9/26/24 – Issue 9.36 – Your weekly news on all things board. 

Whether they call it "growth," "scaling," or "hitting the numbers," most boards are looking to help companies size up. So, it's worth noting that the "bigger is better" motto faces some serious headwinds from the Justice Dept, which in recent years has brought antitrust cases against many of the largest companies in the U.S. This week, the government opened a suit against Visa, accusing it of running a debit card monopoly that has allegedly cost American consumers and businesses billions of dollars. Antitrust suits have been opened against Google, Apple, Amazon, and plenty of others as the government seeks to ensure competition in industries whose dominant players have for some time had the resources to buy or outmaneuver most rivals. Downstream impacts on the industries involved and on future acquisitions could prove significant. Meanwhile, some big transitions announced this week include the sudden departures of CEO John Donahoe from Nike and several Open AI execs including CTO Mira Murati as the firm announces its intentions to become for-profit, while filmmaker James Cameron joins the board of directors at Stability AI, an artificial intelligence firm focused on computer-generated imagery (CGI) and video production. Cameron's arrival on the corporate stage comes 40 years after his iconic film The Terminator portrayed the existential threats posed by rogue artificial intelligence and comes at a critical juncture for the entertainment industry (and all business) as it grapples with a new wave of AI-related issues concerning everything from copyright and originality to ethics and workforce upheaval. 

In the Spotlight

Justice Department Sues Visa, Alleges Illegal Monopoly in Debit-Card Payments

U.S.’s largest card network blocked rivals through payments and higher fees levied on merchants, government says

“The lawsuit says Visa used carrots and sticks to keep potential competitors off its turf and to punish merchants that did business with rivals… To keep its share of transactions high, Visa punished merchants by levying higher fees if they routed some transactions to another card network, the Justice Department said. Consumers are also losers from the arrangement, the government said, because card fees can flow through to them in the form of higher prices for goods and services.” WALL STREET JOURNAL

From Boardspan this Week:

The 2024 Board Benchmark Report

The power of performance benchmarking is undeniable. For boards, it’s essential to understand how they stack up against peers, identify new trends and lean into the broader governance landscape. The 2024 Board Benchmark Report enables boards to build on successes and identify areas for improvement, ensuring continuous growth and effectiveness. Learn how your board compares and what you can do to achieve excellence.

Across the Board

Nike C.E.O. John Donahoe Abruptly Retires Amid Declining Sales
Elliott Hill, an executive who left the company after Donahoe’s appointment in 2020, will return as chief executive

“Nike’s board announced the abrupt retirement of its chief executive, John Donahoe, on Thursday, amid merchandising struggles and a falling stock price. Elliott Hill, who retired from the company in 2020, will return as a chief executive next month.” NEW YORK TIMES

OpenAI to Become For-Profit Company 
Planned restructuring comes amid personnel upheaval including resignation of chief technology officer

“OpenAI is planning to convert from a nonprofit organization to a for-profit company at the same time it is undergoing major personnel shifts including the abrupt resignation Wednesday of its chief technology officer, Mira Murati. Becoming a for-profit would be a seismic shift for OpenAI, which was founded in 2015 to develop AI technology ‘to benefit humanity as a whole, unconstrained by a need to generate financial return,’ according to a statement it published when it launched." WALL STREET JOURNAL

Cameron’s Value Add to the Board of an AI Company

Filmmaker James Cameron has joined the board of directors of artificial intelligence (AI) firm StabilityAI, 40 years after making a film about its risks

“The intersection of generative AI and CGI image creation is the next wave… One of Cameron's first challenges in his new role will be to shore up Stability AI's position in the wider generative AI landscape, where it faces stiff competition… And Cameron is joining the AI industry at a critical time for a different reason - copyright…. Cameron has a real opportunity to change the narrative and build a positive view of AI.” BBC

UAE Mandates Inclusion of Women in Corporate Boards of Directors By 2025

This move, which targets both private and public companies, reflects the government’s broader commitment to achieving gender balance in corporate leadership and governance

“The UAE Ministry of Economy has announced a new mandate requiring private joint-stock companies to include women on their boards of directors, starting in January 2025. The decision aims to enhance female representation in leadership roles across the corporate sector… companies will need to appoint at least one woman to their board after the current terms expire… The new regulation is seen as a crucial step in closing the gender gap in corporate leadership and empowering women in business, and the mandatory inclusion of women on boards is a bold step forward, one that is expected to pave the way for future generations of female leaders in the UAE.” VOGUE ARABIA

How To Thrive When Uncertainty Becomes the New Norm for Governance
As organizations continue to navigate economic, environmental, and social challenges, the relationship between business and society is becoming ever-more entwined and interdependent

“The imperative for organizations to consciously consider their social impact is increasingly evident. In recent years, there has been growing recognition that organizations have a responsibility not just to their shareholders, but to each of their key stakeholders, including society. But what does that mean and how can chairs and boards help drive an appropriate focus on this?” FORBES

Governance Watchdogs Take Fright as ‘Zombies’ Stalk US Boardrooms
Directors retaining seats without backing from majority of shareholders prompts “Zombie” concern

“Darren Walker, the head of the $16bn Ford Foundation, has been one of the world’s leading philanthropists for more than a decade. He has rubbed elbows with US presidents and Elton John. He is also a zombie. In August, Walker failed to win a majority of shareholder support for his re-election at apparel company Ralph Lauren, where he has been a board director for four years. He remains on the board. This vote tally added Walker to a dubious list of ‘zombie’ board members — people who have failed to win at least 50 per cent support from shareholders and yet remain at their company’s top table.” FINANCIAL TIMES

Hot Topics for Boards and Committees
What boards are talking about this year, from AI to Management Succession Planning

“The following topics are likely to be on the agenda for public company boards and board committees in the coming year....  Addressing the Use of Artificial Intelligence... Overseeing Management Succession Planning... Monitoring the Company’s Compliance Culture... improving Committee Coordination... Monitoring the Business Impact of Emerging Trends..." HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

How Boards Can Help Harness Human Capital
Elevating board effectiveness is essential in a changing business and talent landscape

“In the modern knowledge-based economy, human capital has emerged as a crucial element for driving competitive advantage. For boards, integrating human capital expertise into their governance structure is not just beneficial; it is essential for effective leadership and organizational success. As the business landscape evolves, so too must the focus of boards on the people who are fundamental to their success." DIRECTORS & BOARDS

Build a Better Board
Companies benefit when they recognize board committees’ important role in corporate governance

“The phrase ‘effective corporate governance’ may conjure up the image of a full board of directors sitting around a table, but committees are where most of the real work of the board happens. Committees are the small groups whose work remains out of the spotlight; they are where people have the opportunity to ask questions, trade-offs can be considered, actual debate happens, and recommendations are formulated to be presented to the entire board." MIT SLOAN

Seat at the Table

• Southwest Airlines welcomes to its board Robert Fornaro, former President and CEO of Spirit Airlines

• Energy drink firm Celsius Holdings appoints to its board Hans Melotte, former President of Global Channel Development at Starbucks

• Service platform EverCommerce announces to its board Alexi Wellman, former VP of Finance and Global Controller at Yahoo

• Hormel Foods adds to its board Debbra Schoneman, President of investment banking firm Piper Sandler Companies

• Tanger appoints to its board Sonia Syngal, former CEO of Gap

• Mid-America Apartment Communities announces to its board Sheila McGrath, former Senior Managing Director at real estate firm Evercore ISI

• Evergy welcomes to its board Dean Newton, President and CEO of dental insurance carrier Delta Dental; and Jon Rolph, CEO of Thrive Restaurant Group 

• Invoicing firm BlackLine elects to its board David Henshall, former President and CEO at Citrix

• Oncology firm BeiGene adds to its board Shalini Sharp, former EVP and CFO at Ultragenyx

• Sunnova Energy International appoints to its board Corbin Robertson, Founder and Managing Partner of CIII Capital Management; and Jeremy Thigpen, CEO of drilling firm Transocean

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.