Across the Board
California Legislature Approves Bill Proposing Sweeping A.I. Restrictions
Gov. Gavin Newsom must now decide whether to sign into law the fiercely debated legislation
“California lawmakers on Wednesday overwhelmingly approved legislation that would create new restrictions for artificial intelligence, clearing a path to the governor’s office for a bill that might set the national standard for regulating the new technology… Gov. Gavin Newsom has not indicated his position on the legislation and has faced strong pressure from many in the tech industry to veto it. The proposed regulations have become embroiled in a fierce debate over how to regulate A.I., which, depending on whom you ask, has the potential for great benefits and harms to humanity.” NEW YORK TIMES
Google’s Antitrust Defeat Opens the Door to Lawsuit from Yelp
Yelp complained for more than a decade that Google tilted the search market in its favor
“When a federal judge declared Google an illegal monopoly in a landmark ruling this month, it was not immediately clear what consequences the world’s largest search engine provider would face. But one result is coming into focus: Google’s antitrust defeat opened the door to more lawsuits. On Wednesday, Yelp, the popular online service that lets people find and review local businesses, sued Google in federal court in San Francisco. Yelp claims that Google used its dominance as a general, or all-purpose, search engine to gain an unfair advantage in local search services. Yelp is seeking unspecified monetary damages and an order for Google to stop its anticompetitive practices in a jury trial.” NEW YORK TIMES
Intel Board Member Resigns After Differences Over Chipmaker's Revival Plan
Tan leaves as the company endures one of the bleakest periods in its five-decade history that has left it vulnerable to a potential activist shareholder attack
“The sudden resignation of a high-profile Intel board member came after differences with CEO Pat Gelsinger and other directors over what the director considered the U.S. company’s bloated workforce, risk-averse culture and lagging artificial intelligence strategy, according to three sources familiar with the matter. Lip-Bu Tan, a semiconductor industry veteran, had said he was leaving the board… The former CEO of chip-software company Cadence Design joined Intel’s board two years ago as part of a plan to restore Intel’s place as the leading global chipmaker.” REUTERS
Three Board Members Resign from Struggling BurgerFi
SEC filings express doubt as the company disclosed it has begun reviewing strategic alternatives and defaulted on its loan
“In another indication of looming bankruptcy, BurgerFi International this week said it has hired a chief restructuring officer, who will manage the company’s planned reorganization… As of Friday, the chain had not filed for bankruptcy, but the parent of both BurgerFi and Anthony’s Coal-Fired Pizza brands indicated that might be coming soon, citing deepening financial losses… Meanwhile, three members of BurgerFi’s board also resigned on Aug. 14, though the filing indicated the move did not reflect any disagreement with the company. Allison Greenfield, Vivian Lopez-Blanco and Gregory Mann left the board, in a move that was immediate.” RESTAURANT BUSINESS
The Sound of Silence in Corporate Director Resignations
Outspoken director resignations, driven by protesting a firm's operations, are vital to corporate governance by alerting shareholders and prompting market pressure for necessary changes
“Directors hold the right to resign, specifically in protest, from their respective firm, which can act as a powerful governance tool in the corporate structure. Directors express vocal opposition to alert investors to internal misconduct and mitigate the aforementioned information asymmetry. When unable to create effective change from within, they may opt to ‘exit’ from the firm, signaling that their values are incompatible with the policies of the firm. Due to the inherent disadvantages of resignation, this tool can be particularly effective in articulating the need for change to investors and the public.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
IBM Shuts China R&D Operations in Latest Retreat by U.S. Companies
U.S. companies doing business in China also face stricter scrutiny by American policymakers in strategic areas such as artificial intelligence
“The company is moving its China R&D functions to other overseas facilities, Jack Hergenrother, an IBM executive, told employees at a virtual meeting on Monday morning, according to employees who attended. Hergenrother said IBM faced intensifying competition in China with its infrastructure business declining in the past few years… IBM plans to concentrate its R&D in several regions… Geopolitical tensions between the U.S. and China have led many multinational companies to reassess their business in China, with some laying off employees and relocating operations to other countries.” WALL STREET JOURNAL
5 Moments That Make or Break a CEO-Board Chair Relationship
What distinguishes an effective CEO-board chair relationship? Trust.
“Over the past decade, a growing number of U.S. boards have followed their European counterparts by separating the chair and CEO roles. Today, almost 60% of S&P 500 companies have done so, with 39% appointing an independent board chair… It’s a trend many shareholders applaud, arguing separation increases the board’s independence and leads to more effective oversight. But it’s an approach that’s not without risk. Separating an organization’s two most powerful leadership roles introduces a critical new dynamic: the relationship between the board chair and CEO.” HARVARD BUSINESS REVIEW
Blind Spots in the C-Suite & Boardroom
Looking back on business failures often reveals blind spots that led to lack of understanding, strategic error and missed opportunities
“We’ve all heard the adage that what we don’t know can be more damaging to reputation, brand image, market standing and competitive position than what we do know. When what we don’t know is something we should know, a blind spot exists. Whether they relate to cultural, strategic, operational or governance issues, blind spots are almost always a factor underpinning a business failure… We define a blind spot as something pertinent to an organization’s viability that the board and C-suite have not focused on at all or enough.” CORPORATE COMPLIANCE INSIGHTS
Red Lobster Set to Bring on Former P.F. Chang’s Leader as CEO
Bankrupt seafood chain is slated to be sold in September
“A group of lenders set to take over Red Lobster have tapped a recent chief executive of Asian restaurant chain P.F. Chang’s to run the struggling seafood restaurant brand. Damola Adamolekun, most recently an operating partner at private-equity firm Garnett Station Partners, would take over as Red Lobster’s CEO pending final court approval of the chain’s sale, which is scheduled for next month. Orlando, Fla.-based Red Lobster filed for chapter 11 bankruptcy in May, one of a string of restaurant chains that have filed for bankruptcy protection or sought buyers in the past year.” WALL STREET JOURNAL
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