Across the Board
Stanford President Resigning After Questions About Research
Inquiry finds no evidence of fraud, but cites “serious flaws” in paper he co-authored
"Stanford University President Marc Tessier-Lavigne announced Wednesday he will resign after an investigative report found he had failed to correct mistakes in years-old scientific papers and overseen labs that had an “unusual frequency” of manipulations of data…the review provides a portrait of a scientist who co-authored papers with “serious flaws” and failed on multiple occasions to “decisively and forthrightly correct mistakes” when concerns were raised. Tessier-Lavigne said Wednesday that he would ask for three papers to be retracted and two corrected. A panel of prominent scientists, engaged by a special committee of the private university’s board of trustees, examined a dozen of the more than 200 papers published during his career…’Stanford is greater than any one of us,’ Tessier-Lavigne wrote of his decision to step down. ‘It needs a president whose leadership is not hampered by such discussions.’” THE WASHINGTON POST
The FTC and DOJ Lay Out New Rules for Evaluating Mergers
Proposed rules are designed to keep pace with the digital economy
“The Federal Trade Commission and Department of Justice issued new guidelines for approving mergers on Wednesday, and said that their new focus when evaluating mergers will include the impact a deal will have on competition for workers, along with how a series of acquisitions, rather than one-offs, could result in harmful effects on the market…The proposed rules apply to both vertical and horizontal mergers. Almost two years ago, the FTC voted to withdraw the previous version of the vertical merger guidelines released in 2020, citing flaws.” CNBC
Tesla’s Board Settles Overpayment Lawsuit for $735 million
Investors alleged that board members used stock options to overpay themselves
“Tesla’s Board of Directors have reached a $735 million settlement with investors following a lawsuit claiming they had drastically overpaid themselves. The money will be returned to Tesla, ending the legal claim filed in 2020 that accused the directors, including co-founder Elon Musk, of inappropriately siphoning off millions of dollars from the company…The claims were brought before a Delaware court earlier this year, and a court filing claims that between 2017 and 2020, ‘members of Tesla, Inc’s Board of Directors breached their fiduciary duties by awarding themselves excessive and unfair compensation.’” YAHOO
AMC Shareholder Sues, Claiming the Company is Lax in Holding Annual Meetings
Suit alleges that two board members were appointed without a shareholder election
“An AMC Entertainment Holdings Inc. shareholder sued the theater chain in Delaware court on Monday, saying AMC is late in holding its annual meeting where shareholders elect members of the company's board. Individual shareholder Kevin Barnes said in the lawsuit that AMC is required by its corporate bylaws to hold a meeting each year, and that its last annual meeting was on June 16, 2022…He accused AMC of ‘suboptimal governance,’ that has led to ‘frequent litigation’ by AMC shareholders, including a lawsuit where holders of AMC common stock sued to block a stock conversion plan.” REUTERS
Microsoft Security Breach: A Wake-Up Call For Board Directors?
Now is the time to solidify plans for cybersecurity oversight
“Microsoft disclosed that a group of Chinese hackers had broken into some of its customers' email systems to gather intelligence. The hackers, who Microsoft identified as Storm-0558, were able to gain access to the accounts of government agencies and individuals in the United States and Europe…This breach has set off warning alarms for many boards of directors. Public company directors know their role is to perform oversight of the corporation. This includes reviewing the operating plans, going over financials, and the foundational responsibility of mitigating risk.” FORBES
Disney Did Not Breach Fiduciary Duties Regarding “Don’t Say Gay” Bill
The company was first silent on the Florida bill, then decided to speak out against it
“Boards and their advisors seeking to navigate the culture wars and their often conflicting pressures from a variety of stakeholders and outside groups may find some comfort and guidance in this recent decision from the Delaware Chancery Court in Simeone v. The Walt Disney Company. The case involved a books-and-records demand from a stockholder asserting a potential breach of fiduciary duty by Disney’s directors and officers in their determination to publicly oppose Florida’s so-called ‘Don’t Say Gay’ bill. Originally, Disney was silent on the bill. However, following reproaches from employees and other creative partners, Disney’s board deliberated at a special meeting, and the company changed course and publicly criticized the bill…Under Delaware’s business judgment rule, directors have “significant discretion to guide corporate strategy—including on social and political issues.” Importantly, the Court confirmed that, in exercising its business judgment, a board may take into account the interests of non-stockholder corporate stakeholders where those interests are “rationally related” to building long-term value.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Equipping the Board for a Tough Environment
Bank Director’s 2023 Governance Survey looks at risks, opportunities in the boardroom
“The vast majority of bank board members and CEOs believe their board proactively addresses the risks and opportunities facing their institutions, and that issues and challenges are adequately reflected in the board’s agenda. But a lack of various skill sets and knowledge could mean the board is ill-equipped to ask questions about key risks or business opportunities at a time when the operating environment looks increasingly tough. Many boards, particularly at smaller banks, could be lacking expertise in critical areas that may be needed to address today’s challenges.” BANK DIRECTOR (read the full survey here)
More Insights from Boardspan
Boardspan’s Backchannel features conversations with some of the country’s most successful board members and business leaders, who share their boardroom wisdom and lessons learned.
George Roberts: The Evolving Role of the Board
Maggie Wilderotter: How the Best Boards are Built
Ken Bacon: What Has and Hasn’t Changed in Risk Oversight
