8/3/23 – Issue 8.28 – Your weekly news on all things board. 

School is still out for summer, but the hard work is ongoing this year for university boards of trustees across the country. This week, the University of North Carolina, named in the race-conscious admissions case recently decided by the Supreme Court, moved swiftly to comply with the court’s ruling–some say too swiftly. Northwestern University hires big guns to review athletic programs and culture as the result of an ongoing hazing scandal and the University of Colorado is the latest school to switch athletic conferences in search of stability and greater financial gain. In other schools, boards will be debating similar issues and making tough decisions this year.

In other news, Tiger Woods joins the PGA Tour board; Disney District in Florida ends DEI programs; Larry Fink’s ESG conundrum; and 13 reasons why your board needs an HR expert.

In the Spotlight

University of North Carolina Bans Consideration of Race from Hiring and Admissions
One trustee votes no, saying that the resolution goes beyond the Supreme Court ruling 

“The resolution, passed Thursday, follows last month’s Supreme Court ruling that found race-conscious admissions unconstitutional in cases that named UNC and Harvard College. Board chair David Boliek Jr. said the changes take effect immediately…Boliek said the university still would consider essays which discuss a student’s race, but the board expects admissions officers to evaluate students’ essays in a colorblind fashion…Trustee Ralph Meekins Sr. voted against the resolution…'Even if you’re one that feels like the Supreme Court got it right, it doesn’t mean we have to come forth with a resolution within 30 days of a Supreme Court decision like this,’ Meekins said. ‘It was the wrong time.’...At the time of the Supreme Court ruling, UNC Chancellor Kevin M. Guskiewicz said his university remained committed to having ‘talented students with different perspectives and life experiences,’ and would ‘take any steps necessary to comply with the law.’” WALL STREET JOURNAL

Northwestern Hires Former AG Loretta Lynch to Review Athletic Program Hazing 

The scandal prompted the firing of head football coach Pat "Fitz" Fitzgerald

“Northwestern has engaged former U.S. Attorney General Loretta Lynch to lead a review of its athletic department processes and culture, with the results of the investigation to be made public, the school announced Tuesday. It’s the latest and arguably most transparent step Northwestern has taken to address the hazing scandal that has engulfed the university in the last month. Seven former football players and one former volleyball player have filed lawsuits against Northwestern to date, while attorneys representing former Northwestern athletes have implicated the baseball and softball programs as well…(Lynch) will provide updates on the review to Northwestern president Michael Schill and the Northwestern Board of Trustees’ Audit and Risk Committee and then make her findings public at the conclusion of her review…Northwestern hired an outside firm to investigate reports of hazing and released its initial report on July 7, in which it announced corrective steps such as establishing a locker room monitor for football, in-person hazing training from outside experts and a two-week suspension for football coach Pat Fitzgerald.” THE ATHLETIC (THE NEW YORK TIMES)

University of Colorado Board of Regents Votes to Move From the Pac-12 to the Big 12

Colorado joins USC and UCLA in leaving the Pac-12 for better long-term stability

“Colorado’s board of regents voted 9-0 in a special remote meeting Thursday to approve the conference switch in 2024…'After careful thought and consideration, it was determined that a switch in conference would give CU Boulder the stability, resources, and exposure necessary for long-term future success in a college athletics environment that is constantly evolving,' CU Chancellor Philip DiStefano said in a joint statement with Athletic Director Rick George…While some of the regents expressed disappointment about leaving the Pac-12, they said the shifting sports landscape left CU no option but to rejoin the conference where they were a founding member in 1996…Colorado is expected to take in $31.7 million in annual television revenue over the course of the Big 12’s new deal…” THE ASSOCIATED PRESS

From Boardspan this Week:

Meeting the Information Needs of Independent Directors

The right information at the right time helps boards elevate performance

"If a board is to bring a critical and constructive eye to its tasks, its members must be provided with suitable materials in a timely manner. This begins with an annual corporate agenda that cascades down to board meetings, committee meetings, informal discussions and, ultimately, a timetable for the delivery of information required to enable directors to function effectively at each of these events. Underlying the very concept of an independent board of directors is the recognition that the board has a different agenda than management. While management’s job is to operate the business, the directors focus on stewardship and oversight (including not only the control elements of oversight but also the positive contributions of constructive advice).” BENNETT JONES via BOARDSPAN

Across the Board

Tiger Woods Joins PGA Tour Board
Woods’ board spot ensures that players have a voice in PGA Tour/LIV Golf dealings

“Tiger Woods joined the PGA Tour board as the organization agreed to transparency and new governance measures, the tour announced Tuesday. The new agreement is billed as an assurance that the PGA Tour remains ‘for the players, by the players, and gives the players an upper hand when it comes to partnering with LIV Golf.’ The new board will be comprised of six player directors, five Independent directors, and the PGA of America Director. The other player directors are Patrick Cantlay, Charley Hoffman, Peter Malnati, Rory McIlroy, and Webb Simpson. On Monday, more than three dozen players sent a letter to PGA Tour Commissioner Jay Monahan demanding a bigger voice in the future of the sport…The move all but gives more power to the players and continues to squash any remaining issues with LIV Golf, which the PGA Tour entered into an agreement with in June.” USA TODAY

Under DeSantis, Disney District Ends DEI Programs

Move aligns with anti-DEI legislation in Florida and other conservative states

"The board of the Central Florida Tourism Oversight District, which was appointed by Mr. DeSantis after a bitter dispute with Disney, said in a statement that the district’s diversity, equity and inclusion committee would be dissolved; any jobs associated with it would be eliminated; and considerations of gender or racial parity would no longer factor into the awarding of contracts…The announcement comes as Republicans across the country are targeting diversity, equity and inclusion programs, and it follows Mr. DeSantis’s signing of a bill in May that largely banned public universities and colleges from spending money on such initiatives.” THE NEW YORK TIMES

Everyone is Mad at Larry Fink

With seemingly conflicting actions around ESG, Fink faces criticism from the right and left

“For years, Larry Fink, the chief executive of the giant asset manager BlackRock, has been broadcasting a message to corporate America: Environmental, social and governance goals should be core to how companies do business. So when BlackRock announced in July that it would appoint Amin Nasser, the head of the world’s largest oil company, Aramco, to its board, investors and politicians immediately called out Mr. Fink on what they said was his hypocrisy…It’s the latest example of the increasingly difficult situation Mr. Fink finds himself in: His championing of E.S.G. has drawn accusations of “woke” capitalism from the right while his embrace of energy companies has upset those on the left. The political blowback has made it more challenging for Mr. Fink to do his day job of finding new sources of money that BlackRock — which oversees $9 trillion in assets — needs to drive growth and keep shareholders happy.” THE NEW YORK TIMES

Yellow Corp. Shuts Down Operations, Declares Bankruptcy

Yellow was the nation’s third largest trucking company for less-than-truckload shipments

“Cash-strapped U.S. trucking company Yellow Corp (YELL.O) has ceased operations and is filing for bankruptcy after failing to reorganize and refinance over a billion dollars in debt, the Teamsters Union said on Sunday…Its customers included large retailers like Walmart (WMT.N) and Home Depot (HD.N), manufacturers and Uber Freight, some of which paused cargo shipments to the company for fear those goods could be lost or stranded if the carrier went bankrupt. The company said in June that the Teamsters Union was blocking restructuring and modernization efforts, collectively known as "One Yellow", which it said were critical for Yellow's survival and ability to refinance about $1.3 billion of debt due to be repaid by 2024.” REUTERS

Steve Wynn Pays a Hefty Price in Sexual Misconduct Settlement

Wynn owes Nevada $10 million and must step back from gaming industry

“Steve Wynn, the longtime Las Vegas casino magnate and major Republican donor, has agreed to pay Nevada a $10 million fine and to step back from its gambling industry in a settlement related to employee allegations of sexual misconduct, closing his yearslong battle with the state’s gambling regulators…The agreement appears to end regulators’ investigations into Mr. Wynn’s conduct, though he could face additional fines if he violates its terms…In 2019, an investigation overseen by the Nevada Gaming Commission found ‘a pattern of Mr. Wynn recklessly engaging in sexual conduct with subordinate employees, which, even if it was consensual as maintained by Mr. Wynn, is oblivious to the significant power imbalance between the C.E.O. of a major gaming company and subordinate employees.’ The commission fined Wynn Resorts, which Mr. Wynn founded in 2002, roughly $20 million for ignoring complaints about his behavior.” THE NEW YORK TIMES

13 Reasons Why Your Board Of Directors Should Include An HR Expert

Many of the challenges boards navigate involve ethics, culture, and workforces

“In today's rapidly changing corporate landscape, boards of directors face increasingly complex challenges in navigating issues related to workforce management, talent acquisition, and employee well-being. The need for human resources (HR) expertise at the board level has never been more critical. Having an HR expert on the board of directors brings a unique and indispensable perspective that goes beyond traditional financial and strategic considerations. From fostering a strong organizational culture to mitigating legal and ethical risks, the presence of an HR expert can significantly contribute to the overall success and sustainability of a company in today's competitive landscape.” FORBES

How Should Boards Handle Stakeholder Capitalism Today?

From the 1930s until deep into the 1970s, stakeholder capitalism was the dominant model in the U.S.

“Whatever you call it, taking into account employees, customers, regulators, environmental groups, and other stakeholders who aren’t shareholders has assumed greater urgency. For companies and directors, there’s a strategic and financial imperative to do so as they grapple with environmental, social, and governance (ESG) risks. Many investors support this emphasis on stakeholders, which should become part of the business, experts say. How much has changed, and where does it leave boards?” FORTUNE

Corporate Governance Zeros in on AI 

Technological advancements in AI are leading to an increased focus on governance implications

“In-house legal and governance teams are among the many groups taking a hard look at artificial intelligence (AI) and figuring out how to make the most of the opportunities it offers while mitigating the risks it presents…there has not been much change over recent years in the tools available to meet the changing demands governance teams face. Boards have been meeting more frequently, particularly since the onset of the Covid-19 pandemic, and they are dealing with new issues such as cyber-security and climate change, all of which means they need more information and guidance.” CORPORATE SECRETARY

Seat at the Table

• IBM elects to its board Michael Miebach, CEO of Mastercard Incorporated

• Best Buy appoints to its board David Kimbell, CEO of beauty retailer Ulta Beauty

• Payments and financial services provider Fiserv adds to its board Charlotte Yarkoni, President of Commerce, Ecosystems, Cloud & AI at Microsoft Corporation

• Home servicer Frontdoor welcomes to its board Dr. Balakrishnan Ganesh, Partner at tech consulting firm AKF Partners

• Real estate portfolio Gyrodyne elects to its board Jan Loeb, Managing Member of Leap Tide Capital

• Axalta Coating Systems added to its board Dr. Kevin Stein, President and CEO of aerospace and defense company TransDigm Group

• Online real estate marketplace CoStar Group appoints to its board Angelique Brunner, CEO and Founder of EB5 Capital

• Fiber laser company IPG Photonics welcomes to its board Kolleen Kennedy, former Chief Growth Officer and President of Proton Solutions at Varian Medical Systems

• Manufacturing firm Deere & Company elects to its board Neil Hunn, CEO of Roper Technologies

About Boardspan
Boardspan is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, benchmarking analytics and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.