Director’s Domain
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August 17, 2023
Last week, the Wall Street Journal reported that the first lawsuits against companies for their diversity initiatives were hitting the courts. What would be the outcome? This week, we got an answer. A federal court dismissed a lawsuit claiming that Starbucks set unlawful minority hiring goals and vendor incentives. The dismissal does not bode well for other, similar legal challenges where activists are attempting to roll back company policies designed to increase diversity in the workforce. At the same time, nearly half of employees surveyed in a recent Harris Poll say that ESG initiatives in the workplace lack sincerity. Both of these things are reminders that even as companies win in court against activists, the board still needs to keep their eyes open to the reality of ESG in their organizations. In other news, is “Founder Syndrome” a problem, and are boards the solution?; How independent directors bring an unbiased perspective to the boardroom; and 2023 proxy filings shed some light on 4 key trends in board compensation.February 02, 2023
If you want to see how activist investors can impact companies and boards, look no further than the news right now. Hindenburg Research, an activist short seller that targets companies to expose fraud and irregularities, set its sights on Adani Group, costing the Indian conglomerate tens of billions of dollars in a matter of days. Back in the U.S., Salesforce added three new board members amid continued pressure from activist investors calling for better cost control and leadership. As we gear up for proxy season, we’re sure to hear more from activists this quarter. The best defense against activist agitation? Good governance. How do you achieve that? Two words: Be Intentional. With your governance planning, with your short- and long-term strategies, and in determining what will truly create value in your organization. Model good culture and good relationships. Revisit our 2023 outlook for some advice on making intentional plans this year. In other news, practical advice on Proxy Season, and how to approach board/shareholder relations.December 01, 2022
CEO succession planning is hard. Just ask Disney. Or Salesforce. Or Boardspan’s Board Performance Assessment Benchmarks, which show that across the many public, private, and nonprofit clients we serve, Management Succession Planning is the biggest challenge facing boards this year. Observers are beginning to ask how the Disney board can justify its costly about-face on supporting CEO Bob Chapek. The media reminds us that with the exit of Bret Taylor, Salesforce CEO Marc Benioff has now outlasted two hand chosen co-CEOs. Interestingly, a new study shows that companies whose boards have an executive chair, a role often filled by the former CEO, are significantly more profitable than those who don’t keep their former leaders close. Clearly the real magic comes when boards figure out how to get the valuable strategic input from a former leader, without overshadowing the newer executive.July 26, 2018
CEO turnover. It’s happening more often and with less predictability than ever before. This week a Canadian pipeline company lost its CEO amid a board investigation. Lululemon presented its new CEO, several months after the apparel maker’s former chief executive stepped down following allegations of misconduct. The CEOs of Fannie Mae and Gilead Sciences announced their departures. We learned that Fiat Chrysler’s CEO died unexpectedly following surgery. Boards that haven't mapped out a leadership path for the future will want to check out the Wall Street Journal article on the importance of succession planning for catastrophic events and learn about the real costs of not having a strong succession plan in this article from the Boardspan Library. Organizations that have recently been through a CEO change might take a closer look at the three actions Harvard Business Review suggests boards can take to help new CEOs address their leadership development gaps. In other news, the board of Papa John’s put in place a “poison pill” to prevent the company’s founder from regaining control. And the median pay to corporate directors hit $300,000.January 11, 2018
No doubt about it, more is being asked of boards. Shareholders are pressing the Facebook board to initiate a risk committee to address concerns about “fake news” and social media addiction. Investors are demanding that the Apple board address issues surrounding alleged physical and mental harm the company’s products may do to children. Employees are winning more expensive class action suits against companies that don’t treat them fairly, which in turn will put more pressure on boards to oversee HR policies and workplace compliance issues. Plus, rapid changes in technology are requiring some board members to go all-out to stay on top of the latest innovations—in some cases traveling as far as China on board “field trips” designed to expand their tech knowledge. It’s a lot to manage, and yet these many make-or-break issues cannot squeeze strategy out of the board conversation. In fact, Harvard Business Review suggests a new era of breathtaking innovation will demand that corporations commit to bigger picture thinking and greater, long-term risk taking. We think the best way to handle the increased pressure is by devoting a little more time to preparing, so you can spend less time to reacting. To get started, see Boardspan's special report: “The 2018 Boardroom: 7 Issues That Shouldn’t Take You By Surprise.”Stay In The Know
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