO of Crossbow Therapeutics 

• Addtronics announces to its board Adam Meyers, Sector CEO of the Medical and Environmental Divisions at Halma

• Supply chain firm Celestica elects to its board Amar Maletira, CEO of Rackspace Technology

• The Hartford appoints to its board Annette Rippert, former CEO of the Strategy and Consulting Group at Accenture

• Magnolia Oil & Gas welcomes to its board Lewis Ropp, former Senior Managing Director and Senior Equity Partner of Barrow Hanley Global Investors

• Tilly’s announces to its board Michael Relich, former Co-CEO of PacSun

• SolarEdge elects to its board Yoram Tietz, Chairman of the Friends of Sheba Medical Center; and Gilad Almogy, Founder and CEO of Ultima Genomics

About Boardspan
Boardspan helps boards raise the bar on their critical governance mandates by combining cutting edge digital capabilities with high-touch consulting services. They are leaders in board assessments, individual director & CEO evaluations, board succession strategy & search, skills & composition analyses, and bespoke advisory work. Boardspan only works with boards, bringing deep experience, objectivity, an analytical orientation, and insight-driven recommendations. Clients include Blue Shield (CA), Colgate-Palmolive, Deckers, Dynatrace, elf Beauty, HubSpot, Ingersoll Rand, KKR, Lam Research, the PGA, Roblox, Salesforce, Synopsys, the USOPC, and scores more.