Across the Board
Judge Spares Google Major Penalties in Search Monopoly Case
While Google avoids a breakup and Apple contract bans, the ruling mandates data disclosures, setting a precedent with implications for big tech governance
"Google won't have to sell its Chrome browser, a judge in Washington said on Tuesday, handing a rare win to Big Tech in its battle with U.S. antitrust enforcers, but ordering Google to share data with rivals to open up competition in online search…. U.S. District Judge Amit Mehta also ruled Google could keep its Android operating system, which together with Chrome help drive Google's market-dominating online advertising business. The ruling results from a five-year legal battle between one of the world's most profitable companies and the U.S., where antitrust regulators and lawmakers have long questioned Big Tech's market domination…. While sharing data with competitors will strengthen rivals to Google's advertising business, not having to sell off Chrome or Android removes a major concern for investors who view them as key pieces to Google's overall business. Google faces a major threat from increasingly popular AI tools including OpenAI's popular ChatGPT chatbot, which are already eroding Google's dominance…. The ruling was also a relief for Apple and other device and Web browser makers, whom Mehta said can continue to receive advertising revenue-sharing payments from Google for searches on their devices. Google pays Apple $20 billion annually.” REUTERS
Kraft Heinz to Split in Two, Unwinding Years of Consolidation
The split marks a sharp reversal from its 2015 mega-merger, signaling new boardroom thinking on scale and focus
"Kraft Heinz, the gigantic packaged foods business, is splitting into two separate publicly traded businesses, the company announced Tuesday, the latest mega food business to unwind its strategy to offer everything for everyone. The new companies haven’t yet been named. One will focus on faster-growing businesses, such as sauces, spreads and shelf-stable meals. Those brands include Heinz, Philadelphia and Kraft Mac & Cheese. The other company will focus on the struggling grocery items and food away from home businesses, including the Oscar Mayer, Kraft Singles and Lunchables brands…. Kraft Heinz expects the new companies will start operating separately in the second half of 2026. The split will reverse a massive but largely unsuccessful 2015 merger arranged by Warren Buffett’s Berkshire Hathaway and the investment firm 3G Capital, Heinz and Kraft’s owners at the time. The merger brought dozens of iconic packaged food brands under one umbrella, creating the third-largest food company in North America. The combined company quickly went to work reducing expenses to boost profits. But after a few years, the company started to lose value fast.” CNN
PepsiCo Board Receives Elliott’s Push for Strategic Overhaul
The activist investor calls on PepsiCo’s leadership to accelerate transformation, pushing for higher returns, faster growth, and greater long-term value
“Shares of PepsiCo rose Tuesday after Elliott Investment Management said it had built a $4 billion stake in the beverages and snacks company. The activist investor confirmed its position in a letter to PepsiCo’s board, noting that its stake makes it 'one of the company’s largest investors.' In an attached presentation, Elliott made a case for how the beleaguered company could reaccelerate growth. 'By embracing the proposed actions, PepsiCo possesses a unique opportunity to accelerate revenue and earnings growth and drive a meaningful valuation re-rating, which could deliver more than 50% upside to shareholders,' the firm wrote.... PepsiCo, the owner of the Gatorade and Dorito’s brands, has grappled with macroeconomic uncertainty and stiff competition.... Elliott noted that the margin erosion and market share loss in PepsiCo’s North American beverage business, coupled with decelerating growth in its food segment, have driven recent underperformance 'despite strong execution internally.' In a statement to Barron’s, PepsiCo said it maintains 'an active and productive dialogue' with shareholders. The company said it plans to review Elliott’s perspectives within the context of its own growth strategy.” BARRON'S
Comerica Faces Activist Pressure to Sell Amid M&A Stalemate
Frustrated by slow M&A activity, HoldCo Asset Management signals a boardroom battle to unlock value
“An activist investor plans to launch a board fight at Comerica, intensifying pressure on the Texas-based regional bank to sell itself. The campaign signals the growing impatience among investors for a long-awaited wave of consolidation among regional lenders, which are under pressure to merge in order to better compete with behemoths like JPMorgan Chase and Bank of America. Hedge fund HoldCo Asset Management has argued that Comerica should explore a sale after years of underperformance. If Comerica doesn’t pursue a sale, HoldCo expects to nominate around five directors to the company’s 11-person board when the window opens, likely in December…. Shareholder activists typically shy away from highly regulated industries like banks, but the push by HoldCo could pave the way for more campaigns at lenders. A flurry of regulatory changes under the Trump administration has many dealmakers and bank executives optimistic that mergers might finally pick up. So far, activity has been somewhat muted, partially due to turbulent markets and uncertainty from Trump’s tariff policies.” WALL STREET JOURNAL
Resilient Boards Share One Key Trait: Strategic Risk Alignment
Strong alignment between directors and management on risks and risk appetite is a crucial part of strategic resilience and effective response to change
“In uncertain times, executive teams are often focused on managing near-term challenges, centering their attention on what may change in the operating environment in the days, weeks or months ahead. Corporate boards bring a longer-term governance perspective and are uniquely positioned to help management think further into the future and prepare for risks and strategic opportunities beyond the immediate horizon…. Many boards recognize that strategies that have made their company successful in the past are unlikely to lead to the same results in the future. The world is moving quickly, and many anticipate that boards will face a significant transformation of their business. More than a third of the directors report that external factors beyond their control influence their organization’s decision-making more significantly than internal factors do. Perhaps not surprisingly, nearly three-fourths (73%) say that because of the constant state of unpredictable change, their strategy is constantly evolving—and six in 10 tell us that their strategy will need to change within 12 to 18 months.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Director Confidence Slips Amid Policy Uncertainty
Despite new tax cuts, boards brace for flat growth, while eyeing AI and M&A as strategic bright spots
“After months of tariff-fueled ups and downs, America’s public company board members appear to have found some emotional equilibrium about the state of the economy—but it’s hardly optimistic. The latest reading from our Director Confidence Index, a quarterly poll of public company board members in the U.S. conducted by Corporate Board Member and Diligent Institute, finds directors’ perception of the current business environment unchanged since Q2, with little expectation for improvement in the year to come. Directors rate current conditions at 4.9 out of 10, a modest improvement from last quarter’s 4.4 but still well below the 6.7 optimism they expressed at the end of last year. Meanwhile, their 12-month forecast holds steady q/q at 4.8 out of 10, suggesting a potential plateau for business, amid the competing Washington forces of tariffs, potential Fed cuts and the OBBB…. Against this backdrop, directors say the biggest opportunities for their company can be found in AI adoption (64 percent), with several also finding opportunities in M&A and strategic partnerships (58 percent).” CORPORATE BOARD MEMBER
Succession Planning: The Board’s Unfinished Business
It’s the board’s core duty, yet leadership transitions often remain unspoken. A proactive plan, regardless of CEO tenure or performance, is essential for organizational resilience
“In a recent survey of more than 200 directors of public companies in the U.S., 34 percent described succession planning for the CEO and other C-suite executives as a ‘top priority for 2025’—ahead of AI strategies (25 percent) and geopolitical risks (10 percent). Yet, despite the importance of this issue, boards can sometimes sidestep discussions or provide only cursory oversight of the CEO succession process. One possible reason succession planning does not get the board’s full attention is that sitting CEOs are often reluctant to discuss it. As a result, succession planning can easily be deferred to another time.” KELLOGG INSIGHT
Overlapping Directors Pose Rising Antitrust Risk
More than 13% of companies share directors with rivals, raising alarms about overlooked antitrust exposure
“Antitrust law prohibits competing corporations from sharing board members—called ‘interlocking directorates’—and has for more than a century. Violating it is one of the few things antitrust declares illegal per se, with no opportunity to explain or justify the interlock. Yet our new empirical evidence suggests that the rule is routinely broken. Using proprietary data, we contribute a comprehensive assessment of interlocks in both public and private firms, finding over two thousand instances of individuals sitting on the boards of two companies that are direct competitors. Among companies where we know at least five directors, 8.1 percent (2,309) had an individual interlock. But the same individual sitting on two competing boards, despite being the focus of the interlock literature and most of the case law, isn’t the only problem.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
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