Across the Board
Fed and SEC Probe Goldman Sachs’ Role in Final Days of Silicon Valley Bank
Government looks into two Goldman deals with the bank that preceded the collapse
"Silicon Valley Bank had booked a $1.8 billion loss on the sale of a bond portfolio to Goldman. The Wall Street giant was also an underwriter for a failed share sale by the bank that eventually paved the way for its meltdown…The Fed and the SEC are seeking documents related to Goldman's role as both buyer of the securities portfolio and adviser on the capital raise, the report said. They are looking to see if Goldman's investment banking side and its trading division were improperly communicating about the portfolio sale, the report added.” REUTERS
The War Within Goldman Sachs
Partner issues with CEO David Solomon’s leadership are causing stress within the firm
“Cracks are forming in a Wall Street institution: the vaunted Goldman Sachs partnership. Most bank CEOs make big decisions with a cadre of executives. Goldman isn’t like other banks. Some 24 years after becoming a publicly traded company, Goldman maintains a partnership of about 420 members, many of whom think they’re just as important as the CEO. In his nearly five years as CEO, Solomon, 61, has sought to impose corporate discipline on the freewheeling structure. Partners accustomed to little oversight and lots of deference aren’t thrilled…Solomon has sparred over bonuses with the partner who leads the bank’s traders. Another longtime partner threatened to quit when Solomon restructured the bank’s private-investing businesses. John Rogers, a Goldman partner since 2000, and the secretary to the bank’s board, expressed concerns to Solomon about his DJ side gig, according to people familiar with the matter, saying it wasn’t a good look for the CEO of one of Wall Street’s most formidable firms.” THE WALL STREET JOURNAL
Deloitte: Board Diversity Will Start Mirroring U.S. Diversity by 2060
Despite recent strides in diversity, representing the full U.S. population is a bigger challenge
“Women and people from underrepresented racial and ethnic groups hold historically high levels of board seats, according to Deloitte’s latest census of Fortune 500 boards: They make up 44.7% of Fortune 500 directors. Women from underrepresented racial and ethnic groups have gained the most in the past couple of years. In Fortune 500 firms, the increase in the share of directors has been of 47% for African American women, 27% for Asian and Pacific Islander women, and 24% for Hispanic and Latina women, Deloitte reports. Yet, women from these groups still only represent 7.8% of Fortune 500 directors.” FORBES
PGA Tour/LIV Golf Merger Faces Antitrust Investigation
The deal’s outcome may be delayed by at least a year
“The Justice Department has notified the PGA Tour that it will review the Tour’s planned merger with LIV Golf’s Saudi backers for antitrust concerns, people familiar with the matter said, initiating a regulatory obstacle to the stunning deal that the warring golf bodies hope will stabilize the divided sport.” THE WALL STREET JOURNAL
PGA Tour Player Members of the Board Knew Nothing of Merger
The Tour’s 5 player board members and a 16-person advisory council were in the dark
“Even without a labor union, players theoretically have a say in tour operations: The 11-member board includes five seats for players, and there is a 16-player council that “advises and consults” with board members and the tour’s commissioner, Jay Monahan. But when tour leaders negotiated a framework agreement to reshape the sport in the most consequential ways since the modern tour’s founding in the 1960s, players were not in the room. Rory McIlroy, the world’s third-ranked golfer and a member of the tour’s board, learned of the deal a week after it was signed behind closed doors at a Four Seasons hotel in San Francisco…Although McIlroy has signaled his support for the deal, other players with board seats have been publicly noncommittal.” THE NEW YORK TIMES
Dollar Tree Stock Surges with Plans for Revamp
Activist investor Mantle Ridge brought in former Dollar General CEO for turnaround
“Dollar Tree Inc. jumped the most in a year after top executives detailed the steps they’re taking to further an activist-backed turnaround effort following years of underperformance at the discount retailer. The overhaul depends in part on improving supply-chain capabilities, modernizing technology systems and boosting wages, Chief Executive Officer Rick Dreiling said Wednesday. But a lot of it comes down to old-fashioned retail basics such as upgrading stores that Dreiling said have been starved for investment.” BLOOMBERG
Nasdaq CEO Friedman Working to Transform the Organization
$10.5B acquisition of Adenza is the largest deal in company history
“Even as the Adenza deal was coming together, Friedman was pouring her energy into another critical effort: Nasdaq’s bid to win the initial public offering of British chip designer Arm, which is likely to be the biggest IPO in an otherwise quiet year for listings…In January 2017 (Friedman) became CEO and began work on what became known as the “strategic pivot.” Friedman presented her vision at a board meeting in San Francisco in August 2017. Her plan: Nasdaq would evolve into a provider of technology, data and analytics to the financial industry. If successful, the new direction would bring fatter profit margins and replace volatile trading revenues with more recurring, subscription-based income…Acquiring Adenza is meant to push Nasdaq further in the same direction.” THE WALL STREET JOURNAL
Climate Change Lapses Can Target Boards For Removal
Despite exceptional stock performance, failure to address climate change can lead to turnover
“A recent shareholder proposal against Toyota Motor Corp. is an indication that corporate boards are going to have to continue to address concerns about climate change or be targeted for removal – even if they’ve achieved exceptional stock price performance. At its recent annual shareholder meeting, some investors pushed to deny the re-election of the board chairman and other members of the board even though the car maker has delivered a 62 percent return (including dividends) over the last five years.” CORPORATE BOARD MEMBER
10 Questions You Must Ask When Preparing for Activist Shareholders
The information you need to develop a crisis plan
“As the 2023 proxy season comes to a close, attacks by high profile activist hedge funds at blue-chip companies continue to dominate headlines, and a close review of campaigns conducted during the first season under the SEC’s new universal proxy rules reveals changes to strategy and tactics that companies, activists and their advisors are carefully considering. As such, it’s no surprise that activism preparedness continues to rank high on the priority list of many public company boards…the boards that respond most effectively to major corporate crises are those that approach crisis preparedness proactively and holistically rather than from a reactive posture focused on individual risk silos.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Six Actions CEOs Should Never Take with Their Boards of Directors
In a tough balancing act, these are the clear lines that everyone should respect
“Boards have a difficult job. On one hand, they have a fiduciary responsibility to shareholders for oversight. On the other hand, it is not their job to run the company. That falls to the CEO. Boards must walk a tightrope between the two. Some things a board has a legitimate right to know and be a part of. However, the board has no right or authority to involve itself in most company affairs. It is critical the board and CEO are clear on what the board should and should not be involved in.” INDUSTRY WEEK
