Across the Board
Boeing CEO Vows Transparency After Panel Malfunction
“This stuff matters. Every detail matters,” Dave Calhoun says in all-hands meeting
“Boeing Co. Chief Executive Officer Dave Calhoun fought back tears as he said the planemaker must own up to its shortcomings, underscoring the stakes of a safety incident that’s renewing questions over the quality of its manufacturing. ‘We’re going to approach this — No. 1 — acknowledging our mistake,’ Calhoun told Boeing employees Tuesday during a companywide meeting at its 737 aircraft factory near Seattle. ‘We’re going to approach it with 100% and complete transparency every step of the way.’” BLOOMBERG
JetBlue CEO to Step Down
Robin Hayes’ departure announcement comes in midst of Spirit merger
“In a lengthy statement, Mr. Hayes described the decision to retire as “bittersweet” and suggested that unspecified health concerns had driven it. ‘The extraordinary challenges and pressure of this job have taken their toll, and on the advice of my doctor and after talking to my wife, it’s time I put more focus on my health and well-being,’ he said. “I am deeply grateful for these many exciting years, and I feel very lucky to have worked at an airline with a brand, culture and team that are simply unlike any other in the world.’...Mr. Hayes will be replaced by Joanna Geraghty, the company’s president and chief operating officer, on Feb. 12, which would make her the only woman to lead a major U.S. airline.” THE NEW YORK TIMES
Microsoft Picks Dee Templeton as Non-Voting Observer at OpenAI
Templeton is VP of Technology and Research at Microsoft
“Microsoft Corp. executive Dee Templeton has joined OpenAI’s board as a nonvoting observer, according to a person familiar with the matter, as part of a broader boardroom overhaul following the brief ouster of the startup’s chief executive officer…Templeton joined Microsoft in 1998 as its first female technical employee at the company’s New Zealand office, according to her LinkedIn profile. In her current role, she reports to Microsoft’s chief technology officer and leads a team managing some of the company’s technical partnerships, including its work with OpenAI. The Information previously reported Templeton was one of the people in consideration for the board role.” BLOOMBERG
How Harvard’s Board Broke up with Claudine Gay
Intense pressure eroded the board’s initial vote of confidence
“For weeks the board had stood by its embattled president as she dealt with withering criticism of her tepid response to antisemitism on campus, her disastrous testimony before a House panel and mounting allegations of plagiarism in her academic work. Ms. Pritzker, who had led the selection of Dr. Gay as the school’s first Black president, was an especially ardent backer…On Dec. 12, the corporation put out a statement in support of Dr. Gay, citing “our confidence that President Gay is the right leader to help our community heal and to address the very serious societal issues we are facing…But within two weeks, the once strong support had begun to dissolve, according to interviews with a dozen people with knowledge of the discussions, including those who had spoken directly with Dr. Gay, Ms. Pritzker and other board members or were briefed on their thinking and actions. They requested anonymity because they weren’t authorized to speak about the deliberations publicly. As the board members flew to ski towns and beaches for the holidays, they had a dramatic change of heart about their president.” THE NEW YORK TIMES
Startup Founders Fear Getting Fired Like Sam Altman
Many build up protections and share classes since OpenAI drama
“There’s a new task on the 2024 to-do list for founders: Make sure you can’t get Altmaned. While startups have ousted leaders before, the entrepreneur world was stunned to see the board of hot artificial-intelligence company OpenAI fire Sam Altman just before Thanksgiving. He had been the face of one of the biggest successes of the year and suddenly he was out. In startup land, founders and advisers say they started discussing new ways to protect themselves. Altman eventually made it back to OpenAI in a countercoup. But the tension at one of the country’s biggest startups is playing out in a longstanding debate about who should control a burgeoning company.” THE WALL STREET JOURNAL
Disney’s Activist Drama Holds 4 Lessons for Corporate Boards
Academic experts in governance discuss the takeaways for boards
“More drama may unfold before Disney’s general meeting, for which the company has not announced a date. In the meantime, governance experts share these takeaways from the action-packed situation...Remember that Iger returned to Disney after his chosen successor, Bob Chapek, failed, kicking off this latest round of governance battles, says Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. Outgoing CEOs often pick successors for the wrong reasons, he adds, and Iger’s return and strong influence over the board underscore why an incumbent chief executive’s opinions during the CEO search should be viewed as ‘interesting [and] informative, but not dispositive.’” FORTUNE
Goldman Sachs Plays Matchmaker for Corporate Diversity
How Goldman Sachs helps companies find diverse board members
“Goldman Sachs, since launching an initiative more than three years ago to improve the diversity of corporate boards, has helped place over 100 such executives at companies—while another 300 businesses that adhere to the bank’s standards have gone public. But the road wasn’t without some speed bumps…In July 2020, Goldman, a leading underwriter of IPOs, began telling businesses that it wouldn’t take them public in the U.S. or Europe if they didn’t have at least one diverse board member. In 2021, Goldman boosted the requirement to two members, including at least one woman. The investment bank considers gender and race, as well as sexual orientation, in its DEI metrics for board placements. It often found companies needed help with these mandates…Goldman’s solution was to establish a board diversity and engagement team, led by Wolfe, to help businesses by leveraging its numerous relationships with companies. Doing so helps find candidates that board placement firms may not consider, Wolfe explained, because some placement firms often rotate through the same list of names—plus they don’t have the networking reach of Goldman.” FORTUNE
Browning West Escalates Push to Control Gildan Board
The activist fund expands its list of board candidates from five to eight
“ U.S.-based activist fund Browning West on Tuesday escalated its fight with Gildan Activewear by seeking to replace a majority of its board members after the Canadian apparel maker fired the co-founder and Chief Executive Officer Glenn Chamandy. The Los Angeles-based investment firm in a letter to Gildan's shareholders expanded its list of board candidates to eight from five and requested a special meeting to be ‘held without delay’ to reconstitute the company's board…Browning West, which owns 5% of Gildan's outstanding shares, said on Tuesday it had learned that the board ‘intends to employ extreme delay tactics’ by pushing its annual meeting of shareholders or any other special meeting to late 2024. The activist investor, along with other big shareholders, has called to reinstate Chamandy as the CEO and terminate the appointment of new CEO Vince Tyra.” REUTERS
Companies are Changing Language in Diversity Policies: Should You?
When the board takes a position, make it clear
“Companies’ need to address environmental, social & governance (ESG) risks and obligations has become even more essential for business sustainability in a year in which there has been a profound shift towards a new reality marked by increased unpredictability…Yet, opponents of ESG initiatives remain vocal. In many instances, this puts companies in a difficult spot because they are caught between the political forces leading the ESG opposition and what many stakeholders — including employees, investors, consumers, customers, among others — want. Indeed, we’ve highlighted potential solutions on how to approach those with pro- and anti-ESG viewpoints from using stakeholder mapping on divisive issues, to focusing on individual issues that fall underneath the ESG umbrella because they are less polarizing than the term ESG.” CORPORATE BOARD MEMBER
US Fed Bank Boards Get Less Diverse in 2024, Reversing Trend
Majority women and majority minority composition changes in the last year
“The boards of directors of the Federal Reserve's 12 regional banks, including their leadership ranks, got less diverse by gender and race in 2024, going against a years-long trend, data released by the U.S. central bank on Friday showed. Women now hold 10 of the 24 leadership positions at the bank boards, a Reuters review of the new appointments shows, down from 13 female chairs and vice chairs on last year's boards. Fourteen of the chairs and vice chairs appointed this year identify as Black, Hispanic, or otherwise non-white, the Fed said.” REUTERS
A Governance Lesson from Academia, Part II
What can corporate boards learn from the mistakes of Penn and Harvard?
“Though the world of academia has rarely proven fertile ground for governance lessons for corporate boards, the recent controversies at Harvard and the University of Pennsylvania have proven otherwise. There are a number of important takeaways for corporate directors evolving out of the handling of management-oversight issues by the boards of both these prominent institutions…Imagine if your primary lenders and investors straight-out told you that they were cutting your financing due to their poor view of your leadership and similar views were expressed by many of your employees. How would you react?” DIRECTORS & BOARDS
