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May 19, 2022
Not by laws alone… California’s board diversity legislation may have been overturned, but it has already changed the landscape and we expect boards to continue their diversification efforts. After all, shareholders, consumers, stock exchanges and legislators in other states continue to demand board diversity. Meanwhile, median CEO pay at large corporations, fueled by equity awards, increased to a record $14.7 million in 2021. Intel joins the ranks of companies whose executive pay proposal earned a “No” vote; shareholder advocacy group As You Sow reports that last year, shareholders rejected 16 compensation proposals. The Moderna board faces scrutiny after several high-profile executives have come and gone in quick succession, including a newly appointed CFO who exited after just one day on the job—observers question whether the board is practicing appropriate diligence and oversight around senior hires.
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Browse Our Most Recent Issues
May 12, 2022 - Reality check. Big Oil is bracing for a slew of climate-related shareholder proposals, as activists seek to challenge organizations not only around climate risk disclosure but also for not incorporating sustainability or adhering to promised objectives. Daniel Loeb continues to press Shell to split up the company, separating its renewables and liquified natural gas from its legacy fuel business. In other governance news, a study on CEO pay shows a 19% increase in 2021; about half of the companies in the study tie progress toward ESG metrics in compensation plans. And while the U.S. job market was on the up in April, the tech industry is undergoing a wave of layoffs and restructuring, as market volatility kicks in and money flows less freely. Read On
May 5, 2022 - Power in numbers. The amount of shareholder proposals concerning ESG issues continues to skyrocket, as investors express a wide range of concerns; companies are increasingly pressed to address key topics such as climate change, racial equity, and employee wellbeing, and are making changes as a result. With the leaked Supreme Court draft opinion signaling a potential overturning of abortion rights, companies can expect more pressure from shareholder activists seeking policy changes to protect women’s rights. Already Walmart, Lowe’s and TJX face shareholder proposals concerning employee access to abortion. In other governance news, a recent report finds that 43% of Fortune 500 board appointments in 2021 were first-time directors, and 45% of them were women. And Hasbro feels the heat as activist investors join forces in an ongoing proxy fight with the toy company. Read On
April 28, 2022 - Beyond the law. Pressure to diversify boards remains strong, even in the absence of laws requiring it. Following the verdict that overturned one of California’s board diversity laws, shareholders are demanding more diversity on the boards of Alphabet and Wells Fargo. In the U.K., a non-governmental financial regulator is requiring boards to disclose diversity metrics and provide explanations for missing the regulator’s targets, which are not legally binding. Shareholder activists, who have successfully moved the dial on climate disclosures with their well-oiled campaigns, have so far been unable to convince Warren Buffett to provide the data they want on Berkshire Hathaway, and are launching another proposal, sure to be defeated, given Buffett’s super-voting rights. Still, new research from BlackRock finds that even a losing resolution, if it receives 30-50% of the vote, can prompt a company to consider and respond to the issues raised. And A.I. oversight is a governance topic of growing importance – is it on your boardroom agenda? Read On
April 21, 2022 - Not quite there yet. While recent regulatory proposals and investor demands emphasize the need for boards to fully embrace ESG, a new survey finds that some 70% of directors don’t believe they are effectively incorporating ESG into strategy. A bright note: Mastercard announces it will now link all employee bonuses to ESG initiatives in a program that was first introduced to compensation plans for senior executives. Meanwhile, researchers studying board diversity find that, largely due to investor interest in ESG, diverse boards attract more capital. In other governance news, CalPERS is set to vote against Warren Buffet as chairman of Berkshire Hathaway, arguing that it's time for an independent chair. Meta shareholders are being asked to vote against the re-election of two board members, and instead vote to nominate two independent directors. After shareholders voiced concerns over high injury rates among workers of color, Amazon will conduct a racial equity audit. And Twitter, in response to Elon Musk’s activity, adopts a poison pill in an effort to keep the Tesla CEO at bay. Read On
April 14, 2022 - Under pressure. While institutional investors continue to push on ESG concerns, many boards are still working toward concrete ESG metrics and disclosure requirements. Observers say now is the time to get on top of investor expectations and ensure your board can withstand potential scrutiny around ESG oversight. In other governance news, Elon Musk, who has decided against joining the board of Twitter and is being sued by the social media giant’s shareholders over an alleged failure to disclose his stake in a timely manner, has now offered to buy Twitter for $43 billion. And Starbucks, which has been facing a cross-country wave of unionization efforts, considers new employee benefits for non-union workers. Read On