Director's Domain: Corporate Governance News & Board Insights

February 27, 2025 -

Geopolitical tensions are redefining the role of the board of directors, demanding strategic foresight and political acuity like never before. Nippon Steel’s blocked bid for U.S. Steel—initially stalled by national security concerns and election politics but now resurfacing as an investment opportunity— highlights how shifting national interests shape the opportunities and constraints boards must navigate in their strategic decisions. Meanwhile, labor tensions are escalating, as the Steelworkers' union accuses U.S. Steel of suppressing worker dissent over the proposed sale. Political dynamics are also affecting boardrooms beyond the steel industry—Vanguard faces resistance from state treasurers over ESG considerations, reflecting shifting political priorities and growing scrutiny in investment decisions. In the tech sphere, the SEC's warning against ‘AI washing’, a marketing tactic where companies falsely or exaggeratively claim AI capabilities to appear more innovative, underscores the growing regulatory focus on AI-related disclosures. Together, these stories paint a vivid picture of the balancing act boards are navigating as geopolitical tensions, regulatory pressures, and stakeholder dynamics become more interconnected than ever.

February 20, 2025 -

Expect the unexpected. The external pressures that boards were feeling not so long ago have quickly ceded way in this unpredictable environment. The decision by ISS to remove board diversity from its voting recommendations signals a step back from what many recently considered governance best practices. While some may see this as a policy shift toward a neutral position, it raises challenges for boards that have prioritized diversity based on their organizational values, well-honed culture, and performance-based data. This poses a dilemma on many fronts – or does it?
Further, a new survey shows that US corporate boards are increasingly advising executives to stay silent on social issues, fearing political backlash and consumer alienation. Contrast this with Canada’s latest move, requiring banks to disclose board diversity metrics. Will boards and the organizations they serve be forced to pick sides and if so, where and how do they draw a line that garners respect? What can we expect to see happen next – something else unexpected?

February 13, 2025 -

Unpredictable terrain. The DEI debate continues to evolve, with legal and cultural headwinds reshaping corporate diversity policies. Boards and other executives find themselves navigating shifting expectations as companies face legal challenges, political pressures, and investor scrutiny over their commitments to inclusion. Meanwhile, cybersecurity oversight is becoming a more urgent responsibility for directors, as threats grow more sophisticated and regulatory expectations increase. At the same time, AI governance remains a high-stakes issue, as industry leaders push for regulatory restraint while OpenAI’s internal power struggles highlight the volatility of the sector. As if innovation, oversight and power struggles are not enough to spin one’s head, the recent ESG and regulatory shifts, such as the SEC’s reversal on climate disclosure rules, raises questions about how companies should adjust their reporting strategies. For boards, the potential swings in investor, regulator, employee, and other constituents’ expectations create a sense of shifting sands nearly every step of the way.

February 06, 2025 -

In times of volatility—whether driven by market forces, technological shifts, or civic disruption—the true measure of a board’s effectiveness lies in balancing speed with clarity and composure. Boards play a critical role in guiding organizations to ensure decisions are both timely and grounded in long-term value rather than short-term pressures. By stepping up as strategic thought partners and providing a calm presence, board members can support management in interpreting complex changes, asking critical questions, and navigating uncertainty without overstepping operational boundaries. At the same time, board members must objectively evaluate whether the organization’s leadership is capable of meeting the challenges before it and if so, hold that leadership accountable for navigating a pathway to success. The board has a complex role to play: a confidante and supporter of management on one hand, and a firm enforcer of success on the other. When boards play their part well they contribute in ways that can have lasting impact.

January 30, 2025 -

It’s turbulent at the top. Corporate leaders are navigating a complex mix of governmental, investor, and workforce demands, some of which seem impossible to reconcile. The saga surrounding U.S. Steel is a prime example: its $14 billion merger with Nippon Steel was blocked by the Biden Administration with the support of union leaders; now the company’s bid to revitalize the merger is supported by the union, thanks to new concessions and growing concern that without Nippon’s proposed investment in the company, many jobs will be lost. But activist investment firm Ancora Holdings sees a different path to success and has ramped up pressure on U.S. Steel to let go of the merger, along with its CEO, and seeks to install nine new directors.

Meanwhile, as Silicon Valley giants ally themselves with the Trump Administration and distance themselves from DEI initiatives, discord is growing among employees who have come to expect a more liberal stance from tech companies. Facebook employees have taken it upon themselves to provide amenities once supplied by the company for their transgender coworkers, while a Google employees union appeals to the CEO to rethink its approach to layoffs. Going forward we expect to see more challenging dynamics as government, workforce, and investor expectations continue to shift.