Across the Board
Retail & Consumer CEOs See Shorter Tenures as Boards Act Quickly
There is a fresh lack of patience at the board level
“When two of the most powerful brands in retail and packaged foods last month ousted their CEOs, it signaled corporate boards are more ready to toss top executives before activist investors tell them to act. The tenure for U.S. retail and packaged goods company CEOs has this year on average been about 7 months shorter than chiefs who were in office in 2024 in the autos, finance, tech and manufacturing industries… And now, their time in the top job may be shrinking as consumers buying iced lattes, chocolate bars and detergent become pickier, leaving companies with less time to innovate and demonstrate performance. At the same time, corporate directors are quicker to act, bankers, lawyers and academics say, forcing CEOs to deliver quickly or face an abrupt exit.” REUTERS
Lonely at the Top No More
One of a board’s most important responsibilities is setting up their new CEO for success, ensuring the arduous work of the succession and selection process truly pays off
“As boards know all too well, the runway CEOs have to achieve success is short. In these high-stakes moments, how can boards give their CEOs the best chance of succeeding? And what can be done to prepare the next generation of CEOs for the role? Increasingly, we see boards turning their attention toward executive mentoring as a tool to support CEO transitions. Executive mentors can offer invaluable advice that CEOs will struggle to find elsewhere. These mentors are typically leaders who have sat in the CEO seat, faced similar challenges and know how best to guide companies through inevitable storms." DIRECTORS & BOARDS
The Palace Coup at the Magic Kingdom
The inside story of how Bob Iger undermined and outmaneuvered Bob Chapek, his chosen successor, and returned to power at Disney
“At 5 p.m. on Feb. 25, 2020, Bob Chapek and Bob Iger settled into matching directors’ chairs on the Disney studio lot for a series of live media interviews. The company had just shocked pretty much everybody by announcing that the little-known Mr. Chapek would be replacing the wildly popular Mr. Iger as chief executive…. That agreement nearly fell apart over the issue of whom, exactly, Mr. Chapek would answer to: Mr. Iger or the board. A last-minute compromise, reached without a board vote, had Mr. Chapek reporting to both. That proved a recipe for conflict — as Mr. Chapek soon began to realize.” NEW YORK TIMES
JPMorgan CEO Jamie Dimon Says Succession is His Most Important Task
Dimon has been at the helm of the largest U.S. lender since 2006
“JPMorgan Chase is focused on succession planning and has a cadre of ‘extremely’ qualified people who are prepared to run the bank eventually, CEO Jamie Dimon said on Tuesday. Dimon and his team spend a lot of time thinking about what happens after he retires, Dimon said, without giving a timeframe. ‘We all want to get that exactly right,’ he told pension funds and institutional investors at a conference in New York. Dimon previously signaled his timeline for stepping down is no longer five years and could be as soon as two-and-a-half years.” REUTERS
Wisconsin Takes a Backward Step on Holding Companies Accountable
A bill authored by U.S. Rep. Bryan Steil would mute the voices of shareholders by taking away a company's obligation to publish such resolutions in their proxy statements
“Whether the problem is opioid addiction, climate pollution or toxic drinking water, blocking investors from addressing these issues ultimately hurts Wisconsin communities. Yet legislation introduced by Congressman Steil, the 1st District Republican from Janesville, would hobble investors’ ability to drive responsible corporate behavior. The bill, scheduled for a hearing Tuesday, would eliminate the federal requirement that shareholders’ proposals on such issues be presented for fellow investors to vote on in a company’s annual meeting announcement called the proxy statement. Shareholder resolutions offer one of the most effective tools investors have to hold companies and their boards of directors accountable for activities that are risky to both investors’ assets and our communities.” WISCONSIN EXAMINER
How Many More Responsibilities Can Audit Committees Take On?
Cybersecurity is a top priority over the next 12 months for audit committees
“As the regulatory environment grows in complexity and organizations address new and continuing challenges, additional expectations are placed on audit committees. The scope of their responsibilities continues to expand beyond the traditional remit of financial reporting and internal controls, internal and external audit, and ethics and compliance programs. Topics like cybersecurity, artificial intelligence (AI), and climate are now regularly showing up on many audit committee agendas, especially when it’s a matter of complying with regulatory disclosure requirements.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Don't Lose Sight of Cybersecurity
While AI and other technologies receive deserved attention, directors must continue to monitor for cyber threats
“With the rise of AI, boards may be guilty of chasing the new, shiny object, becoming distracted and devoting less attention to ongoing cybersecurity challenges. But there is too much at stake to underestimate cybersecurity risks or become complacent — ongoing governance is necessary because cyber threats are constant, and a bad actor needs to be right only once to cause significant damage to an organization. The numbers show that cybersecurity risk is not going away — in fact, it is actually increasing. In the RSM US Middle Market Business Index Special Report: Cybersecurity 2024, 28% of middle-market executives surveyed reported suffering a data breach in the previous year, tying a record high in RSM's research. As evolving risks threaten operations and bad actors relentlessly seek any potential vulnerability, cybersecurity needs to be a focal point of all board governance strategies.” DIRECTORS & BOARDS
Rewriting the Rules for Corporate Elections
ANBs (advance notice bylaws) are a focal point in public conversations about shareholder activism and in legal disputes between boards and shareholders
“For the last decade and a half, boards of directors have been gradually rewriting their companies’ election bylaws. Specifically, boards have gradually added more and more disclosure requirements that shareholders must meet in order to nominate alternative board candidates. These changes have made it more costly for shareholders, such as activist hedge funds, to launch election contests.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Hedge Fund Pushes for End of Murdochs’ Control at News Corp
Starboard Value said that political disagreements among Rupert Murdoch’s children could be “paralyzing” for the media firm
“The Murdoch family’s control over its media empire has long been the subject of intrigue and drama. It is also the latest target of the prominent shareholder activist Jeffrey C. Smith. Mr. Smith’s hedge fund, Starboard Value, has submitted a nonbinding shareholder proposal that could end the Murdochs’ control, according to a letter to fellow shareholders seen by The New York Times. The plan shines a light on the family’s power over its media holdings as it is about to be subjected to courtroom scrutiny... The Murdochs’ shares, as well as similar controlling stock for Fox, are held in a family trust that Rupert Murdoch controls. That control will pass to his four adult children after he dies, but three of them are fighting their 93-year-old father in court over his move to give his son Lachlan Murdoch majority control of the trust when Rupert Murdoch dies.” NEW YORK TIMES
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