Across the Board
Shareholders To Tesla: Time For a Governance Overhaul
With Musk’s attention divided and Tesla’s stock declining, investors demand structural reforms that could shape corporate governance debates across industries
“The Tesla board recently received a letter from a group of its shareholders that asks for several corporate governance changes that may spark new conversations about the relationship between the board and its shareholders and whether there should be new standards of fiduciary duty set for corporate directors and the CEO. The shareholders, which are represented by institutional investors that hold 7.9 million shares, contend that actions by CEO Elon Musk and Tesla’s board have caused the company’s stock price to fall by more than 24 percent since December 2024, a sales decline of 13 percent in the first quarter this year, calls for divestment in Europe and in the US, and long-term damage to the Tesla brand. In their letter, the investors have challenged the Tesla board to rein in CEO Elon Musk, whose appointment as head of the U.S. Department of Government Efficiency and CEO of multiple private companies has taken his attention away from Tesla, leading to significant problems for the company." CORPORATE BOARD MEMBER
Cracks in the Boardroom: What Harley-Davidson’s Director Exit Reveals
Director resignations are usually quiet affairs, but a recent, very public departure at Harley-Davidson exposed internal tensions and offers a cautionary tale in board governance
“Director resignations are generally routine affairs. They don’t typically send shockwaves through media outlets, create stock volatility, or draw scrutiny from plaintiffs’ firms. That’s by design. However, recent, high-profile director resignations, including one at Harley-Davidson, underscore how perceived governance lapses, weak communication, and internal boardroom fractures can quickly become public and consequential. This departure, documented in US Securities and Exchange Commission (SEC) filings, offers a compelling look at what can happen when best practices in board governance are underutilized or ignored.” JD SUPRA
Fulbright Board Resigns After Accusing Trump Aides of Political Interference
The board of the prestigious program told the State Department it had no right to cancel scholarships for nearly 200 American professors and researchers
“The dozen board members of the prestigious Fulbright program that promotes international educational exchanges resigned on Wednesday because of what they said was political interference by the Trump administration in their operations…. The members are concerned that political appointees at the State Department, which manages the program, are acting illegally by canceling the awarding of Fulbright scholarships to almost 200 American professors and researchers who are prepared to go to universities and other research institutions overseas starting this summer… The board approved those scholars over the winter after a yearlong selection process, and the State Department was supposed to send acceptance letters by April.” NEW YORK TIMES
Texas Enacts Sweeping Corporate Governance Reforms
As major companies flock to Texas for its business-friendly climate, the state’s aggressive stance against ESG and DEI is reshaping what corporate governance looks like—and raising questions about how far light-touch oversight can stretch
“When Texas placed BlackRock on an investment blacklist in August 2022, accusing the firm of boycotting the oil industry, critics called it an act of self-harm by a state that put a performative stunt ahead of its fiduciary duties…. This week Texas claimed vindication. The state announced it would allow the world’s biggest asset manager to regain access to its $300bn state-run pension and investment funds, saying its stand had caused BlackRock to rethink its investment approach and pull back from green initiatives…. Texas has long pitched itself as a pro-business mecca, defined by its light-touch, low-tax approach. Now, emboldened by a sympathetic administration in Washington, it is doubling down on its drive to lure companies south — while making clear they need to play by its rules…. On top of its vocal pushback against ‘woke’ environmental, social and governance (ESG) policies and diversity, equity and inclusion (DEI) programs, the state is also establishing a new corporate governance model that shifts the balance of power towards executives and away from shareholders." FINANCIAL TIMES
When Women Lead, Workplaces Are Safer
Research from the University of Notre Dame analyzed a unique dataset covering 266 firms from 2002 to 2011
“The most coveted position in corporate America — the board of directors — historically has been criticized for excluding women and other underrepresented groups. Over the past several decades, however, state legislation and pressure from investors have motivated firms to increasingly recruit female directors…. The research found that 'boards with a higher representation of female directors prioritize and thus enhance workplace safety due to women’s distinct social-cognitive perspectives on stakeholders, risk avoidance, and regulatory compliance.' In addition to that, the study said women on the boards of companies with better employee protection records also brought 'more experience in community outreach and philanthropy' to the job than male peers, 'making them more likely to advocate for prosocial issues.”" INC
The Rich Compensation for Being the C.E.O.
The chief executives at Palantir, which scoops up data for the government, and Veeva Systems, a cloud-computing company, topped two lists of the highest-paid C.E.O.s.
“Being C.E.O. is a tough gig, no question. But the pay? It’s fabulous…. These days, it’s particularly lucrative to be the C.E.O. of a company with government security ties, corporate executive compensation filings show. Take Alex Karp. He’s the chief executive of Palantir Technologies, a data analysis and technology firm that has been in the news for helping the Trump administration collect and compile personal information on millions of Americans.… Palantir disclosed that Mr. Karp received $6.8 billion in ‘compensation actually paid’ in 2024, a figure bolstered by Palantir’s soaring share price, which last year swelled the value of the stock and options awarded to him…. The biggest payday in corporate America last year, using this traditional measure of executive compensation, went to Peter Gassner of Veeva Systems, a cloud-computing company focused on the life sciences, with a total compensation of $172.4 million, nearly all from stock options and awards.” NEW YORK TIMES
A New Era of Cyber Resilience for Boards
For directors, this evolving landscape demands a fundamental shift in approach to cybersecurity governance
“Last year, a C-suite member of a major sports franchise received a concerning voicemail from the organization’s board chair. The message requested urgent action to address code vulnerabilities that were ripe for exploitation. This voicemail naturally triggered a sense of panic, ultimately disrupting operations across the organization as engineers put down their daily work to prioritize this emergency. However, there was no true cause for concern after it became clear the voicemail wasn't real. It was a sophisticated, AI-generated deepfake. This incident is just one example of the new frontier of cybersecurity threats facing organizations across corporate America. The cyberattacks orchestrated by faceless hackers with anonymous ransomware demands have evolved into an even more troubling threat.” DIRECTORS & BOARDS
Midyear Observations on the 2025 Board Agenda
Amid growing concern about tariffs and their inflationary effect, a near majority of CEOs anticipate a recession, price hikes, and potential job losses
“Disruption, volatility, and uncertainty aren’t new operating conditions by any means. But the assumptions that have long driven corporate thinking—the role of government, geopolitical norms, and consistency in US policies as administrations change, and the speed of technological advances—are being upended. Few business leaders have experienced the scope, complexity, and combination of issues companies are facing today—and many will earn their stripes in the months ahead…. Approaching midyear, post-election exuberance among business leaders has been overshadowed by a significant decline in confidence about the growth prospects for the US economy and the opportunities ahead for their companies… At the same time, the macro forces of generative artificial intelligence (GenAI), climate, and geopolitics are calling for deeper boardroom conversations about risk, resilience, strategy, and talent, and what the future will look.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Stepping Outside the Echo Chamber
Diversity in the boardroom is not a check-the-box exercise, particularly as DEI programs have come under fire from different directions
“Some of the riskiest decisions in the boardroom aren't made in haste — they're made in harmony. Not the productive kind, but the kind that stems from homogeneous thinking, excessive deference to a powerful CEO and unchallenged assumptions. When everyone around the table sees the world from a similar perspective, asks the same questions and draws from shared experiences, blind spots can remain undetected and strategic judgment narrows. In today's complex business landscape, the most effective boards are those that have assembled a diverse group of directors who approach issues from different perspectives and are willing to challenge management and each other constructively as well as broaden the collective field of vision.” DIRECTORS & BOARDS
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