Director's Domain: Corporate Governance News & Board Insights

September 05, 2024 -

The role of leadership in steering companies toward stability and growth is difficult, especially in today’s dynamic environment, and boards have a critical job to do in ensuring the right leaders and plans are in place. In this week’s news: the Intel board prepares to review a strategic plan that includes shedding assets and cutting costs to revive the struggling chipmaker, boards like that of Southwest Airlines face investor pressure to ensure they have the right strategy, and pundits raise questions about the qualities boards seek in hiring CEOs capable of orchestrating effective turnarounds. In all three scenarios, boards are focused on the intersection of strategy, leadership, and accountability as they help companies navigate the complexities of a fast-paced economy.

August 29, 2024 -

As government authorities around the world ramp up their oversight of digital platforms, the concept of business accountability is taking on new, complex dimensions, especially for tech companies and their leaders. A striking example emerged this week when the Justice Department accused RealPage, a real estate software company, of enabling landlords to collude through its algorithms, allegedly driving up rental prices for consumers. The recent arrest of Telegram founder Pavel Durov by French authorities also marks a significant turning point in how tech executives may be held responsible for the information posted and exchanges that take place on their platforms. And California lawmakers this week pushed forward legislation that would put limits on artificial intelligence. As each of these scenarios unfold and authorities scrutinize new technologies for issues of safety, security, competitiveness and more, boards will want to keep their own focus on the intersection of innovation, ethics, and leadership accountability.

August 22, 2024 -

In a move likely to raise more eyebrows across the corporate landscape, Tesla CEO Elon Musk is urging shareholders to pressure the carmaker’s board to invest $5 billion in a separate Musk enterprise, his AI startup xAI. Musk is, of course, no stranger to pushing the governance envelope, though pundits wonder if this maneuver could inspire other executives to push for their companies to invest in their side projects. Meanwhile, activist investors are keeping boards on their toes and this week Southwest Airlines, Harley-Davidson, and Portillo’s are responding to investor demands as diverse as a strategic overhaul to a gutting of DEI initiatives. And CEO transitions are picking up steam, with Challenger, Gray & Christmas noting a 50 percent increase in CEO turnover between Q1 2023 and Q1 2024. Transitions at Estee Lauder, Chipotle, Disney, and Starbucks highlight the importance of effective succession planning and board oversight.

August 15 2024 -

For anyone interested in succession planning, the story behind the CEO change at Starbucks this week makes for fascinating reading. Starbucks Chair Mellody Hobson recounts to the Wall Street Journal how the board identified and stealthily recruited former Chipotle CEO Brian Niccol without so much as a recruiter involved, and only let founder Howard Schultz in on the plan after it had started to gel. It’s a tale of conviction and willingness to Go For It. And speaks, of course, to a need to move speedily to effect change before activist investors did.

In other news: Activist investor Elliot Management seeks to replace two-thirds of the Southwest Airlines board, 40% of millennials say a CEO’s political opinion could drive them from their jobs, why AI risks are keeping boards up at night, Delta accuses CrowdStrike of trying to blame the victim, and legal minds suggest new risks for boards require rethinking some standard board practices.

August 08, 2024 -

Battle royale from the corner offices of CrowdStrike, Microsoft, and Delta Air Lines is unfolding, leaving many to wonder whether their respective boards will weigh-in as corporate jousting escalates. No doubt, intricate dynamics are at play. Last week, Delta directed blame for its operational nightmare at CrowdStrike and Microsoft, and this week, the tech giants have returned fire, asserting that the responsibility rests with Delta's outdated systems. Fueling the fire, Delta has engaged the famed attorney David Boies and his firm as it seeks to defend itself against an estimated $500 million in costs stemming from a significant software glitch attributed to the tech behemoths. What is transpiring serves as a real-time case study, drawing the keen interest of boards as they closely monitor the developments.

In other news: often outspoken Elon Musk revives a lawsuit against OpenAI while a Delaware Judge questions why Tesla shareholders were asked to vote a second time on his pay package, Chevron packs up in California and heads to Texas, the growing challenge and unlikely success of keeping the workplace politics free, the board governance of transformation during uncertain times, Starbuck’s Board Chair (emeritus) for life, and much more!