DIRECTOR'S DOMAIN: Will foreign pressure reshape governance in Japan? French automaker Renault is pushing for more representation on Nissan's board committees, causing a rift that could undermine the Japanese company's new governance structure. Nissan and financial firm Nomura Holdings are both under attack for their allegedly lax oversight by global governance group ISS, which is advocating against the reappointment of the companies' CEOs. Japanese firms are also increasingly bowing to foreign activist investors and their demands for board seats and other governance changes. Meanwhile, Wells Fargo's search for a new CEO has apparently led to nothing but rejection from leading banking executives; the latest rumors suggest that interim chief Allen Parker may be given the role. Gretchen Carlson, a former Miss America (and former Fox News host), who helped remove the swimsuit competition from the pageant, is stepping down as chairwoman, following a backlash against changes at the organization. More than a dozen NRA board members, all of whom serve in an unpaid capacity, have been exposed for taking payments from the association. And in Illinois, a bill aimed at diversifying corporate boards passes but only after deleting language that would have required minority representation. Read More

DIRECTOR'S DOMAIN: The shareholders are restless. Facebook reveals that 68 percent of independent shareholders voted to strip CEO Mark Zuckerberg of his role as chairman. Concerns about the social network's leadership and its accountability may be real, but the vote was largely symbolic since Zuckerberg controls the majority of voting shares; another proposal attempted to eliminate that advantage, too, but was likewise out-voted by the CEO and his supporters. Among eight failed proposals was one championed by conservative groups that would have mandated political diversity on Facebook’s board. Meanwhile, a study reveals the power of digitally savvy directors to positively influence revenue growth at large companies—as long as there are 3 or more on the board. Ironically, BlackRock, which has been a prominent champion of diversity and independence on boards, is being sued by the hedge fund Saba Capital for allegedly blocking outsiders from board seats. Plus, in the name of diversity: The 150-year-old YWCA Greater Cincinnati welcomes its first male directors to the board. Read More

DIRECTOR'S DOMAIN: Exec pay keeps making waves: A new survey reveals that average CEO compensation is growing at almost twice the rate as average worker pay. Tesla boss Elon Musk tops the list with a $2.3 billion package. Also record-setting was the turnover rate for CEOs, which hit an all-time high in 2018, thanks to both planned and forced exits, with the latter mainly due to ethical lapses, financial performance or board struggles. Meanwhile, Facebook investors are bringing a bevy of shareholder proposals to this week's meeting, designed to limit Mark Zuckerberg's power over the company or to break it up. There are remarkably few women in the C-suite and boardrooms of the 10 largest companies going public this year. A proposed $44 million settlement meant to address lawsuits against the Weinstein Co. by accusers, creditors, and lawyers could come undone as some of the women who have accused Harvey Weinstein of sexual misconduct have signaled they won't agree to terms. And the latest governance finger-pointing is directed at Boeing, whose board is now facing intense scrutiny. Read More

DIRECTOR'S DOMAIN: General Motors and CBS are charting new territory as some of the first Fortune 500 boards to include more women directors than men. The Nike board faces a re-opened shareholder suit claiming the board knew about but didn’t address sexual harassment claims. McDonald’s this week was hit with 25 new sexual harassment charges that cite misconduct at restaurants across 20 cities. Meanwhile, hourly workers at Walmart pinned their hopes on presidential candidate Bernie Sanders, who is advocating for them to gain a seat on the board. Sander's rival Kamala Harris proposes fines for large companies who pay women less than their male colleagues. And several observers take a closer look at CEO pay practices and the concerns they are raising among employees, consumers, and investors. Read More

DIRECTOR'S DOMAIN: Rule followers: Shareholders are filing more proposals targeting social and environmental issues they want companies to address—doubling the percentage of climate change-related proposals filed at non-energy sector companies in the past five years. But SEC rules categorize many of these shareholder demands as unreasonable, finding that rather than targeting high-level governance issues, they amount to micro-management of company business. Some suggest it's time the agency update its rules to clarify what types of social and environmental shareholder proposals are appropriate. Meanwhile, Facebook is said to be nearing a deal with the FTC that would require the social media company to submit to 20 years of oversight and place privacy policing in the hands of its board. At a time when many companies have been derided for inflated CEO pay packages, Wells Fargo’s search for a CEO is apparently slowed by limits on what the bank can offer a new executive. Read More

DIRECTOR'S DOMAIN: Warren Buffett set off shock waves this week with his assertion that corporate board member are overpaid and under-performing when it comes to independent decision-making. For a sense of what he might consider reasonable pay, note that Berkshire Hathaway board members are paid less than $7,500 annually. Others argued that rising director pay is justified, given the increasing demands on directors. A novel demand arose this week when a judge ordered the PG&E board to visit the scene of a devastating fire which the utility says was likely caused by its equipment. The Boeing board revealed it had not discussed safety when considering plans for a fast-to-market 737 Max jet. In other news, the FTC apparently seeks governance changes at Facebook, while lawmakers want the FTC to hold corporate officers personally liable for the social media company’s privacy violations. Read More

DIRECTOR'S DOMAIN: Moving on: For nearly two decades former Google CEO Eric Schmidt has sat on the company's board, but he will step off the Alphabet board next month, as will Diane Greene, Google’s former head of cloud computing. Rising CEO pay packages, many now in the double-digit- and even triple-digit-millions, continue to elicit scrutiny, and calls by professional investors for the SEC to require corporations to explain their methods for setting executive pay. The Boeing board faces questions about its risk management practices, but shareholders are unable to secure a split of chair and CEO roles at the aircraft maker. Facebook’s lapses in privacy protection lead to a lawsuit against the company’s board members and talk that the FTC seeks to hold CEO Mark Zuckerberg personally accountable for the data leaks. Plus board news from Tesla, the NRA, Bayer, and more. Read More

DIRECTOR'S DOMAIN: Vroom. Women now make up a majority of the board at General Motors—a symbolic turning point for the traditionally male-dominated auto industry. This shift comes as the overall size of the GM board shrinks from 13 to 11 with the retirement of two male directors. Another automaker trims its board this week, also: Tesla will go from 11 to seven directors—only two of the remaining group are women. A new study shows that low board turnover is a real contributor to the lack of diversity in the boardroom—with the average director staying in the job for about a decade. A critic calls out the Disney board for approving a plan that pays the CEO more than 1,000 times what the average worker makers—Walt Disney’s grandniece Abigail Disney says that’s “insane.” The CBS board calls off its CEO search for now, extending Joseph Ianniello’s interim CEO status through the year. Read More

DIRECTOR'S DOMAIN: It’s proxy season and executive pay is top of mind: CEO pay continues to rise and stock-based compensation is growing as a percentage of total packages. A revealing report shows at least 13 CEOs make 1,000 times more than the average worker at their companies, with many execs on the list hail from brands well known to consumers—Disney, Starbucks, and Chipotle to name a few. Meanwhile, observers suggest investors need transparency into how pay and performance are actually linked. Another report finds that pay practices involving restricted shares are boosting exec annual salaries by up to 25 percent at some financial and real estate firms where dividends are large. In other news, mutual fund giant Vanguard is taking aim against over-boarded directors and promises to vote against the election of directors who would sit on more than four boards. Amazon employees throw their weight behind a shareholder proposal demanding the company take action to mitigate its environmental impact. The Boeing board, quiet since the company's aircraft have been implicated in two fatal crashes, is stepping up to investigate safety policies. Read more…

DIRECTOR'S DOMAIN: As Artificial Intelligence comes to life, ethical considerations are front and center for many boards. Boeing, under increasing pressure to explain why pilots apparently struggled to overrule automatic controls before the crash of two Max 737 jets, creates a new board committee to review design and safety standards. Amazon shareholders win SEC approval to have a say in whether the company can sell facial-recognition software to governments. Google pulled the plug on a brand new A.I. ethics board after employees loudly criticized its choice of board members, including representatives of organizations that deny climate change or promote military use of drones. Helpfully, commentators are already offering perspectives on what boards need to think about when it comes to AI. Meanwhile, PG&E gets a new CEO and board, Illinois advances a bill that would require corporations to add women and African Americans to their boards, and members of the Sackler family, accused of profiting from the opioid epidemic, are leaving the boards of prominent non-profits. Continue reading…

DIRECTOR'S DOMAIN: Troubling times for many boards. The Purdue Pharma board, accused of plotting to illegally increase sales of prescription painkillers, denies the charges. Google’s just-named AI ethics board is coming apart as critics take aim at the credentials and politics of its members. PG&E, as it remakes its board, gets a talking-to from California Governor Gavin Newsom for choosing directors without experience in managing utilities. The Wells Fargo board finds itself without a CEO or apparently a succession plan to replace him. Meanwhile, the push to include workers on corporate boards continues, with Walmart employees arguing for a voice in the retailer’s decision making. Read More

DIRECTOR'S DOMAIN: Meet your new board colleague, an algorithm. A VC firm is the first to give a board vote to an A.I. program — and pundits have quickly piled on with opinions about how this might play out. Or, as one A.I. enthusiast might put it, What could possibly go right? The suggestion that the times they are a changin’ is also at the heart of Board 3.0, a proposal to remake corporate boards with more involved, informed directors who have the market credibility to assuage activist investors and shift the dynamic of situations like the one at Bed, Bath & Beyond, where the entire 12-person board could be replaced at the insistence of three investors who collectively hold a 5 percent stake in the company. Meanwhile, some boards are being asked to consider whether political persuasion shouldn’t be a diversity criteria, ensuring boards don’t lean totally liberal or conservative. On many fronts, it looks like a brave new world for governance. Read More

DIRECTOR'S DOMAIN: CEO pay is back in the news this week as companies facing serious challenges, including Boeing and Wells Fargo, report hefty raises for chief executives. Some observers ask whether stock plans that incentivize healthcare CEOs to grow share prices contradict the notion of patient-centered care, while others ponder the possible response to boards that approved sizable CEO raises despite negative shareholder returns. And if you are pondering a new board recruit, note a new study that reveals that companies whose boards have at least three digitally savvy directors show significantly higher revenue growth. Read more…

DIRECTOR'S DOMAIN: Though we usually associate it with a sense of uncertainty and peril, “crisis” literally means a moment of decisive change. It’s certainly what boards need to be ready for. A partial roundup of this week’s crises: Boeing faces global fears that the 737 Max 8, the best-selling airliner ever, which is currently banned from flight in most countries, may be fatally flawed. Several investment firms found themselves making fast management changes after a number of executives were charged with bribery and other illegal efforts to gain admission for their children into colleges. Facebook became the subject of a criminal investigation into the user data-sharing arrangements it made with other tech companies.… It’s easy to get swept up in all the hair-raising news, but we have a better idea: Use your time to prepare for the unexpected. Really! We suggest you start with the seven tips in Is Your Board Ready to Manage Through a Crisis? (which we shared last week and are sharing again because we believe it’s a timely and valuable read). Read More

This week we take a break from our usual programming to bring you a Boardspan Special Report on Managing Through a Crisis.

It's only March but already this year boards of all stripes have found themselves managing events like the sudden loss of a CEO, bankruptcy, an activist campaign or the fallout from executive misconduct. So, we gathered insights from a number of public company directors and governance experts and distilled their suggestions into a resource for all who recognize the importance of expecting the unexpected! Continue Reading…

DIRECTOR'S DOMAIN: What’s a board to do? That’s the question many are asking in the wake of Tesla CEO Elon Musk’s latest market-moving Tweets, which defy restrictions the SEC placed on his social media habits. But it’s not just the Tesla board observers wonder about—what about board members (at Facebook and other companies) who don’t have voting power or financial levers to rein in misbehaving CEOs? Wynn Resorts, whose board allegedly looked away when the company’s founder and former CEO was accused of sexual misconduct, is now subject to the largest fine ever levied by the Nevada Gaming Commission. Meanwhile, an Apple shareholder, concerned about Silicon Valley’s liberal-leaning politics, seeks disclosure of board members’ political ideologies. The PG&E board approved cutting $130 million in employee bonuses in the wake of its bankruptcy. And Indra Nooyi joins the Amazon board, bringing the total number of women to 5 out of 11. Read More

DIRECTOR'S DOMAIN: What could asset managers, employees, environmentalists and governments have in common? They are all vying to influence governance at major corporations! Sometimes, they’re successful, as evidenced by coal company Glencore bowing to investor demands that it limit fossil fuel output. Meanwhile, a hedge fund has nominated five new directors at Bristol-Myers Squibb. Nissan is backing away from a governance structure that would have entitled the new chairman of Renault to also lead the Japanese automaker’s board. A Google investor is backing employees who want a seat on the company’s board. With activists emerging from every corner, savvy boards, argues a post on the Harvard Law School Forum on Corporate Governance, will take a proactive approach, expecting activist engagement and learning to balance the role of shareholder representative and management advisor. Read more...

DIRECTOR'S DOMAIN: Corporate structures, ownership and governance are something of a hot topic this week! As Lyft prepares to go public, its founders reportedly aim for a voting structure that ensures their control (regardless of performance or ownership)—even as the S&P 500 and others have moved to block companies with such nontraditional structures. Lawyers and governance experts from many spheres are issuing public pronouncements about the challenges arising from prevalent models of shareholder-centered governance. Studies look, too, at whether ESG or diversity policies are beneficial for corporations or society. Meanwhile, PG&E promises to overhaul its board before a May meeting. REI’s CEO steps down after failing to inform his board about an affair with an industry colleague. The board of Citgo, an oil refiner and US-based subsidiary of Venezuela’s state-run oil producer, looks likely to be reshaped as global politics roil the company. Read more…

DIRECTOR'S DOMAIN: Shareholders make their voices heard in the boardroom this week. Hedge fund Starboard Value installs its chief executive as the chairman of pizza chain Papa John’s. An investor group wins support from the BP board to increase climate-related disclosures. An activist investor gets the ear of drugmaker Allergan with its demand to split the chair and CEO roles. Meanwhile, Starbucks COO Rosalind Brewer joins the board of Amazon. A report shows women now hold 30% of board seats in Australia’s top 200 companies, but a critical analysis suggests that a handful of women sitting on multiple boards may undermine the picture of diversity painted by this news. The Intel board names the company’s next CEO and the Nissan board apparently plans to dismiss former CEO Carlos Ghosn from the board at a special meeting in April. Plus our own Boardspan board member Mary Cranston, who has been a director of seven public companies, offers some sage advice on ensuring healthy board dynamics in The Three Attributes of Wise Boards. Read on.

DIRECTOR'S DOMAIN: Call it a green rush. For months we’ve noticed executives and former politicians flocking to the boards of cannabis companies (including several more this week), suggesting a gold rush is on. This week former Autodesk and Yahoo CEO Carol Bartz, upon joining a cannabis company board, compares the field to the early days of technology—vast opportunities and, to her mind, the chance to have a positive impact on people’s lives. And various cannabis company board members appear at Davos. Meanwhile, the PG&E board draws scrutiny as the utility heads into bankruptcy. The SEC investigates Nissan's pay policies. Intel’s lack of succession planning is showing. CEO confidence plummets. Continue reading…

DIRECTOR'S DOMAIN: A breakout year for ESG? Taking environmental, social and governance factors into account has always made good business sense and suddenly the decades-old investment concept is in vogue as a corporate strategy. BlackRock CEO Larry Fink says in his annual letter to CEOs that people expect companies today to help solve social and environmental problems and that only by aligning around a meaningful social purpose can a company expect to profit. Ahead of that letter, a group of BlackRock shareholders called out the investment management firm for not doing more to address climate change. Amazon shareholders demand that the company halt sales of a facial recognition technology that critics argue may violate privacy and civil rights and could abused by repressive governments. Meanwhile, tech companies increased lobbying efforts to stave off regulatory efforts some legislators believe are needed to protect personal privacy, reliable sources of information and more. Also, a new study shows that when companies are required to report gender pay discrepancies, not only are the imbalances addressed more quickly, but more women are hired and more women are promoted into leadership. Lots to ponder, but if you're short for time, skip right to this week’s must read: Boardspan CEO Abby Adlerman's interview with KKR Co-CEO George Roberts offers insights on governance, crises and a board member's greatest advantage: being well informed. Read on…

DIRECTOR'S DOMAIN: Spot on. State Street, alongside many others including Boardspan in our top ten hot topics of 2019, recognizes that oversight of corporate culture is a board priority for the new year. In a letter to public companies the investment firm urges boards to take a proactive role in this area and offers a framework for doing so. Meanwhile, the Alphabet board faces a shareholder lawsuit for its role in the alleged cover-up of sexual harassment claims made against senior executives. The board of privately held WeWork is taken to task by the media for apparently allowing the CEO to profit from leasing property he owns to the company. The board of Purdue Pharma, maker of the pain reliever Oxycontin, is sued by Massachusetts’s attorney general for its role in the opiate epidemic with new allegations suggesting that members of the Sackler family, the majority owners, pushed aggressive sales tactics even after there was evidence that the drug was being abused. Taken together, it does look like company culture will play a prominent role in business again this year. On another note: the government shutdown may cause extra headaches for boards if the short-staffed SEC is unable to review offbeat shareholder proposals that companies would like to see dismissed. Read more.

DIRECTOR'S DOMAIN: Important vs. Urgent. It’s not always easy to make time for the critical but non-time-sensitive issues, and yet that’s exactly what high-value boards will do as they map out their plans for 2019. Boardspan has created a Top 10 list of hot topics you’ll want to consider as you draw up your agendas. A new Harvard Business School survey of large company boards finds that technology & innovation, arguably among the most important opportunities and threats across all industries, is not considered a top concern by most directors. Another study finds that even as large company boards grow more diverse, C-suites remain heavily dominated by white men. A helpful report from Harvard Business Review suggests a new way of thinking about the critical issues of privacy and security that forward-thinking board members will want to consider. Lots to ponder as you contemplate what is too important to be set aside --even when the next urgent issue arises. Read on…

DIRECTOR'S DOMAIN: Scrutiny. It could be the Word of The Year. The biggest woes of corporate governance this year have been brought to the forefront by people or organizations scrutinizing situations that troubled them, practically begging for a deeper dive. As the Wall Street Journal reveals about Carlos Ghosn's fall from his role atop Renault and Nissan to a Tokyo jail cell, his lavish lifestyle led executives wary of his counter culture attitude to begin secretly investigating their CEO. The scrutiny of reporters on the #MeToo beat dethroned Les Moonves at CBS, where this week the board confirmed that it is justified in firing the former CEO without severance. Now shareholders are scrutinizing how Amazon’s business practices affect and are affected by climate change. Civil rights groups are scrutinizing Facebook's governance structure, as fresh accounts surface of alleged privacy lapses. And the list goes on. Word to the wise: As a board member, you can use scrutiny to your benefit by proactively examining unusual situations and addressing puzzling findings before they become problematic. Read more…

From all of us at Boardspan ... Happy Holidays! Director’s Domain will take a brief break and see you in the New Year.

DIRECTOR'S DOMAIN: Naughty or nice, activist investors continue to make their presence felt. They invested an astonishing $74 billion in the year that ended in September, mostly in large companies that they hope to make more profitable, often by reshaping boards and, with them, strategic decision making. This week’s news shows the trend continues with an American hedge fund taking a $1 billion stake in France’s Pernod Ricard and looking for changes to the board, and other major shareholders signaling they want to see change at Yelp and Cars.com. Tesla CEO Elon Musk is back in the news, saying in a 60 Minutes interview that it’s unrealistic to expect the largest shareholder to defer to the chairman of the board and that he does not respect the SEC. He later clarified his views on Twitter, claiming that Tesla will retire the role of chairman in three years. Legal experts offers some insights into the legal implications of a CEO making pronouncements by Tweet. Another legal team offers some helpful info on what to expect in the 2019 proxy season. And the word is in: Women have the most success gaining board seats where quotas are imposed by law. Read On.

DIRECTOR'S DOMAIN: Compliant or complicit? That is the question. At least that's what many a boardroom pundit is asking this week. A draft report into claims of sexual misconduct by former CEO Leslie Moonves suggests that some directors knew of his alleged abuse and failed to alert other board members as required by the duty of loyalty. Governance experts say directors at Nissan knew, or should have known through their review of financial filings, about the irregularities in compensation reporting that have landed its CEO and chief of staff in a Tokyo jail. A shareholder suit against the Lululemon board claims directors should have been aware of and addressed the culture of harassment that took place during the ousted CEO's tenure. Meanwhile, the Facebook board signals its support of COO Sheryl Sandberg’s probe into George Soros and his financial interest in the company. Also, the Wall Street Journal dissects the decision by the board of Dick’s Sporting Goods to rewrite its gun sales policies in the wake of mass shootings, choosing to do what it thought was the right thing, regardless of legal requirements or financial consequences. Read More…

DIRECTOR'S DOMAIN: Oversight. The word can, of course, refer to the all-important governance function of ensuring that the executive team is properly carrying out its responsibilities, and yet it can also refer to a lapse or mistake or neglect of something. When a board doesn’t live up to the first definition, it usually ends up defending accusations that it has engaged in the second. The Nissan board is in that situation, following the arrest of its now-deposed chairman, Renault CEO Carlos Ghosn, who is accused of financial improprieties that observers say would not have been possible if the board had been doing its job. Oversight, (the governance function), would be the best form of damage control for Facebook, suggests one observer, who advises CEO Mark Zuckerberg to “submit to governance” and let the board assume the role of his boss, as a way to right the beleaguered social media company. And oversight is presumably what activist investors wanted at Campbell Soup, where they have won the right to install two board members and participate in the election of a new CEO. In other news, as “ESG” programs move from “nice to have” to “must have” in the eyes of many, Google employees, once again, aim to persuade the leadership team to place more value on the “Social” aspects of business; on Wednesday hundreds of employees signed a letter protesting a deal that would bring a censored version of the search engine to China. Continue Reading.

DIRECTOR'S DOMAIN: Regulators are making their presence felt: Wells Fargo receives a rebuke from the Office of the Comptroller that sidelines a top executive. Tesla responds to SEC demands and names a new chair to provide oversight of CEO Elon Musk. The SEC warns public companies that a cybersecurity failure may be considered a violation of rules governing internal accounting controls. And a different type of cybersecurity risk seems to be on the horizon: realistic-looking video of a CEO saying whatever a forger wants them to. Meanwhile, the New York Times takes a deep investigative dive into executive decision-making at Facebook and suggests that information flow to the board is not always as fluid as directors might like. Finally, some 17 percent of S&P 500 CEO’s hired from outside are gone within three years—could better succession planning help? Read More…

DIRECTOR'S DOMAIN: Politics. They’re on everyone’s mind, including many a vocal CEO. A recent Stanford University survey on how CEO activism shapes public perceptions suggests that taking a public stand yields decidedly mixed results. The fallout from the #MeToo movement continues to require board attention on many levels: (i) pension fund managers are increasing their due diligence around harassment reporting; while (ii) executive compensation agreements are being rewritten to explicitly include harassment as cause for termination. Decisions facing the CBS board since former CEO Les Moonves’s dismissal over harassment accusations may delay it from naming a new CEO for months. Meanwhile, just in time for boards conducting their annual performance evaluations, Corporate Board Member publishes suggestions for avoiding common assessment mistakes, courtesy of Boardspan CEO Abby Adlerman. Read On...

DIRECTOR'S DOMAIN: Harassment. It’s a topic that is clearly not going away. The New York Times reported last week that three former Google executives had been protected by the company after it had concluded they had engaged in sexual misconduct—one executive allegedly walked away with a $90 million package. The critical query of “What did the board know?" has been making the rounds, along with bitter complaints by employees, some of whom plan a walkout today (Thursday). Meanwhile, some 250 people, so far, have been interviewed as part of ongoing investigations into the culture at CBS, where several top executives including CEO Les Moonves were ousted for alleged misconduct. Fortunately, new approaches to harassment prevention continue to be explored. Tesla’s board faces a shareholder lawsuit accusing it of covering for Elon Musk and his troublesome tweeting. CEO Mark Zuckerberg is summoned to appear before UK and Canadian parliamentary committees, which seek information on Facebook's data collection and sharing policies. Plus, we've gathered some great insights here for boards wondering how to guide their CEOs in this era of corporate activism or how to ensure diversity throughout an organization. Read More.

DIRECTOR'S DOMAIN: Deep breath. After a long, steady stream of crises, the boardroom is relatively calm this week. It's a perfect opportunity to step back and contemplate what a board needs to do its job well and to prepare for the challenges that may be lurking around the next bend. On cue, Warren Buffet, Mary Barra, Jamie Dimon, and others who delivered their Commonsense Principles of Corporate Governance two years ago have issued an update. A new risk framework is proposed to help boards make informed decisions that consider the potential downside (and upside) of changes in a fast-moving world. A new study helps boards understand the impact of compensating CEOs with stock. Ellen Pao, writing in Wired, challenges the rationale of founders' rights, which can leave powerful public companies devoid of standard governance mechanisms. Meanwhile, New York’s Attorney General files suit against Exxon-Mobile claiming the company engaged in a long-standing scheme to deceive investors by downplaying the risks posed by climate change. The CBS board, grappling with the ouster of former CEO Les Moonves and subsequent resignation of several board members, loses its interim chairman. Plus, lots of other good reading here…

DIRECTOR'S DOMAIN: Executives as diplomats. Prominent corporate leaders this week find their business relationships, ethics, and reputations mixed up with a political crisis that only underscores how complex and dynamic global business culture has become. The disappearance and alleged murder of Saudi journalist and dissident Jamal Khashoggi on the eve of a high-profile Saudi business conference, and as the board composition of a major new Saudi initiative was announced, makes evident the diplomacy now expected of top leadership. Many executives have backed out of the conference and off the board, but given the billions of dollars of Saudi investments in U.S. businesses, this topic is likely to dominate board conversations for some time. Meanwhile, a number of public pension fund managers issued a call for Mark Zuckerberg to relinquish the chairman role at Facebook. Heirs of the original Campbell’s Soup family are complicating the plans of a hedge fund looking to reseat the board. Research shows that older, larger companies are making great strides toward gender diversity on boards—while fresh-faced startups are not. Plus, Boardspan CEO Abby Adlerman offers her perspective on the Chair-CEO role in a Reuters article on Citigroup CEO Mike Corbat. Read More.

DIRECTOR'S DOMAIN: Busy boards. The Tesla board is rumored to favor James Murdoch, outgoing CEO of 21st Century Fox, son of media mogul Rupert Murdoch and an independent director at Tesla, to serve as its new Chairman. It’s a high profile role and whoever fills it surely will be looked upon to curtail CEO Elon Musk’s habit of speaking his mind on Twitter and more. (See the Reuters article below for a comment on just that theme by Boardspan's own CEO Abby Adlerman.) The Uber board has evolved, says CEO Dara Khosrowshahi, who suggests that the ride-hailing company’s high-profile board battles are a thing of the past. The GE board’s ouster of CEO John Flannery in favor of independent director Larry Culp apparently has other chief executives questioning the intentions of some who sit on their boards. Activist investors are making waves by buying big stakes in Starbucks, Campbell Soup, and others— and a new report suggests even more activity is on the horizon. And the beat goes on. Continue Reading…

DIRECTOR'S DOMAIN: Coming soon to boardrooms: More women. At least, that’s what a new law signed last weekend by California Governor Jerry Brown aims to ensure. Critics have been quick to point out various flaws in the legislation, and it will be interesting to see which organizations will sue and take on a very public fight to protect the perpetuation of all-male boards. Investors, too, are demanding greater female representation on boards: State Street this week said it has already voted against 500 nominating committee chairs on all-male boards and warns others that have not heeded its calls for change that more "no" votes are yet to come. Meanwhile, the SEC will require Tesla CEO Elon Musk give up his role as chairman of the electric carmaker as punishment for his inappropriate tweeting; a New York Times report on how Musk’s deal with the government fell apart and came back together only underscores how much influence he carries with the board. The Times’ pursuit of another story—how non-profit medical center executives profit from their appointments to for-profit healthcare boards—has resulted in some major shakeups at New York’s Memorial Sloan Kettering Cancer Center. Meanwhile, embattled retailer J.C. Penney names former Joann Stores CEO Jill Soltau as CEO. Read More.

DIRECTOR'S DOMAIN: The era of accountability. Just about everywhere you look, cultural shifts and demands for greater corporate responsibility are remaking boards and rewriting governance standards. The CBS board, still reeling from the forced departure of CEO and chairman Les Moonves amid sexual harassment allegations, learns its lead independent and one other director are stepping down unexpectedly, even as the company names a new interim chairman. Shareholders again attack Mark Zuckerberg’s dual role as CEO and chairman of Facebook in the wake of the overnight resignation of Instagram’s CEO and CTO. The board of gun maker American Outdoor Brands, having lost its battle against a shareholder proposal, is required to produce a safety report. Michigan State University’s board of trustees is the focus of protests by students and others concerned that the trustees did not do enough to protect students from former sports team doctor and convicted sexual abuser Larry Nasser. In other news, the Merck board tears up its age-limit policy to keep CEO Kenneth Frazier on as CEO. England’s Labour Party would require workers representatives on all boards. A study of shareholder activism in the U.K. shows that companies with more female directors are less likely to be targeted. And a U.S. law firm suggests that given the increased public attention paid to sexual harassment, corporate culture, gender pay gaps, and diversity, boards should see it's time to be proactive not reactive on these issues. Hear, hear. Read on...

DIRECTOR'S DOMAIN: Taking it to the Boards… Shareholders have been more active than ever in 2018 and are winning more concessions. Cases in point: Both Symantec and Qualcomm say they will add new directors at the behest of investors. The California state pension fund, which manages $360 billion in assets, has voted against 43% of executive pay packages and says its tactic of voting against Nom & Gov Chairs of all-male boards is beginning to persuade executives of the need to include women directors. ISS is currently weighing the possibility of recommending ‘No' votes against directors whose boards don’t include women. Meanwhile, in the news: The Justice Department has opened an investigation into Tesla CEO Elon Musk’s tweets about going private. Wells Fargo is rumored to be looking for a new CEO. Women now make up 30% of directors at large UK companies. And … observers question whether the Saleforce board will come to rue Marc Benioff’s purchase of Time, and why the CBS board will suffer no consequences despite its responsibility for company culture. Read On...

DIRECTOR'S DOMAIN: Information is powerful—if you have access to it and trust its source. That “if” plays a crucial role in various boardroom dramas unfolding this week. Theories are circulating as to why the CBS board, which apparently learned months ago of sexual harassment allegations against CEO Les Moonves, did not act until this week to negotiate his departure and remake the board. Other theories are in the air about why a Goldman Sachs executive’s call to a whistleblower line was not reported to the bank's board. Meanwhle, Facebook directors are being sued for allegedly putting the interests of CEO Mark Zuckerburg over shareholders. Jack Ma announced that his upcoming retirement from Alibaba comes after 10 years of succession planning to ensure the company’s enduring viability. The U.S. Olympic Committee elects Susanne Lyons as its new Chair, while underscoring their emphasis on keeping athletes safe. Read More.

DIRECTOR'S DOMAIN: Better qualified. Studies of gender diversity quotas for boards in Europe show that female directors appointed after quotas took effect were not less qualified than their male peers—in fact they were more likely to have professional degrees and certifications than their predecessors. Nevertheless, debate rages on about the California law that will require companies to include at least one woman director in 2019 and two or more in 2021, if signed into law by Governor Jerry Brown. Meanwhile, a prominent director steps off the board of the company that owns MoviePass, with claims that management has actively bypassed the board on decisions that require board approval. Theranos, once valued at $1 billion, is being dissolved, leaving investors with hundreds of millions of dollars in losses. The board of USA Gymnastics accepted the CEO’s resignation and has appointed a management committee to run the organization as it seeks a new leader. CBS looks to settle with the Redstone family ahead of a court date. Read on...

DIRECTOR'S DOMAIN: Step by step. California legislators moved a little closer on Wednesday to requiring public companies based in the state to include women directors. At Boardspan, we think that’s a good thing—to understand why, see “Say Yes To Quotas!” (below). Meanwhile, a new study looks into the real costs of unethical leadership, and Ellen Pao, perhaps best known for pursuing a gender discrimination lawsuit against Kleiner Perkins, writes on the need for CEOs and boards to embrace a more ethical approach to leadership in the social media space. Harassment issues continue to make the news, as the Barnes & Noble board says that former CEO Demos Parneros was fired for misconduct. CBS shareholders file a suit against the company for not making public the allegations against CEO Les Moonves. And the governance crisis ignited by harassment allegations at Wynn Resorts yields five lessons boards can learn from. Keep reading...

DIRECTOR'S DOMAIN: Does corporate governance fulfill its mission? As Senator Elizabeth Warren and President Trump propose radically different reforms to governance regulations, observers take up the overarching question of what governance could and should be. The House of Representatives is considering new governance norms of their own with a bill that would prohibit legislators from sitting on corporate boards. Meanwhile, the battle for control of pizza maker Papa John’s continues, with the founder and board pitted against one another in an intensifying and very public fight. The Tesla board is criticized for failing to rein in CEO Elon Musk. And a new study of hedge funds sounds a warning to boards approached by activists: demands for cost-cutting don't often yield the favorable results sought. While the responsibilities and challenges facing boards are growing, the number of people seeking these roles continues to grow, too. We are often asked how to pursue a board opportunity—see our Boardspan Library article below for three easy steps you can take to help you land a seat. Read More.

DIRECTOR'S DOMAIN: Diversity in leadership, a perennial topic in business media, gets plenty of buzz this week. Erika Hayes James, dean of Emory University's Goizueta Business School, joins the SurveyMonkey board, bringing the software company’s board to gender parity. California moves one step closer to a quota system, which would require more female representation on boards, and critics make noise. Reports of the decreasing number of women CEOs of large companies continues to reverberate after Pepsi CEO Indra Nooyi’s resignation announcement last week -- and Boardspan CEO Abby Adlerman discusses how boards can reverse the trend. Meanwhile, the Tesla board found itself defending CEO Elon Musk’s assertion that the carmaker has been pursuing privatization; it named a special committee to evaluate the options, even as the SEC reportedly subpoenaed the company for information about Musk’s tweets. A congressman’s arrest over insider trading charges is inspiring a closer look at whether legislators should sit on corporate boards. At least one pundit is asking why Les Moonves hasn’t stepped down at CBS and whether his alleged misconduct will be overshadowed by other revelations from CBS’s legal battle with Viacom. Read on for all the details. Read More.

DIRECTOR'S DOMAIN: Where are the women? Opinions abound as to why the Fortune 500 C-suite, which peaked at 32 women CEOs last year, is not diversifying more rapidly. When Indra Nooyi leaves Pepsi later this year, only 24 women will sit atop Fortune 500 firms. Perhaps the defense industry has something to teach others, as three of its largest companies will soon have women chief executives. In other news, Tesla’s board issued a statement suggesting that CEO Elon Musk’s remarks about taking the carmaker private were not just idle tweeting; nevertheless, experts expect the S.E.C. will investigate his market-moving comments. Salesforce has a new CEO—make that a co-CEO, as Keith Block joins Marc Benioff in a dual CEO-ship. The CBS board has taken charge of three investigations into sexual harassment and workplace culture at the media company. Rep. Chris Collins (R-New York) is arrested for insider trading, accused of passing along information he learned as a board member to family members who traded the stock ahead of news that sent the company’s shares sliding. Read More.

DIRECTOR'S DOMAIN: Complicated times. The CBS board, in the midst of a lawsuit likely to determine the company's chance of remaining independent, must now consider whether longtime CEO Leslie Moonves will continue to lead the media company in the face of allegations of sexual harassment. For now Moonves, who denies any wrongdoing, remains in charge. Separately, Moonves and other CBS executives are accused of destroying evidence related to the battle for control of the company. Meanwhile, Mike Cagney is back in the money: The former CEO of SoFi received financial backing from two venture capitalists who sat on the SoFi board when Cagney was ousted following an investigation that revealed he was having an extramarital affair with a coworker, though he had told the board he was not. Papa John’s founder, who was forced to resign his role as chairman after reports he made a racial slur, is now suing the company for communications between board members related to the decision to oust him. The board and management of Univision are embroiled in a dramatic feud. And in other news, Land O'Lakes announces new leadership, bringing the number of women CEOs in the Fortune 500 to 25. Read More.

DIRECTOR'S DOMAIN: CEO turnover. It’s happening more often and with less predictability than ever before. This week a Canadian pipeline company lost its CEO amid a board investigation. Lululemon presented its new CEO, several months after the apparel maker’s former chief executive stepped down following allegations of misconduct. The CEOs of Fannie Mae and Gilead Sciences announced their departures. We learned that Fiat Chrysler’s CEO died unexpectedly following surgery. Boards that haven't mapped out a leadership path for the future will want to check out the Wall Street Journal article on the importance of succession planning for catastrophic events and learn about the real costs of not having a strong succession plan in this article from the Boardspan Library. Organizations that have recently been through a CEO change might take a closer look at the three actions Harvard Business Review suggests boards can take to help new CEOs address their leadership development gaps. In other news, the board of Papa John’s put in place a “poison pill” to prevent the company’s founder from regaining control. And the median pay to corporate directors hit $300,000. Read more.

DIRECTOR'S DOMAIN: Second thoughts: Papa John’s founder resigned as board chair, but now thinks he made a mistake by doing so, saying the board pressured him to step down before it had conducted an investigation into his alleged use of the “n-word.” It turns out that (Papa) John Schnatter was also in talks with Wendy’s about a possible merger at the time. Texas Instruments chair and former CEO Rich Templeton is back in the corner office just months after announcing his retirement; he returns to the job after newly promoted CEO Brian Crutcher resigned over an apparent violation of the company’s code of conduct. Meanwhile, if you were wondering whether the GE board could have done more to prevent the company’s downturn, you’ll be interested in an analysis in Harvard Business Review that suggests there were three big problems with the board that might have made a difference. And if you missed it last week, be sure to read Boardspan CEO Abby Adlerman's latest thinking on governance in this era of rising board expectations. Read More.

DIRECTOR'S DOMAIN: #MeToo hasn't been dominating headlines of late, but the movement’s impact continues to be felt in the boardroom. This week the Miss America pageant’s board is in upheaval after new chair Gretchen Carlson, whose accusations of sexual harassment ended the career of Fox News chair Roger Ailes, pushed to end the swimsuit competition. Lawyers say executive compensation agreements are being rewritten to include clawbacks for harassment-related resignations and other measures designed to deter bad behavior. In other news, shareholders voted a Bed, Bath & Beyond director off the board as a protest of the executive compensation plan. McKesson shareholders are targeting an audit committee member to protest what they see as the company's failure to mitigate the risks of distributing opioids. And Dow Chemical settles with the SEC after a three-year investigation into the reporting of executive perks--a move seen by some observers as an SEC warning to all. Amid it all, one thing is clear: The pressure on boards to prevent crises of misconduct, accounting, and much more, while providing sound strategic advice is changing the expectations for board service. Read Boardspan CEO Abby Adlerman's latest article for insights you can use on governance in this new era. Read more.

DIRECTOR'S DOMAIN: How to achieve more diverse boards? Let us count the ways: California considers a gender quota system. New York City's Comptroller requests companies be more transparent with their diversity stats—and gets a measurable response. Real estate investment trusts, presumably responding to public pressure, elect women directors in record numbers. --All of this may be good news for the organizations affected, as a new analysis suggests that companies with more female directors are less likely to be targeted by activist investors. Meanwhile, GE is revamping its business and its board. Increasingly, technology company directors don't hear shareholder complaints... because they are skipping annual meetings. An analysis by a couple of Canadian professors shows that a stronger board can mean less CEO pay. Plus a series of Q&As with prominent board members in Forbes offers some interesting insights. Click here to read all about it.

DIRECTOR'S DOMAIN: Let’s face it – being a CEO is not for the faint of heart. One day you’re on top of the world and the next day you feel squashed like a bug. And guess who has the ultimate accountability to make things right, better yet help preempt the problems? The board, of course! As Volkswagen’s supervisors struggled to find their footing, Theranos’ woes continue to get daily press and even state university regents lose their way, boards need to help find true north with and for their CEOs. The Wall Street Journal suggests we should humanize our leaders just a little bit more. And as we go to press, we’re watching the news of Intel’s CEO resignation over an employee fraternization matter. All that and much more in today’s Director’s Domain…happy summer solstice to all. Read more.

DIRECTOR'S DOMAIN: The shareholders are restless. In the past week, annual meetings at Facebook, Google, and Tesla have been scenes of protest, complaint, and shareholder proposals—evidencing a growing frustration not only with governance issues, but with the power tech companies have to influence outcomes for other businesses, consumers, and citizens. Activist investors demand that pharmaceutical company Allergan split the chair from the CEO’s role. Meanwhile, Starbucks announces that its chairman Howard Schultz is leaving the board but retaining the right to sit in on meetings; pundits suggest the coffee company founder will seek political office. The U.K. Department for Business, Energy & Industrial Strategy releases comments from U.K. executives attempting to justify the lack of women directors, and let’s just say, they seem to say more about the commenters than about women directors. And, if it wasn’t already apparent, Forbes points out that a shift in public perceptions is leading more people to view boards of directors as responsible when companies experience ethical lapses. Read more.

DIRECTOR'S DOMAIN: Crisis management. In an era where consumers, employees, shareholders, regulators and the media are more attentive and vocal than ever, crises can grow quickly. And, the latest evidence suggests, regaining trust after a crisis is more expensive than ever. Just ask Facebook, Uber, or Wells Fargo. Fortunately, there are steps a board can take to be ready for bad news and traits a board can look for, and help cultivate, in its CEO to prepare them to lead through crisis. Read on for articles about both. It probably wouldn’t hurt to read this week’s primer on note-taking in the board room, too, so you know where your own scribbles could end up. As for this week’s crises: U.S.C. loses its president amid a sexual abuse scandal, a whistleblower accuses former Infosys directors of wrongdoing, and the boardroom battle for control of CBS returns to court. Despite the calamitous times, CEOs are feeling more optimistic than they have in years… Hmmm, sounds like a good time to prep for the unknown. Read more.

DIRECTOR'S DOMAIN: Women CEOs, who last year held only 32 spots in the Fortune 500, continue to decline in number and are now down to 24. Some blame industry challenges for last week's sudden retirement of Denise Morrison from Campbell's Soup as well as the departure of Mondelez’s Irene Rosenfeld last summer. Regardless of reason, experts suggest that boards have not done enough to fill their pipelines with women who could take the helm. Meanwhile, one of the few African American men to lead a large company, Lowe’s new CEO Marvin Ellison, will be contending with activist investor Bill Ackman, who revealed a $1 billion stake in the retailer. The Amazon board, which recently acknowledged the need to include diversity candidates in future board recruitments, is taken to task for its current composition. Wynn Resorts shareholders voted down its executive pay plan. Facebook’s new director may escape a shareholder vote. USA Gymnastics remakes its board. And so much more. Read more.

DIRECTOR'S DOMAIN: Boards that don’t live up to the expectations of shareholders and employees are getting an earful this week. Tesla is hearing from shareholders and proxy firms unhappy with what they see as a lack of independence on the board and too much power in the hands of Chair and CEO Elon Musk. A similar scenario playing out at Facebook has shareholders likening the company’s governance structure to 'a dictatorship' and proxy advisors withholding support for the reelection of CEO Mark Zuckerberg as Chair. Amazon, after initially rejecting a shareholder proposal on the topic, reversed course and adopted a board diversity policy after it had garnered employee support. Meanwhile, Shari Redstone and CBS are engaged in a high-profile battle, each trying to outmaneuver the other for control of the CBS board, and therefore decision-making power to decide whether to pursue a potential merger with Viacom; a judge has ordered both sides to refrain from further moves until he issues a ruling—expected today. Read more.

DIRECTOR'S DOMAIN: Activism of all stripes is making headlines this week. Employees at Amazon are challenging the company’s stance on board diversity after Amazon opposed a shareholder proposal that would require it to formally consider diversity candidates. Shareholders of gun maker Sturm, Ruger & Co. won the firm's agreement to publicly report the actions it is taking to prevent gun violence. Investors in Telecom Italia defeated Vivendi in a shareholder vote, winning control of the board. Tesla shareholders proposed a change in directors that would leave CEO Elon Musk’s brother without a seat. And that's just some of the change demanded by activists! Meanwhile, new research shows that while all new CEOs generally engender short-term inefficiencies, over the long term outsiders tend to boost productivity more than those promoted from within. Another study shows the median salary of women CEOs of S&P500 firms bests that of men by nearly $2 million. And Netflix is upheld as an example of a new, more transparent era of board information. Changes, big and small, are shifting the landscape for boards. Read more.

DIRECTOR'S DOMAIN: Just do it. Women at Nike took the company’s mantra to heart this spring, hurdling over the human resources department to create their own internal report on harassment and discrimination in the workplace. At least six top executives are leaving in the wake of the report and onlookers are now asking what the board could have done differently to recognize and disrupt a culture allegedly unfriendly to women. Meanwhile, What’sApp founder Jan Koum, who has sat on the Facebook board since selling his company to the social media giant in 2014, is apparently resigning over the company’s data privacy practices. Xerox’s chief executive and its chairman are both stepping down, as activist investor Carl Icahn appears to be winning the battle to keep the company from being acquired by Fuji. Saudi Aramco, the world’s largest oil company, appoints its first female director—an unexpected event in Saudi Arabia, where laws prevent women from making many of their own decisions. Goldman Sachs is called out for failing to improve the gender balance of its board. And proposals to increase the gender diversity of Canadian companies seem to be gaining ground. Read more.

DIRECTOR'S DOMAIN: Fallout from the Wells Fargo scandals continues, with the bank now forced to give the Office of the Comptroller of the Currency the right to make changes to its executive ranks and board of directors. Of course, the board has undergone plenty of change since wrongdoing at the bank first became public, and now boasts five women on a 12-person board, including the first woman chair of a major U.S. financial company. Change may be in the offing for long-time board members at Wynn Resorts now, as Elaine Wynn, the casino company's largest shareholder, rallies investors to vote against cronies of her ex-husband Steve Wynn. In news you can use: Corporate Secretary weighs in with advice for preparing your company for the possibility of sexual harassment claims. The Wall Street Journal offers a terrific view into Southwest Airlines’ crisis management practices following last week’s deadly engine blowout. Finally, Strategy+Business suggests that if you sit on a board and are concerned about the CEO’s performance, don’t wait too long for “proof” that things aren't going well. Your willingness to appropriately address concerns early could be just what’s needed to avert disaster. Read on.

DIRECTOR'S DOMAIN: How's this for a refreshing idea: almost half of directors appointed to the boards of S&P 500 companies last year were novice board members, and of those, the majority were women or minority candidates! In other news, the data mismanagement scandal that led Facebook CEO Mark Zuckerberg to testify before Congress last week has become, this week, a rallying cry for institutional investors demanding governance changes at the social media giant. Several firms are speaking out about what they see as a need for greater board diversity and independence, a separation of the chair and CEO roles, a new risk oversight committee, and more. Meanwhile the sexual harassment scandal that led to the resignation of Steve Wynn as CEO of Wynn Resorts is responsible for ushering in a self-described “new era” at the casino company, which yesterday announced the appointment of three women to its male-dominated board. Even so, most boards are not talking about harassment, a recent poll finds, as directors believe it’s not a problem at their companies. It will be interesting to see if the increasing numbers of newly appointed women and minority candidates agree... Keep reading.

DIRECTOR'S DOMAIN: How to improve corporate governance? Not surprisingly (given the sway corporations have over economic, political, and environmental issues), this question is getting a lot of attention. Senator Tammy Baldwin suggests giving workers, who are directly affected by governance decisions, a say in who sits on the board, even as researchers study how machine learning could help companies build better boards. The MIT Sloan Management Review suggests that a modern board of directors must ensure not just that the company is pursuing its mission, but that it does so with concern for all stakeholders, not just those who have a financial interest in the company. And Venture Beat boasts a piece about the need for boards of AI companies to tackle ethics head on. These conversations are taking place amid the backdrop of data scandals, like those at Facebook and Equifax, as well as rising concerns about how humans will fare in a world of artificial intelligence. Much is at stake and yes, absolutely, this is an important question to be asking.

DIRECTOR'S DOMAIN: In light of massive personal data breaches at Facebook, some are asking if Mark Zuckerberg is the right person to oversee the social media giant. New York City comptroller Scott Stringer, with the city’s billion-dollar stake in Facebook as leverage, is calling for Zuckerberg to step down as chairman. Zuckerberg says that despite mounting troubles the board has not asked for his resignation. An opinion piece in the Wall Street Journal suggests that Facebook’s governance structure poses difficulties for directors who might challenge Zuckerberg's ability to lead or oversee the company. Down the road at Google, more than 3,000 employees have signed a letter protesting that company’s involvement with a Pentagon project that uses artificial intelligence to increase the accuracy of lethal drone strikes. Recently, former CEO and chairman Eric Schmidt suggested that his seat on a Pentagon advisory board will keep the country safer. Separately, a study shows that younger board members bring many of the same skills as their elder counterparts, and may pull ahead of the pack on strategy. Read on...

DIRECTOR'S DOMAIN: Another week, another disappointing board diversity statistic. Make that two: 1) Men outnumber women in leadership roles on all board committees by more than four to one. 2) The Federal Reserve Board's leadership is currently 80 percent male and 87 percent white. Meanwhile, the board of the Humane Society is under attack from some of its largest donors. Facebook directors face a shareholder suit accusing them of breach of fiduciary duty in the exposure of 50 million people’s personal data. Japan is rewriting its governance code. And a couple of business professors opine on why many CEOs are taking the lead as social activists. Also, if you are curious what its like to be in the room when BlackRock meets with board members to discuss policies affecting company culture and diversity, etc., you’ll find a pretty detailed list of the kinds of questions they ask below. Perhaps such conversations will eventually lead to some more encouraging diversity stats! Read more.

DIRECTOR'S DOMAIN: For the past five days, Facebook was top of the news following the revelation that lax protocols allowed the data of 50 million Facebook users to be illicitly shared with British data company Cambridge Analytics—news which caused the share price to plummet dramatically. Much was made of the fact that Chairman & CEO Mark Zuckerberg did not immediately address the situation publicly, though on Wednesday he offered an apology and laid out plans for shoring up the company's data privacy practices. Meanwhile, the Cambridge Analytica board immediately suspended its CEO after an undercover report showed him purportedly promoting unethical practices. In other news, CEO pay is now at its highest in history. Asset manager BlackRock is pushing boards to make progress on diversity, culture and compensation structure. New data shows that shareholder proposals now target environmental and social concerns more than governance issues. Some 82 percent of companies worldwide assign climate risk oversight to their boards. And more women are laying claim to the COO role. Read more.

DIRECTOR'S DOMAIN: It’s hardly news that CEO salaries have grown handsomely in recent years. Still, with new SEC rules requiring companies to explicitly state the difference between the chief executive and median worker salaries, outsize salaries are turning heads, as media outlets point fingers at company after company stating sizable pay differentials. Our first thought: Armed with all this data, it wouldn’t be surprising to see shareholders take aim at big pay packages. Indeed, Disney shareholders this week voted for the first time ever against a proposed pay plan for CEO Bob Iger. In other news, Goldman Sachs makes public its succession plan for the top job. The SEC charges Theranos CEO Elizabeth Holmes with committing massive fraud and separately charges a former Equifax executive with insider trading based on his early knowledge of the firm’s cyberbreach. The Wynn Resorts board is sued by the State of Oregon and two directors signal their departures. On another subject: For those curious about director liability in light of recent cases of corporate misconduct, we found timely insights in this post by two legal scholars at Berkeley Law. It is a synopsis of their paper, The Hidden Power of Compliance, which examines “four mega scandals: the General Motors ignition switch failure, the Washington Mutual collapse during the financial crisis, the security breach in Yahoo, and Wells Fargo’s fake accounts fiasco. While legal and compliance personnel are at the heart of the inquiry in all cases, their interaction with the board in each setting is different, changing the liability outcome.” Read on.

DIRECTOR'S DOMAIN: A governance guide for the #MeToo era: A group of pension funds that together manage more than $3.5 trillion in assets issues a report on sexual harassment and the risks it poses to corporations, with some fairly specific recommendations for boards and an extensive list of governance questions for investors to ask boards. Meanwhile, asset managers come under attack for rubber-stamping exorbitant CEO pay packages, even as the largest comp plan in history gets a nod of approval. The Nordstrom board rejects the family’s $8.4 billion bid to take the company private. And Broadcom’s proposed takeover of Qualcomm could be derailed by a U.S. government body concerned that a merger may negatively affect the country’s technological competitiveness and even its national security. Read on.

DIRECTOR'S DOMAIN: General Electric announced a radical board shakeup—more than half of its 18 directors will exit, three new directors will join, and the overall size will shrink to a more manageable 12-person board. Three of the four longest serving board members, all women, are out, leading to women occupying only 17% of the seats. Meanwhile, a report by Nordic bank Nordea suggests companies with more women leaders produce more stable returns. But in countries where quotas have ensured more women on boards, The Economist tells us, there has not been an increase in women executives. And as gender-pay-ratio disclosure becomes mandatory in the UK, Barclays shows how much less women earn, primarily because they are excluded from senior management roles. Plus, the New York Times reveals the details of how an all-woman leadership team failed to take over the Weinstein Co. Read more.

DIRECTOR'S DOMAIN: The fallout from alleged sexual misconduct rattles corporate America and increases pressure on boards again this week. Ford executive Raj Nair admits to inappropriate behavior and steps down. Guess Inc. cofounder and chairman Paul Marciano takes a leave amid allegations of sexual harassment. Thomas Schumacher, the leader of Disney’s theatrical division, whose production of “Frozen” opens on Broadway today is accused of lewd behavior. The board of Wynn Resorts announces that former CEO Steve Wynn is not eligible for a reported severance package of $330 million. And a lawsuit against the Weinstein Co. prompts the board to fire the COO and complicates a potential sale of the company that had promised to remake the board as a woman-only entity. These cases and the many others that have arisen in recent months have cost corporate America money, share price, employees, and reputations, and are leading boards to take very seriously their responsibility to prevent misconduct and ensure a safe workplace. Commenters suggest that while more diverse boards are one step in the right direction, seating women and people of color on boards, alone, cannot combat entrenched cultural issues. Instead, experts suggest a 5-step approach boards should take to ensure appropriate disincentives for bad behavior are in place. In other news, the CEO of Gap Inc is out after failing to boost profits. Slack builds its board, driving speculation it is preparing for an IPO. And activist investor Nelson Peltz takes his seat on the Proctor & Gamble board. Read more.

DIRECTOR'S DOMAIN: Will boards of directors save the world? If you think that question sounds far-fetched, the latest news out of the nation’s business schools might make you think again. A professor at Harvard Business School suggests that companies are adopting corporate social responsibility (CSR) policies more readily than ever before, in part because customers, shareholders, and employees recognize the need to address major issues like wealth inequality and climate change and are losing confidence that government will do so. Researchers at Northwestern's Kellogg School of Management studying companies whose executive comp plans include specific CSR benchmarks found that setting such targets led to significant progress on social and environmental goals and gains in long-term value. ISS, meanwhile, notes that shareholders are pressing more companies to disclose business risks related to climate change. In other news, Chipotle gets a new CEO; Xerox shareholders balk at Fuji deal; the board of the U.S. Hispanic Chamber of Commerce parts with its CEO amid allegations of improprieties; and a new report shows that women have made real gains in those C-suite roles that don't typically lead to the CEO job. Read on.

DIRECTOR'S DOMAIN: Let this sink in: “We simply expect much more of boards of directors than ever before.” So said incoming Federal Reserve Chairman Jerome Powell in August. This week, Powell and outgoing Fed Chair Janet Yellen underscored that message as the Fed announced it is restricting Wells Fargo from growing its business until it addresses its governance shortcomings. The regulators also unofficially but unambiguously forced out four directors who had been on the bank’s board as its multiple scandals unfolded. Former Treasury Secretary Lawrence Summers jumped right in to ask why the Fed didn’t name names—and made a case for the public shaming of board members who fail in their duty as watchdogs. Others echoed the sentiment, and commentators suggested the action against Wells Fargo’s board should be seen as a warning shot over the bow of all corporate boardrooms, especially banks. Critics took aim, too, at the Wynn Resorts board which some suggest was filled with cronies of CEO Steve Wynn and failed to provide adequate oversight; Wynn stepped down this week amid allegations of sexual harassment. Canadian active wear company Lululemon also lost its CEO to unnamed behavioral issues presumed to concern employee relations. And Sheryl Sandberg’s LeanIn.org finds that the spate of CEO dismissals in the #MeToo era is scaring some men from mentoring women colleagues, even as women contend with a narrower path than men to the C-suite and, as yet another study points out, the boardroom. Read on.

DIRECTOR'S DOMAIN: From hush money to zero tolerance... When it comes to boards addressing sexual harassment, time is moving at light speed. Less than four months since the Harvey Weinstein scandal broke and the #MeToo movement launched, the perceived responsibility of the board has been radically altered according to a Hastings Law professor and a Rutgers University historian. Quiet settlements to resolve accusations of sexual misconduct are now likely to be seen as a breach of board duty, they say, while firing without severance (after careful investigation) is becoming the new normal. So, where does that leave the Wynn Resorts board, accused of approving payments to settle sexual misconduct claims, overpaying the CEO, and other acts of poor governance? Now, facing investigations and potential lawsuits for alleged breach of fiduciary responsibility and failure to fulfill its duty of CEO oversight. Meanwhile, new studies show that women-led startups land only 2% of venture funding, and that women still lag men in startup hires. A more promising report shows that the most diverse companies are the most innovative—with diversity measured in terms of gender, race, age, and more. And that makes a nice segue for this news: Airbnb, like Facebook last week, is also welcoming former American Express CEO Kenneth Chenault to its board. With the addition of their first black director, the vacation rental company pledges that, next, it will add its first woman director. Read on.

DIRECTOR's DOMAIN: Pay for performance. The concept was stretched mightily this week by Tesla, which announced that CEO Elon Musk will either hit a series of wildly ambitious targets and be paid so handsomely some say he will become the richest man in the world, or he will not earn a dime for his efforts at the electric car maker. Pundits immediately labeled it a publicity stunt, analytical minds began parsing just what it would take to hit the end goal of $650 billion, and at least one commentator argues that the precise targets could persuade Musk to obsess over short-term results at certain junctures. Meanwhile, women CEOs are more likely to experience a different kind of targeting—finding themselves in the crosshairs of activist investors; a new study shows women CEOs are more likely to be on the receiving end of activist incursions than their male counterparts. In a different study, McKinsey updates its oft-quoted 2015 report and reaffirms that (racially and gender) diverse executive teams correlate with better financial results. And notably, Facebook adds its first non-white board member. Read on.

DIRECTOR'S DOMAIN: Note to Boards: Shareholders are looking for companies to make real strides on social and environmental issues. The CEO of investment management firm BlackRock wrote a letter to companies that his firm invests in, saying BlackRock expects them to show how they are contributing to society. Wells Fargo has set up a new advisory council, headed by its board chair, to hear from stakeholders about their environmental and social concerns. The Harvard Business Review suggests “the worlds of activism and impact investing are converging much more swiftly than most people realize — and this union holds enormous promise for those who wish to see the creation of capital markets that support sustainable economic development.” Meanwhile, another convergence—that of media and technology—is pushing Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey off the Disney board. In recognizing the conflicts with Disney's evolving business that these directors increasingly face, neither will stand for reelection in early March. Critics are calling on Disney to take the opportunity to diversify its predominantly white board. Separately, Britain’s requirement that companies report the gender pay gap has resulted in some disappointing statistics: Men out-earn women in all fields. Shareholders will raise their voices about that, no doubt. Read on.

DIRECTOR'S DOMAIN: No doubt about it, more is being asked of boards. Shareholders are pressing the Facebook board to initiate a risk committee to address concerns about “fake news” and social media addiction. Investors are demanding that the Apple board address issues surrounding alleged physical and mental harm the company’s products may do to children. Employees are winning more expensive class action suits against companies that don’t treat them fairly, which in turn will put more pressure on boards to oversee HR policies and workplace compliance issues. Plus, rapid changes in technology are requiring some board members to go all-out to stay on top of the latest innovations—in some cases traveling as far as China on board “field trips” designed to expand their tech knowledge. It’s a lot to manage, and yet these many make-or-break issues cannot squeeze strategy out of the board conversation. In fact, Harvard Business Review suggests a new era of breathtaking innovation will demand that corporations commit to bigger picture thinking and greater, long-term risk taking. We think the best way to handle the increased pressure is by devoting a little more time to preparing, so you can spend less time to reacting. To get started, see Boardspan's special report: “The 2018 Boardroom: 7 Issues That Shouldn’t Take You By Surprise.” Or Read on.

DIRECTOR'S DOMAIN: It may be a new year, but sweeping changes set in motion in 2017 will continue to shape boardroom dynamics. Among the trend stories worth noting: More corporate directors are being held personally responsible for their companies’ misdeeds. More CEOs are being fired, or not hired, by boards unwilling to overlook allegations of inappropriate behavior. More CEOs are concerned that cyberattacks and disruptive technologies pose real threats to their success. And more mergers than at any point in history means the playing field for all businesses are being redefined. Meanwhile, Netflix and Goldman Sachs were among the first to respond to the new tax code by making changes to executive compensation. Uber is adding six new board members. Erich Schmidt is stepping down as Alphabet’s executive chairman, while Tim Cook is stepping up as the first CEO (that we know of) whose board will not permit its CEO to fly commercial. And in the latest sexual harassment scandal, executives and board members of the Miss America Organization resigned after allegedly exchanging disparaging emails about contestants; several former Miss America winners will now join the board, including Gretchen Carlson, who received a $20 million settlement after accusing then-CEO of Fox News Roger Ailes of sexual harassment. Whew. Welcome to the new year! Read on.

DIRECTOR'S DOMAIN: As 2017 comes to a close, we look back at the prominent boardroom trends of the year to see where we’ve been and prepare for where we might be heading. It’s been a rollicking year for boards, with pressure building on all sides from activist investors, the media, institutional shareholders, and all who are concerned about sexual harassment in the workplace. We culled six prevailing topics from the year’s board news—all of which may be harbingers of the challenges we expect boards to see in 2018.

DIRECTOR'S DOMAIN: Amid frequent hacks, leaks, and other costly security breaches, boards are seen as increasingly responsible for ensuring companies are doing everything they can to address cybersecurity issues. They are also being asked to justify excessive executive pay packages. New reports show that the gender pay gap is widest at the top. The Exxon Mobil board is bowing to investor pressure and agreeing to publish data showing business risks associated with climate change. The Xerox board has come under attack by activist investor Carl Icahn, who suggests the company is headed for disaster and needs a quick turnabout. And new statistics show that the handful of large companies with women-majority boards tend to outperform their peers. Meanwhile, a thoughtful piece in the New York Times examines the Etsy board’s decision to oust its CEO earlier this year and asks whether the social idealism that was intrinsic to that company’s culture could ever be compatible with the mandates of public markets. Read on.

DIRECTOR'S DOMAIN: Harassment remains a bold news item for boards. Members of the Weinstein Co. board are named in a class action suit alleging that they covered up a pattern of sexual abuse by Harvey Weinstein. Venture capitalist Shervin Pishevar, cofounder of Sherpa Capital and also of Virgin Hyperloop One, steps down from various board and company roles amid allegations of harassment. An investment group urges the Amazon board to improve gender diversity among its senior management and to explain why former executive Roy Price was not fired for two years after sexual harassment reports were filed. And investment group Pax World Management suggests that when boards focus on gender diversity, equal pay, and fostering a culture that doesn’t tolerate harassment, their companies outperform those who don’t. Meanwhile, fat-cat boards beware: In the new year, shareholder services firm ISS says it will begin calling out board members who approve director pay packages that are out of step with rivals. Read on.

DIRECTOR'S DOMAIN: When sexual harassment scandals rocked private unicorn companies Uber and SoFi, sending their CEOs to the sidelines, people asked, “Where was the board?” A report from news site The Information tries to answer that question and suggests that the boards of some of the nation’s largest private companies have focused more on preserving insiders' power than on establishing governance standards. When fake-accounts and improper-sales scandals rocked Wells Fargo, sending its CEO into retirement, people also asked, “Where was the board?” The bank responded by refreshing much of the board, announcing this week that three more new directors will join in the new year. Meanwhile, a review of director pay shows a number of board members now earn more than a half million dollars annually for their service. And an article in Harvard Business Review suggests that many companies are not doing what they could to ensure a strong pipeline for the C-suite, which is having the dual effect of slowing the careers of top talent while forcing many to look outside the company for chief executives. Surely that’s a situation worth addressing. Read on.

DIRECTOR'S DOMAIN: Diversity is a hot topic this week: Money manager State Street reinforced its call for gender diversity in the boardroom, putting Canadian and Japanese companies on notice that it will vote against nominating committee chairs of any boards that do not have women directors. Apple, whose board has resisted pleas to create a diversity policy for hiring, released its diversity statistics, showing that its worldwide management team is 71 percent male. Meanwhile, studies show that hiring and promoting more women will reduce sexual harassment in the workplace more effectively than training programs and reporting systems designed to solve the problem. In other news: Uber’s board sets aside its differences to do a deal, estimated to be worth $10 billion, with Softbank. General Electric cuts six of its 18 board seats. Nelson Peltz may still get a seat on the Proctor & Gamble board. Venture capitalist Steve Jurvetson resigns from his firm and takes a leave of absence from the boards of Tesla and SpaceX as he faces allegations of sexual harassment. And Gretchen Morgenstern of the New York Times suggests that a judge’s decision to let a suit against Wells Fargo go forward is a not-so-subtle message to directors to take their responsibilities seriously, since being one of many bad decision makers is not a ticket to immunity. We will not publish Director's Domain next week. We hope you enjoy the Thanksgiving holiday. Read on.

DIRECTOR'S DOMAIN: Cultural upheaval. Every day new revelations arise concerning sexual misconduct, gender discrimination, lack of minority representation—and more often than not, boards find themselves at the center of the storm. NPR (National Public Radio) and Israeli media company Keshet have both been roiled by sexual harassment allegations. Palo Alto Networks’s reluctance to release diversity stats has prompted investigative journalists to dig in. Uber is being sued for alleged systemic bias against women in performance evaluations. Cultural expectations for organizations are shifting rapidly—and savvy boards are at the forefront. While directors can not guarantee that an executive (or employee) won’t make bad decisions, the tone they set—which questions they ask, which incentives they approve, which ideals they promote—definitely influences behavior. We encourage you to read and share the recommendations offered by Boardspan’s own board: “Harassment Not Tolerated: 6 Questions Every Board Should Ask.” Also, don't miss the Harvard Business Review piece on how to build a pipeline for more women CEOs. In the spirit of boards continuing to hone their skills, ADP wins the battle to keep activists off its board, with an important lesson—learn what directors can do to minimize distracting, expensive proxy battles. Read more.

DIRECTOR'S DOMAIN: Senators investigating Russian interference in the U.S. elections grilled the general counsels of Facebook, Google, and Twitter this week, while criticizing the companies for not sending their chief executives to discuss actions that may have had a sizable impact on voting in the last presidential election. Facebook CEO Mark Zuckerberg was instead paying a visit to China's Presdient Xi Jinping, along with Apple CEO Tim Cook and Blackstone Group CEO Stephen Schwarzman. Meanwhile Uber's former CEO Travis Kalanick presses for the continued control of several board seats--a point of friction that could jeopardize an investment of as much as $10 billion in the company. Samsung bolsters its highly profitable business with a new leadership structure. Also, this week brought a couple of great reads on leadership: The New York Times reports on the common qualities of CEOs and the Harvard Business Review reveals how to develop "a strategic executive voice." Enjoy! Read on.

DIRECTOR'S DOMAIN: Board news continues to be dominated by sexual harassment, with The Weinstein Company board facing a lawsuit for its alleged knowledge of and failure to stop Harvey Weinstein’s “repeated acts of sexual misconduct.” Noted venture capitalist Steve Jurvetson, who sits on the boards of Tesla and SpaceX among others, has also been accused of sexual harassment and is under investigation by his firm. Discouragingly, a recent survey reveals that few boards ever discuss the topic of sexual harassment nor feel that it is an issue they need to address. A report in Harvard Business Review suggests that few women are promoted into the C-suite (and therefore onto boards) not because they act differently than men or have fewer interactions with decision makers, as is often suggested, but simply because of gender bias. Meanwhile, one commentator suggests that though boards currently act as if business strategy is removed from issues like immigration, climate change, or how women are treated in the workplace—boards are increasingly feeling the pressure to address social concerns. For those who prefer to be proactive rather than reactive, we recommend having boardroom conversations that ensure you are doing what you can to protect everyone at your organization from sexual harassment and its consequences. Read on and see "In Case You Missed It" for specific ideas.

DIRECTOR'S DOMAIN: With the Weinstein Co. and 21st Century Fox boards facing scrutiny this week for allegations that their top executives routinely engaged in sexual harassment and abuse, it’s a good time to ask: What can the board do to detect and prevent workplace harassment? We have answers, thanks to a special post by the members of Boardspan’s own board of directors. (See below.) Meanwhile, Facebook promises it will soon add a person of color to its all-white board. A new report by PwC identifies six trends in the boardroom including an ongoing split in perceptions about diversity, with women directors more convinced than men of its value; the report also reveals that boards show less concern about climate change than do investors. Director pay is up 20 percent in the past five years. Read on, too, for stories about the State of California demanding more change on Wells Fargo’s board, and about the managing director of an investment fund being forced to step off several boards after espousing racist views in his newsletter.

DIRECTOR'S DOMAIN: With every corporate crisis comes the question: “Where was the board?” The words seemed to form on observers’ lips even as allegations of sexual harassment stretching back decades were made against Weinstein Company co-founder Harvey Weinstein. The film production company’s board members, all of whom are male and half of whom resigned following the reports, pleaded ignorance. At least one columnist is suggesting that boards—notably those of the Weinstein Company, Fox News, and Uber, all of which have suffered major damage as a result of alleged sexual harassment—have a responsibility to address sexual harassment as a governance issue. In other news, a judge ruled that directors at Wells Fargo can be held personally liable for the company's egregious sales abuses. Activist investor Nelson Peltz is challenging the results of a shareholder vote which Procter & Gamble says did not win him a board seat. But his firm, Trian, did land a seat at GE, where the CFO and two vice chairs announced their departures a week after former CEO Jeff Immelt vacated the chair's seat three months earlier than expected. And, as Harvard Business Review this week takes a look at how some CEOs are promoting more boardroom diversity, McKinsey & Company’s 2017 Women in the Workforce report shows women are not making strong gains anywhere in the corporate world and especially not in the C-suite, which is a frequent precursor to the boardroom. Read on.

DIRECTOR'S DOMAIN: Values are only valuable to the degree they are embraced. So, at a time when too many corporations are accused of failing to safeguard the best interests of their customers, employees, and shareholders, boards are increasingly looked upon to monitor a company’s commitment to their values. In the same week that the former CEO of Equifax and current CEO of Wells Fargo appeared before Congress following failures at each company to protect their customers, a blue-ribbon commission suggests that boards should formalize their role as monitors of company culture. This attention to values is perhaps all the more important in an era in which CEOs are speaking out more readily on political issues, and shareholders are increasingly holding companies accountable for enacting responsible social policies. Meanwhile, Uber, whose founding CEO was ousted over issues of company culture, saw its board grow by two last week, after former CEO Travis Kalanick filled two seats unbeknownst to other board members; this week, the board met and put new structures in place to limit his power, while agreeing to take on billions more in investment. Of note, GE’s Jeff Immelt has retired his chair seat earlier than expected and is free to pursue new opportunities. Read more.

DIRECTOR'S DOMAIN: Clearly, boards today face bigger challenges and more public attention than ever before. Just consider a few items from this week's news: At Equifax, the board not only said goodbye to its chairman and CEO Richard Smith and began a search for his replacement, but it is diving into an investigation of the data breach that exposed the personal information of 140 million or more people, as Congress conducts its own investigations. At Facebook, CEO Mark Zuckerberg and his board withdrew a class reclassification proposal in the face of a shareholder lawsuit and a Congressional inquiry into the company’s dissemination of “fake news;” the new classes of stock would have enabled Zuckerberg to maintain control of the social media behemoth while selling his shares. At Procter & Gamble - one of the many companies dealing with activist incursions - the fight to keep Nelson Peltz off the board has led the activist investor to launch a full-on persuasion campaign, with the former CEO and directors of Heinz, as well as shareholder advisory firm Glass Lewis, now pleading Peltz’s case in the media. On a positive note, Salesforce CEO Marc Benioff was recognized for his role in closing the gender pay gap at the company, at a cost of $6 million (and an undoubtedly huge savings in potential lawsuits and PR headaches had he not chosen to do so). In other news, a new report suggests that when sitting CEOs take on outside board appointments, they tend to be handsomely compensated and their own companies tend to perform well—but the companies on whose boards they sit do not always enjoy similar success. All of which would suggest that it's a good time for boards to apply some basic risk management principles to the board itself: Step back and consider whether you have the right people, processes, and priorities in place today to deal with whatever comes your way tomorrow. Get all the details.

DIRECTOR'S DOMAIN: The Equifax breach, which exposed millions of people’s personal data, has not only prompted federal investigations, but also soul-searching about what other companies should do to prevent similar disasters. Board and information security experts alike say its time to take a fresh look at the board’s role in monitoring cyber risks and to establish best practices for comprehensive security oversight. If you read the business ethics article from Harvard Business Review below, you will likely conclude that, regardless of how much formal responsibility directors have for cyber oversight, the health of every organization requires them to take it seriously and Do The Right Thing. In other news, it’s been a big week for board appointments, with new directors welcomed at Intel, Microsoft, eBay, Twitter, and Hampton Creek, among many others. What a good moment to read up on the new trend in mentoring: assigning novice directors a more experienced Board Buddy to guide them. Also, Procter & Gamble analyzes the long-term impact of Nelson Peltz’s tenure on corporate boards. The results are eye-opening. Read on.

DIRECTOR'S DOMAIN: Another week, another board facing the fall-out of a tech company’s alleged culture of sexual harassment. Times two. Media reports suggest that board members at Social Finance, a fintech startup valued at $4 billion, had been informed about accusations of sexual harassment and also of financial misrepresentations to investors long before CEO Mike Cagney offered to resign on Sunday. The New York Times presented a blunt assessment: “Companies like SoFi show how boards are incentivized to prioritize cash flow and growth over governance, said David F. Larcker, a professor at Stanford University’s Graduate School of Business who specializes in corporate governance.” Apparently a culture of sexism and workplace hostilities led the board to fire LiveOps CEO Keith Leimbach this week, as well. Both cases, which have a striking similarity to the summer's events at Uber, underscore the real costs to a company, its employees, and its investors when a company's culture takes a backseat to its growth. Melinda Gates offered up her opinion on sexism in tech this week, which we might summarize as: It’s good we’re finally talking about it, since that is the first step to changing it—and the place to start that change is with venture capital. Kudos to Gates for not just naming the problem, but working toward a solution! And, now might be a good time to have a look at the latest from the Boardspan Library: “Six Ways to Promote a Healthy Company Culture," which provides a roadmap for boards that want to assess company culture. If it wasn't obvious before, it's certainly crystal clear today that culture is an indicator of value and the board owes it to all constituents to make oversight of the company culture a priority. Read more.

DIRECTOR'S DOMAIN: Taking the long view: Investment firm Vanguard, with more than $4.4 trillion in assets under management, issued a letter to directors of public companies this week, pressing them to address governance issues like board diversity and the risks of climate change. The Vanguard letter underscores the firm’s belief that a company’s approach to board composition and climate risks both have an outsized impact on long-term value. Meanwhile, the Wells Fargo board comes under more pressure with the California Treasurer calling for the removal of one director and a banking industry group joining Senator Elizabeth Warren’s call for the whole board to be dissolved and reconstituted. Criticism rained down on the Uber board for leaking so many of its closed-door conversations to the media, while the Expedia board was lauded for its succession planning, after promoting an insider into the CEO role just days after its previous chief jumped to Uber. And a new KPMG report shows how boards are attempting to keep their companies one step ahead of policy changes, amid continued uncertainty about which policies the Trump administration will promote. Read on.

DIRECTOR'S DOMAIN: Uber continues to dominate the news: It names an unexpected candidate for CEO, signals it’s ready to talk about an IPO, and learns that it is under investigation by the Justice Department. The fight over board seats between two of its biggest shareholders is moved from court to arbitration. Plus, high-level scuttlebutt suggests that after Jeff Immelt withdrew his candidacy, the board was unwilling to meet Meg Whitman’s conditions for leading the company, and had but one choice left: incoming CEO Dara Khosrowshahi. At least one shareholder thinks the board itself could use a new leader and is advocating for an independent chair. Now that’s an idea! This might also be a good time to read the 14 Rules for Managing Your Board, (below). Meanwhile, Disney adds GM chief Mary Barra to its high-powered board. New studies show the impact of activist investors on board composition—Hint: Diversity is not top of their mind. And one commentator suggests that venture capitalists may sit on too many boards to provide the oversight and strategic thinking that could propel those companies to greater success. Interesting times!

DIRECTOR'S DOMAIN: Boardroom battles. They’re never good news and this week they continue to roil both ride-hailng company Uber and Indian IT firm Infosys, taking a toll on the market value of both companies. At Uber, the board’s composition and loyalties are being tested by lawsuits and unwelcome surprises, even as the company continues its search for a new CEO. Earlier in the week, the rumor mill had pegged GE chairman Jeff Immelt for the chief role at Uber, but by Wednesday the Wall Street Journal was reporting that Hewlett Packward Enterprise CEO Meg Whitman is back in the board's sights and that a decision is expected in the next two weeks. At Infosys, the board and founders have been locked in a months-long power struggle that prompted the CEO to resign last week, while shaving some $4.5 billion off the company’s value. Meanwhile, the boards of Chevron, Johnson Controls, and GoDaddy are preparing for CEO transitions, and paycheck processing firm ADP rebuffs activist investor Bill Ackman in his bid to reshape the board. Now seems an apt time to read "Conflicts In the Boardroom" (see below) and perhaps take to heart its advice to train board members in dealing with emotions and personalities, as well as governance and regulatory issues. Read more.

DIRECTOR'S DOMAIN: Politics landed in corporate boardrooms this week, with a thud. On Monday, Merck CEO Kenneth Frazier, after talks with board members, resigned from one of President Trump’s business advisory groups to “take a stand against intolerance and extremism.” The CEOs of Intel and Under Armour soon announced their resignations from the president's council on manufacturing, too, after the president blamed “many sides” for the white supremacist violence in Charlottesville, Virginia. A comment posted Tuesday night on a New York Times article about the resignations caught our eye: “I'd imagine there are plenty of emergency board meetings going on right now with the actors deciding what to do.” It does seem “Ed from Silicon Valley" was on to something: By midday Wednesday, several more CEOs had publicly departed the presidential council, as civil rights activists pressured others. Then the members of Trump’s Strategic and Policy Forum—a separate group of high-profile executives headed by Blackstone Group CEO Steven Schwarzman—disbanded rather than find its members pressured to decide, individually, whether to stand by the president. As commentators remark, the political tensions in the country mark a new challenge for corporate leadership…. Meanwhile, Uber's directors appears to be locked in a battle for control of the company, and are firing off lawsuits, accusatory letters, and, allegedly, attempts to oust fellow directors. Wells Fargo announced that three of its longest tenured directors, including its chairman, will step down—and Betsy Duke will become the first woman board chair of a major bank. Plus, a new study of CEO pay suggests that smart bets on technological innovation tend to pay off handsomely for executives. Read on.

DIRECTOR'S DOMAIN: Company culture. It’s a hot topic, as executives and pundits of all stripes weigh in on Google’s decision to fire an employee for posting a memo that questioned women’s inherent ability to be engineers. It’s also at the root of recent crises at Uber, whose CEO was fired after the company was accused of fostering chronic sexual harassment and discrimination, and at Wells Fargo, where experts say that a spate of scandals can no longer be written off as rogue behavior by one department or a few managers. When cultures cause crises, they become a problem for the board to address—and critics like to ask “Where was the board?” So, today we ask a more helpful question: "What can a director do to ensure a healthy culture is being nurtured?" Below are some answers, and here are a few hints: If you aren’t already, start evaluating the organization’s culture, character and values just as you would the financials. And get the right internal controls in place, including risk management and corporate governance, as well as executive compensation plans that favor good behavior. Then, you can carry on with the week’s news about activist investors, why directors leave boards, and how leaders can train themselves to be more agile thinkers. Read all about it.

DIRECTOR'S DOMAIN: There is one place that no board wants to find itself: At the center of the story. Nevertheless, a week after rumors flew fast and furious about the various CEO candidates approached by the Uber board (to replace a leadership mired in accusations of sexual harassment and discrimination), the board itself landed in the spotlight. Various reports suggest that infighting and power struggles have upended the recruiting process and, perhaps, knocked out of the running the women being considered. As if on cue, its competitor Lyft announced a powerful addition to its board -- former Obama administration senior advisor Valerie Jarrett joins as the company's first independent director.... Big news for champions of women in leadership: A new study shows that, yes, women-run companies (where women are either CEO or board chair) do indeed outperform the market. And in somewhat less encouraging news, results from a large survey suggest that many directors find their boards are not performing as well as they could, and face special difficulty in these areas: Trust, Regard for Other Directors, and Communication. To remedy the issue, experts suggest director assessments to pinpoint issues, followed by board education to address them. We concur! Click here for more of the latest board news.

DIRECTOR'S DOMAIN: Vote loudly and carry a big stick? That could be an adage of institutional investors lately, as more shareholders engage in board-level activism. State Street reported this week that it is making good on its promise to pressure boards to diversify—voting against the reelection of 400 boards that have no women directors. Massachusetts's $66 billion state pension fund voted against 69 percent of director elections this year, taking a stand against boards that don’t include women and people of color. And the International Brotherhood of Teamsters, which has been a longtime shareholder of drug distributor McKesson, was successful in rallying shareholders to vote against an executive pay plan, as a protest against the company’s alleged involvement in the opioid crisis. Perhaps not surprisingly, critics are calling for an end to voting rights for index funds and other so-called passive investors. Meanwhile, Hewlett Packard Enterprise CEO Meg Whitman steps off the HP board while rumors also circle that she’s under consideration for the role of chief executive at Uber. Google CEO Sundar Pichai steps onto the Alphabet board. And the Chicago Tribune has dug deep to help us understand the case of the mysteriously missing Hampton Creek board. All in all, a fascinating week for board watchers.

DIRECTOR'S DOMAIN: Board diversity stats remain dismal. Women hold less than 20% of board seats in the Fortune 1000. Nearly half the companies that went public last year did not have a single woman director. And, as reported last week, men are more likely than women to get a seat without prior board experience…. But the good news is that change is on the horizon! Powerful investment managers like BlackRock are using their clout to champion the idea that diverse boards make better business decisions—and using their votes to challenge boards that fail to diversify. And companies that know these benefits are starting to lead by example. Next-generation real estate brokerage Redfin, asserting that early-stage board composition can have an outsize influence on company culture, has rallied an influential group--including four venture firms and Boardspan to commit to greater diversity in early-stage startup boards. We are excited to be part of this movement to strengthen boards. Read below for the details of the #DiverseFromTheStart campaign and for this week's other board news: activist investor Nelson Peltz's friendly outreach to Proctor & Gamble, Tesla's new board members, Hampton Creek's vanishing directors, the new breed of "digital directors" and more.

DIRECTOR'S DOMAIN: Coming off a midweek holiday, board news is a bit thin this go-round with people away on vacation (or focused on politics).Yet, there are still dramas like the courtroom accusation that Martin Shkreli, when he was CEO of drug maker Retrophin, refused to obey his board’s directions and lied to its chairman. There is speculation about the Uber board’s search for a new CEO. And there are vocal shareholders questioning executive pay packages at Burberry. Nonetheless, this general lull in the action could be a boon to directors who take this time to dig into difficult issues, such as how to tackle risk oversight in light of increasingly prevalent cyberattacks. We feature two important stories on that theme this week: One suggests no business is immune from damage by hackers and that companies need to reconsider not just security but response to attacks. Another proposes that the entire Internet could be shutdown at some point and companies with a strong digital presence should plan now for such a possibility. Not exactly beach reading, but … taking cyber risk seriously could be just the thing to keep you relaxed all year round. Read all about it.

DIRECTOR'S DOMAIN: Do the right thing. That is the message institutional shareholders increasingly are sending to boards by voting against directors who are slow to embrace governance reforms like board diversity or corporate social responsibility. Not surprisingly, some of those “right things” are translating into positive company results: A new study shows that greater board independence, separation of CEO and Chair roles, and other governance shifts have an impact on the bottom line. Meanwhile, the insistence of activist investors to achieve better results faster is prompting boards to remove CEOs from large, established companies at a rapid clip. With these added pressures on boards, cybersecurity oversight seems to have taken a backseat in the boardroom—but at an average cost of $4 million per breach, can a board afford not to take it seriously? Do the right thing, indeed! Read all the week's news.

DIRECTOR'S DOMAIN: Another week, another firestorm thanks to a spectacular lack of decent behavior. Silicon Valley venture firm Binary Capital has been asked to exit the boards of several startups after six women came forward to accuse partner Justin Caldbeck (lead investor in GrubHub and TaskRabbit) of making inappropriate sexual advances. Knowing that a female CEO had him removed from her board years ago for unacceptable behavior makes the situation even more troubling. Meanwhile, Uber watchers accuse its board of looking the other way while the company’s leadership engaged in unethical and illegal behaviors: commentators say the board forced out CEO Travis Kalanick not because they cared about the company’s many alleged improprieties but because they worried about their investment value. And the allegations against Uber piled on with court documents claiming the board knew that the company was receiving stolen technology, and other sources reporting that Kalanick’s parting shot was to force Benchmark’s Bill Gurley off the board. Whew, that’s a lot of boardroom drama! To add insult to injury, another disappointing study was just released showing that men still have an easier time than women getting their first board seat. Now might be the time to take a deep breath and focus on how core values in the boardroom affect a company’s profitability, (see our featured article from the Boardspan Library). Executives and board members alike need to recognize that values will always have an impact. Act with integrity – or count on disaster. Read more.

DIRECTOR'S DOMAIN: Summer and the livin’ is BUSY. Especially for the Uber board, which had already begun a much-talked-about search for a COO and a CFO, and now, following a shareholder revolt that ousted founder Travis Kalanick, is looking for a CEO as well. Sounds daunting. Plus the Uber board must now onboard two new directors, (Wan Ling Martello’s appointment was announced last week and David Trujillo's seat at that table was revealed this week), while considering shareholder demands to add additional independent directors. Meanwhile, the latest research shows that “fewer than 30% of organizations are able to find the right C-suite leaders” and Harvard Business Review suggests that often the trouble stems from a bad cultural fit. That news only underscores the complexity facing Uber’s board, which must pull together an all-new executive team that can not only deliver on the promise of a high-valuation company, but simultaneously lead a cultural turnaround. In other news… the Fortune 500 has seen its percentage of women directors dip to 28 percent, the first downturn in nearly a decade. What to think? Well, there's probably never been a better time to read Redfin's article in the Boardspan Library: How to Triple the Number of Women Appointed to Boards in Three Years! (Linked below.) Click to read.

DIRECTOR'S DOMAIN: Leadership issues dominate the boardroom this week. First up, Uber: A seven-hour Sunday board meeting to discuss the results of former U.S. Attorney General Eric Holder’s investigation into the company’s culture and policies precipitated a leave of absence for the CEO, the exit of another senior executive, and the appointment of a second woman director. Then, at an Uber employee meeting where the news was announced on Tuesday, board member David Bonderman made an inappropriate comment about women in the boardroom that led to his resignation later in the day. Given that Holder’s recommendations include changes to the board and management structures, we expect more news from Uber in the weeks to come… Next came a handful of big CEO exits, with Marissa Mayer saying her goodbyes at Yahoo as the acquisition by Verizon was completed, Jeffrey Immelt announcing his retirement from GE sooner than many had expected, and Sheri McCoy reportedly leaving Avon amid pressure from an activist… It is a great time to give some thought to leadership—what it means, how to do it well, and whether the very nature of it is changing along with our changing world. See the Strategy+Business article below to consider a new view on the type of leadership most likely to make a difference today. Read on.

DIRECTOR'S DOMAIN: We hope you enjoyed the past couple of weeks of specialized content… and now back to our regularly scheduled program of scintillating board news: Shareholders are commanding a good deal of attention both in victories, such as requiring Exxon to report on the impact that climate change has on its business, and in failings, such as being unsuccessful in getting GM to move to two classes of stock or getting the Tesla board to accept annual elections. We note a trend of evolving investor interests, and our lead story highlights activist investors shifting focus beyond the board and straight to the C-suite. In addition, a Bloomberg columnist’s piece addresses hedge fund managers and other activist investors who claim to have the answers: How right are they? Thus, you may want to pay attention to our featured Boardspan Library story on how to ensure confidence in a CEO. And speaking of being active, both tennis champ Serena Williams and swimmer Michael Phelps picked up technology company board seats this week. Read on.

DIRECTOR'S DOMAIN: (SPECIAL EDITION) If you read last week’s Director’s Domain, you might have noticed a brief break in our regular programming…just to be provocative. As you think about the three essential responsibilities for boards – Strategy, Performance and Governance – you may be wondering how you put them in play in your boardroom. Our best advice sits in the Boardspan Library. We curate board-specific content from thought leaders such as Deloitte, KPMG, Strategy&, McKinsey, BCG, Harvard, Stanford, MIT, and scores of others. They’re yours for the taking. Sign up now for a free Boardspan account and you will not only have access to a wealth of relevant information, you can save articles to your own personal library and share them with colleagues. Here’s a head start with some of our favorite articles. Click to see more.

DIRECTOR'S DOMAIN: (SPECIAL EDITION) Today’s boards operate amid the pressures of ever-increasing business complexity, technological disruptions, fluid regulatory environments, shareholder activism, cybersecurity threats, and more. Through these choppy seas, a board is charged with keeping the ship pointed toward success in both the short and long term, while scouting risks and opportunities, steering the organization to respond appropriately. It’s a lot to navigate, and yet—that’s the job, mates! How, then, does one do it well? Not surprisingly, success in the boardroom begins with alignment around clarity of purpose. For a board to thrive, its members need to understand their mission and know exactly what is (and is not) in the board’s mandate. The three essential activities of all boards are Strategy, Performance, and Governance. While every productive board will, of course, interpret and enact these activities as they see fit, it helps to have a common understanding of the tasks themselves. Learn more...

DIRECTOR'S DOMAIN: Not if—but when… Cyber attacks, like last week’s global ransomware episode, are becoming common enough that no company can guarantee immunity. Increasingly, boards are held accountable and must ensure that policies and practices are in place to prevent egregious hacks. One CTO and Board Advisor makes the case for boards to not only educate themselves about “security hygiene” and cyber disaster planning, but also discuss with management the risks inherent in decisions like managing costs by deferring software upgrades. On a different matter of deferring decisions, with every year that passes, Disney CEO Robert Iger gets closer to retirement and the board seems to get farther from a succession plan. Also intriguing, major shareholders of Occidental Petroleum won a vote—against the board’s recommendation—to require the oil company to report on the business impacts of climate change. And more CEOs are being ousted for unethical behavior—why? This and more in today's newsletter.

DIRECTOR'S DOMAIN: What makes a board successful? Differing opinions on that topic are roiling boardrooms this week, as shareholders signal their displeasure with the board composition at many companies. Repercussions include mounting pressure to unseat the chairman of Canadian plane- and train-maker Bombardier and to reshape the board at shopping-mall operator Taubman Centers. The mere threat of shareholder activism prodded Whole Foods to announce it will replace half of its board this year, while Pandora announces a voluntarily board restructuring as it prepares itself for sale. Two Wells Fargo directors, who scored razor thin margins of support in last month’s re-election vote, also plan to step down, though only as a result of the bank’s age limits for board members. In the context of so much change, the question ‘What makes a board successful?’ deserves serious contemplation. You may want to look at the qualifications currently in vogue among large-company boards (see the Harvard Law School study immediately below) and consider the suggestions put forth by McKinsey in “Making Boards Work”, the culminating article in this week's newsletter.

DIRECTOR'S DOMAIN: Ousted. It seems to be the word of the week as the CEOs of Etsy, Molina Healthcare, and money manager AllianceBernstein were all asked by their boards to step down. In all three cases, falling revenues precipitated the ousters and at Etsy the board appears to have been responding to pressure by activist investors. The president of the conservative think tank Heritage Foundation, former senator Jim DeMint, was also giving his walking papers, along with some blame for shifting the foundation’s focus from the formulation of intellectual and academic political arguments to political activism. For boards and executives who don’t want to find themselves at such odds, there’s no time like the present to revisit an organization’s strategy, ensure that the board and chief executive are truly aligned, and that the CEO has the feedback he or she needs to course correct if necessary…. In other news, the boards of BlackRock and Urban Outfitters are both drawing criticism for the long tenure of some of their members. And Mylan disclosed that, even amid financial controversy, such as the drugmaker experienced in 2016, its chairman was one of the best paid. Read on.

DIRECTOR'S DOMAIN: What’s a CEO worth? Well, from the standpoint of company success, a lot. So it’s no wonder that directors devote serious time and energy to finding and retaining the right person for the top spot. Unfortunately, a new study suggests that boards are often not taking the right qualities into account when evaluating potential, or current, executives. (Suggested reading below: “What Boards Need to Know to Choose a Successful CEO.”) Regardless of how they are chosen—and sometimes even regardless of how successful they are—CEOs keep seeing their salaries race upward. Witness Yahoo CEO Marissa Mayer’s $200 million total take-home pay for five bumpy years and IBM CEO Gina Rommety’s new $50 million salary. The commentary on whether today’s CEOs are worth all that they’re paid makes for fascinating reading… And in other news: All the members of the beleaguered Wells Fargo board were re-elected, some by such a small number of shareholder votes that observers expect to see director turnover at the bank soon. Read more.

DIRECTOR'S DOMAIN: Today the board of 21st Century Fox is schedule to meet, and the Fox network’s long-time star and cash-cow Bill O’Reilly surely will be on the agenda. O’Reilly’s departure from the network was announced yesterday, following reports that the TV personality had been accused by at least five women of harassment, spurring advertisers to leave the show in droves. One can only speculate what the male dominated 13-person board conversations might be in the midst of this turmoil. On another gender (in)sensitive note, others are speculating whether Wells Fargo's board appropriately and fairly doled out the consequences to its top two executives in its recent scandal. And on the more optimistic side of gender conversations, the CEO and CTO of Redfin (the online real estate company) suggest in a new article in the Boardspan Library, that it may be easier—and more valuable—than many have imagined to get more women into the boardroom. Read on.

DIRECTOR'S DOMAIN: Tone at the top: Defining and demonstrating a company's values and culture is one of the most important responsibilities of the executive team and board of directors. So, when companies make major mistakes, as United Airlines did this week and as Wells Fargo did in recent years, customers, partners, shareholders and observers all swivel their heads toward the corner office and boardroom. One of the best commentaries on this comes from the Los Angeles Times, where columnist Michael Hiltzik suggests that if the leadership at United and Wells Fargo had created a culture of employee empowerment, they would not be fighting PR fires or paying fines for bad behavior. A Boardspan Library article from the Kellogg School of Management at Northwestern University points to research showing that companies whose employees perceive the firm to be ethical perform better financially. It makes sense that setting the right tone spares headaches and makes for greater success, but one hopes that boards and executives will promote values-based, ethical corporate cultures because it's just the right thing to do. Get all of the week's board news here.

DIRECTOR'S DOMAIN: Moving the dial. Slowly but surely, women are making their way onto larger company boards, yet as they do, some observers note that surprisingly few are in the influential chair seats for executive, compensation, strategy or audit committees. Meanwhile, board member Arianna Huffington is again in the spotlight for her outspoken support of Uber CEO Travis Kalanick and her attempts to resolve widespread claims of a sexist culture at the company. At Snap, Inc., however, the lone woman on the board is likely in the same situation as her male colleagues: pondering what leverage the board has in a case where the founders have retained 90 percent of voting rights in the now public company. And, given the ongoing concerns about cybersecurity in all facets of life, you may want to learn about some common myths that, if not debunked, could undermine your company's ability to protect itself. Read more.

DIRECTOR'S DOMAIN: When boards at the 100 largest companies in the U.S. set CEO pay last year, a few cut salaries, but many more increased executive pay, sending median salaries for some of the best paid people in the land up nearly 7 percent—to $11.5 million. Now institutional investors including CalPERS want to know how those salaries compare with what rank-and-file workers take home. The investors have sent a letter to the S.E.C. asking the Trump administration to push through an Obama administration rule that would require public companies to disclose the pay gap between CEOs and workers. And in other news: investment firm BlackRock, which manages more than $5 trillion in assets, is pressing for more board diversity of all kinds--expertise, experience gender, race, age. The firm will surely be interested in a study out this week showing that boards are heavily dominated by a single age group. Read more here.

DIRECTOR'S DOMAIN: Reporters and critics have a lot to say about an SEC disclosure made by Yahoo on Monday stating that CEO Marissa Mayer will leave with a golden parachute of $23 million, after failing in her bid to turn the company around. The noise is even louder around the revelation that her successor, current Yahoo director and former IAC chief executive Thomas McInerney, will be paid double Mayer's salary for what some consider a less-demanding job. Meanwhile, the chairman of the British supermarket chain Tesco suggested the days are numbered for white men on boards of directors—even as Boardspan CEO Abby Adlerman sheds light on why some male-dominated boards are reluctant to respond to calls to change their composition. Read more.

DIRECTOR'S DOMAIN: Women directors: Where are they? Financial services firm State Street wants to know. In an impressive display of shareholder activism, the world’s third largest investment firm with $2.47 trillion in assets is demanding that companies it invests in have at least one woman director. It promises a vote against the reelection of those board members responsible for nominating new members, should they fail to bring a woman on the board. Meanwhile the one female director at Uber, Arianna Huffington, is publicly defending CEO Travis Kalanick, as the company reels from a slew of scandals. And the institutional investors in Wells Fargo are considering withholding their votes from board members who might have moved faster to contain last year’s fake accounts scandal. Word to the wise: Shareholders are watching! Get all the news here.

DIRECTOR'S DOMAIN: “Culture starts at the top.” The adage, which applies to management and boards alike, is something the boards of Uber, Wells Fargo, and others are likely grappling with this week. Commentators are prodding Uber’s board to probe into allegations that the car-service company has fostered a culture of sexual harassment and to consider whether CEO Travis Kalanick, who was recently caught on video disparaging an Uber driver, is the right man to lead the $69 billion company. Wells Fargo’s board meanwhile slashed bonuses for the whole executive team to “reinforce accountability of the company's leadership” following last year’s sales scandal, in which more than 2 million fake accounts were created by employees trying to reach mandated quotas. Certainly allegations of widespread unethical and/or illegal behavior should prompt a board to hold executives accountable and to press for meaningful cultural change. Even better would be for boards to take a proactive stance regarding culture and accountability—and avoid the scandals all together! Some basic suggestions to help any board get in front of these issues: Commit to transparency; pursue rumors or complaints until the board is satisfied it knows the truth; refresh directors frequently enough to avoid cronyism and complacency; and regularly undertake assessments of both CEO and board. It wouldn't hurt to meditate on that old adage, either, and assure yourself that the board is setting the tone you want others to follow. Read on.

DIRECTOR'S DOMAIN: Big, bold shareholder activism. That’s what we’re talking about, as some of the nation’s most engaged shareholders disclose interests in major companies. Nelson Peltz targets P&G, with a $3.5 billion stake in the packaged goods firm. Carl Icahn steps in to ask for more changes at Bristol-Myers Squibb, which already this week bowed to demands from Jana Partners. Starboard Value takes a 6.6% stake in Tribune Media and signals its intent to shake things up. And that’s just the big players! One way to get ahead of this curve, and possibly forestall an outsider from making demands of your board, is to bring in more “activist directors” now. Most importantly, don’t let the drama swirling around shareholder activism keep your board from one of its most important and least understood tasks: Addressing cybersecurity threats. These are costly mistakes and the board should do all it can to avoid them. Read on.

DIRECTOR'S DOMAIN: Another week of intrigue in the boardroom: Snapchat clarifies the compensation of the only woman sitting on its board, suggesting that the company will, in fact, pay her more than the previously stated 10 percent of what her male colleagues make. Fortune 500 boards report that they have welcomed more black women to their ranks in recent years, but have not increased the percentage of black men sitting on those boards. And, as the Volkswagen board denies new allegations that its members were warned ahead of the U.S. government’s probe into the automaker’s falsified emissions tests, Germany amends its corporate governance code to require companies and their directors to conduct business ethically and take responsibility for their behavior. Read more here.

DIRECTOR'S DOMAIN: The year of activism? So far in 2017, American citizens have taken to the streets and corporate shareholders have taken up proxy fights with a vengeance. Autodesk, Buffalo Wild Wings, Perrigo, and Cognizant have all been in activist shareholders’ crosshairs this week. Mark Zuckerberg, too, is getting a little heat from shareholders looking for him to abdicate the chairman role at Facebook. Meanwhile, there is a lot of talk about a new report showing that, after initially driving hard to achieve greater diversity and bringing more women into the boardroom, the United States has fallen behind much of the developing world. Will we see would-be women directors taking to the streets? Unlikely. But we wouldn’t be surprised to see some creative form of board diversity “activism” on the horizon. Keep reading to get this week's news.

DIRECTOR'S DOMAIN: ExxonMobil adds an atmospheric scientist to its board? Yes, you read that right. Some critics are crying ‘too little too late,’ but the Union of Concerned Scientists gives the oil company a thumbs up for appointing a climate scientist as a director. Meanwhile, a new activist investor-defense group at Lazard is using big data to help companies spot potentially vocal shareholders before they raise their voices. And boards looking to help their CEOs succeed (and thereby give activists no grounds for complaining) are turning to a timeless tactic: More and better feedback! Read on for the whole story.

DIRECTOR'S DOMAIN: Wells Fargo is back in the news, with press reports alleging that early investigations into the bank’s cross-selling debacle were tainted: employees were apparently tipped off to internal inspections, giving them time to cover up illegal maneuvers before inspectors arrived. Also the bank now says it has found evidence that some employees who came forward to report the illegal activities were fired. Not a pretty picture. For some time now the culture at the bank and the role of the board in preempting bad behavior has been called into question. Today, Boardspan releases its own analysis of the responsibilities and challenges of board membership in this special report Leadership Matters: What Boards Can Learn from the Wells Fargo Calamity. Read it today!

DIRECTOR'S DOMAIN: Ch-ch-ch-ch-changes. On the eve of the presidential inauguration, the news is thick with reports about the new administration: Incoming Transportation Secretary Elaine Chao will apparently continue receiving substantial compensation from Wells Fargo related to her prior role as a director at the bank. General James Mattis has reportedly left his board seat at Theranos to prepare for his new role as Defense Secretary. And President-elect Donald Trump’s lack of board service is examined—would he have a better sense of conflict of interest if he had ever sat on a public company board? Meanwhile, boards across the country are looking at expected changes to the economy, regulations, and more and wondering what’s in store for them. To answer this question and more, we’ve just released Boardspan’s Guide to 2017: 8 Key Issues Boards Face This Year, which we link to below. Please have a read and pass it on to colleagues who would benefit from knowing what to expect in the boardroom. We look forward to keeping you up-to-date and ready for what 2017 holds, all year long.

DIRECTOR'S DOMAIN: We talk frequently about the increasing pressure boards feel, as everyone from regulators to shareholders holds directors accountable for a company’s actions. This week, we see that consumers, too, can take aim at boards for behaviors they don’t agree with. Witness the boycott called against L.L. Bean after one of its board members was reported to have contributed to the Trump campaign. There's not much directors can do about increased scrutiny, besides ensuring we act with integrity and consider decisions carefully, knowing they might be perceived differently by others. As Harvard Business Review suggests, we can all get better at identifying ethical decisions and perhaps seeing the potential consequences before we make a move. Meanwhile, Yahoo announced this week that many directors—including CEO Marissa Mayer— will be leaving the company’s board once the deal with Verizon closes. And a dispiriting new report shows that at many companies, “diverse directors,” i.e. women and people of color, are paid less than their white, male counterparts. Read on.

DIRECTOR'S DOMAIN: Happy New Year! Prognosticators have been busy chronicling what to expect in 2017. Their best guesses include more corporate scandals, more cyber attacks, and less regulation all around. One might also assume that individual directors will be appointed to fewer seats, as both ISS and Glass Lewis have placed new focus on the issue of directors “overboarding.” Meanwhile, some new board appointments have garnered attention, including former DuPont CEO Ellen Kullman’s election to the Goldman Sachs board, and the announcement that former Genetech CEO Ian Clark will begin serving on three biopharmaceutical company boards. There is also talk of a handful of young, female technology entrepreneurs becoming sought after as directors for larger company boards. While it's likely terrific for those invited and the boards they serve, we still have a long way to go before women are included as a rule, not an exception, given that only 20 percent of large company board seats are currently filled by women. Here’s wishing you a successful 2017! Let us know how Boardspan can help turn your board aspirations into reality this year. Read more.

It's a quiet time in the board room -- the lull before the storm of regulatory changes and strategy updates as organizations sort out what the new year and new players could bring? Two of this week's articles reflect opinions about what a Trump administration might mean for board rules and Dodd-Frank regulations. Another examines how those companies with directors likely to take part in the new administration are already faring well. Meanwhile, research shows that the number one skill that innovative CEOs have in common is their ability to manage risk. That seems like an important competency to hone in the year to come. See the piece from our archives, below, to learn more.

Transition time. Next year is shaping up to be one of big changes: Starbucks will try an unconventional CEO transition with Howard Schultz handing off the chief role to his number two, but staying on as chairman and in a new operational role. Theranos will remake its board with fewer politicians. Chipotle, too, looks likely to shake up its boardroom. Meanwhile, a new Stanford University survey of corporate boards reveals common issues today’s directors face, plus some suggestions for solving them. And this week’s newsletter is filled with good advice for your new year: How to plan a CEO transition; how to think about governance for subsidiaries of larger firms; and how to be a more effective leader. We hope you find it valuable.

Chief among a board's responsibilities, some say, is the hiring—and potential firing—of the CEO. We know there's a lot more to governance than that! But there's no doubt that having the right person in the top job is important. Harvard Business Review makes the case this week that there is a much a board can do to help a new CEO get up to speed and be effective in her role; after all, great coaching can turn a decent player into a stand out. And John Graham, a professor at Duke University's Fuqua School of Business, argues in the Wall Street Journal that even the stand-out players should be evaluated periodically; you need to know when they would benefit from more coaching or need to be cut from the team. And we've included a story from the archives about how to hire the right CEO when you need to. Our takeway? Yes, the board needs to be highly attuned not only to who is sitting in the CEO's seat, but whether and/or how it can help improve the quality of the CEO's performance. Sounds like a great topic to consider as you begin to size up the new year. Contact us if we can help: info@boardspan.com

When employees share their concerns or whistleblowers make noise, it doesn't hurt to listen. Yesterday, the Wall Street Journal published an intimate look into the experience of the man who apparently went public with his concerns that blood-testing company Theranos was fudging its research. The employee in question landed the job through his connection to Theranos director and former Secretary of State George Shultz, who happens to be the man's grandfather. (It's quite a read.) And this week several major shareholders said they are looking for changes to the Wells Fargo board in the wake of the false-accounts scandal that cost the company its CEO—a scandal that some say was first revealed to the board by whistleblowers five years ago. Meanwhile, a new study shows that the quotas some European countries have put in place to ensure gender diversity on boards has resulted not only in more female directors, but an overall positive experience for directors and more professionalism in the recruiting process. Enjoy this week's issue and ... have a Happy Thanksgiving! We won't publish next week, but will see you back here on December 1.

While the boardroom is fairly quiet this week, there are a few things that caught our attention. For starters, we look at how much directors are paying themselves—the median salary for directors of S&P 500 companies is about a quarter of a million dollars a year, with some earning into the millions, presumably for a job very well done. Next, we are back to Wells Fargo, which is hoping to avoid litigation by settling yet another accusation of wrongdoing—this time for overcharging mortgage holders for home appraisals the bank required of those who had defaulted on loans. Meanwhile, commentators offer some advice to the bank’s board about refreshing the company culture, even as a group of senators questions why KPMG, the bank’s long-time auditor, didn’t discover signs of malfeasance. We find some rich insights on how a board can help grow a sustainable business that activists will leave alone, as well as advice from one of the best-known activist investors, Nelson Peltz. And, since we can’t help but think that now is a great moment to step back and think about the board’s role in creating responsible corporate cultures, this week we highlight “Business Ethics Begin in the Boardroom” from the Boardspan Library. Read more.

Great expectations. We all have them for boards. Just count the ways critics suggest Wells Fargo’s board of directors could have done better: by acting when they first got wind of the scam; by limiting the CEO’s participation in outside boards; by fostering more turnover of board directors; by separating the role of CEO and chairman; by hiring an outsider as CEO… and so the list of failed expectations goes on. We also hoped for more from Facebook’s handling of its high-profile, Trump-supporting member—read the Wired piece below excoriating Mark Zuckerberg for suggesting that Peter Thiel’s board membership is a nod to diversity. It is hardly surprising to learn that board members themselves feel pressured by expectations—a new survey shows that 60 percent of global directors feel expectations are higher than what they can reasonably deliver. And activist investor Nelson Peltz, bemoaning the Information Age, says it’s harder to meet the expectations of being a good director when you’re inundated just before a board meeting with email and last-minute documents. So, what’s a director to do? Well, avoid complacency, get ahead of the issues affecting your board, stay informed, speak up, and use the best governance tools available to ensure that your board is as effective and efficient as possible. It may not be easy to meet today’s high expectations, but, surely, you don’t want to embrace the alternative. Read on

Boards under scrutiny: Even as former Wells Fargo CEO John Stumpf vacated his board seats at Target and Chevron in the wake of the “cross-selling” scandal that cost him his job, the California Department of Justice yesterday announced it is conducting a criminal investigation of Wells Fargo, seeking evidence of identity theft when the bank opened millions of accounts without customer’s permission. Critics suggest that 1) the board should have noticed the evidence of wrongdoing earlier; 2) it should have split the CEO and chair roles—pairing Stumpf with a strong overseer; and 3) at a minimum, it should have sent strong signals that it valued propriety above profits. Congresswoman Maxine Waters is now questioning whether the Wells Fargo board, even today, is supportive of real structural and cultural change since it appointed as its new CEO Tim Sloane, a 29-year Wells Fargo veteran. Meanwhile at Facebook, CEO and chair Mark Zuckerberg apparently received enough negative feedback that he felt obliged to defend much-maligned board member Peter Thiel after Thiel’s $1.25 million donation to the Trump campaign. Any board facing criticism might consider what it needs to do to ensure the public’s trust—one thing that no successful business can be without. Read on to learn the basics for building, or rebuilding, trust.

It’s a woolly week in the board room with Wells Fargo CEO John Stumpf stepping down amid scandal and calls for Stumpf to also step off the Target board, where he is a director. Heeding the criticism of Congress as well as shareholders, the Wells Fargo board takes this opportunity to split the chair and chief executive roles. One wonders if the Wells Fargo and Target boards would benefit from reading the article (from the Boardspan archives) on the board’s role in reputation management. It could be required reading, too, for those boards the Wall Street Journal discovers have "independent" directors who double as paid lobbyists. Meanwhile, the under-representation of women in the boardroom continues to spark fury in some corners, but a new PwC study suggests that a majority of male directors are just fine with the status quo, thank you very much. We link to the full report, which addresses not just gender, but issues like unprepared board members, the role of activist investors and more. Happy reading....

Lest you think that debates are for the politically minded only, one can only imagine what conversations are going on across many a boardroom this week. With Twitter’s board deciding its future – and it may not be entirely up to them – and Wells Fargo playing “whack-a-mole,” there’s some tough talk at the board table this week we surmise. Speaking of tough talk, see what the activist investors are voicing opinions about this week: woes at Samsung in one case and the need for more women in the boardroom in another case. You go, girl. And batting clean up this week, a broad range of views on compensation from top to bottom, from the US and the UK. With compensation season just ahead of us, we can’t resist the temptation to go deep into the archives and share an opinion that feels like it was written yesterday. Catch up on all the board news.

Shortly before this week’s newsletter arrives in your in-box, Wells Fargo CEO John Stumpf will appear before the House of Representatives Financial Services Committee, at a hearing entitled, “Holding Wall Street Accountable: Investigating Wells Fargo’s Opening of Unauthorized Customer Accounts.” It’s anyone’s guess what to expect, but already this week the Wells Fargo board, bowing to public pressure, clawed back $41 million of Stumpf’s pay and brought in outside investigators to determine who knew what when in the “massive scam” now roiling the bank, while the State of California suspended a key business relationship with Wells. We wonder what "the tone at the top" of Wells Fargo has been and include two articles about corporate culture in the Archives below, for your perusal. Meanwhile, the Twitter board seems to be shopping the company, the Lands’ End board has parted ways with its CEO, and tech giants Amazon, Facebook, Google, IBM, and Microsoft have come together to launch a non-profit Partnership on Artificial Intelligence to Benefit People and Society. The alliance's board is tasked with formulating best practices for a field potentially rife with moral and ethical issues, the resolution of which could affect us all. Read on

Culture clash. Led by the fiery prosecutorial instincts of Senator Elizabeth Warren (D-Mass), a former Harvard law professor, the Senate Banking Committee took Wells Fargo CEO John Stumpf to task this week for his accountability in the bank’s “cross-selling” strategy, which resulted in some 2 million false accounts being created in the names of Wells Fargo customers. Stumpf, in turn, leaned on his board, stating that it was not up to him as Chairman and CEO, but to the bank’s other directors to decide whether executives who oversaw the tainted division should be fired or financially rewarded for their service. (If you didn’t catch this real-life political drama as it unfolded in the Senate chambers, it’s worth watching.) Criticism of the Wells board is rolling in and it’s not hard to imagine there will be a lot more conversation about the board’s responsibility for protecting consumer and shareholder interests, as well as following through on the company’s stated mission of building a culture of accountability. For a thoughtful take on the significant role board culture plays in a corporation, be sure to read “The Anatomy of Board Culture” from our archives. And then, consider the news that GM now has as many women on its board as men—and hasn’t even tooted its own horn about this milestone. For the whole story, keep reading.

Lots of changes in the boardroom this week! From public radio organization NPR to meal-delivery service Munchery, and from new streaming video platform IndieFlix to the social justice minded W.K. Kellogg Foundation, organizations everywhere are adding new directors to their boards. Korean electronics company Samsung formally nominated to the board Lee Jae Yong, the son of its chairman—who is struggling with failing health—to aid the company as it faces one of its most dire challenges: a plummeting stock price brought on by a faulty battery nightmare in its newest smartphone. We are keeping an eye on two evolving stories: new pressure on Wells Fargo to split the Chair-CEO role and how to replace two departing board members at digital note-taking service Evernote. To add some context to all of this activity, we highlight an insightful story from the archives: "How Much Board Turnover is Best?" It draws upon data to suggest that "companies that replaced three or four directors over a three-year period outperformed their peers, suggesting an optimal amount of turnover." In other words, all of this change is likely to have a positive result! Read on...

Change is hard--especially when it's someone else's idea. But when it's clearly due, "resistance is futile" (we say, outing our inner Trekkie.) So goes the news in the boardroom this week: investors in Mylan and Chipotle are complaining, as they point fingers at the boards for the companies' shortcomings and demand changes in board composition. Meanwhile, the Twitter board is reportedly meeting today to discuss whether to pursue a buyer or some other remedy for the troubled social media company. Plus, American and United Continental Airlines have settled some kind of executive poaching/CEO succession planning skirmish, with a long-time American Airlines exec moving into a top slot at United Continental, and both companies aiming to spin the move as a victory. Exciting times for those boards, no doubt. Get up-to-date now.

How boards think and “feel” about issues makes a difference: The board of Mylan, critics say, should have demanded that the company curb its price increases to keep the EpiPen affordable—and to spare the firm the media bloodbath of recent days. Others are wondering if the board of the Tronc media company is wise to continue rebuffing the acquisitive advances of Gannett. And new research suggests that boards packed with industry experts may actually have a harder time making the best future-looking strategic decisions. This and the latest news on women in the boardroom, “undesirable” CEOs, and the Uber-Alphabet boardroom breakup in this week’s Director’s Domain.

The end of summer. And the end of a gripping season of board drama at Viacom, as CEO Philippe Dauman is forced out (with a widely criticized $72 million settlement package), while the Redstone family wins the privilege of a board makeover. Never fear… a new and fascinating board drama begins airing in its stead, as an activist investor (and Carl Icahn protégé) looks to replace the entire board of the Williams gas pipeline company, months after half the board resigned following a failure to oust the CEO. Follow these storylines, plus news on employee pay raises, the board’s role in managing cyber risks, and the preponderance of Republicans on boards in this week’s newsletter.

The latest news to get diversity advocates riled up? A study showing that companies with women in the CEO seat are more likely to be targeted by activist investors. The latest news to, perhaps, energize them? A report from the Wall Street Journal suggesting that some companies are aggressively recruiting female directors, sometimes narrowing the field to just women candidates. For a pragmatic discussion about diversity—why it matters and how your board might reasonably achieve it—take a look at the Conference Board article, “How Much Difference Does ‘Difference’ Make.” Get it all in this week's Director's Domain.

Establishing appropriate executive pay is a pain point for a lot of boards: What’s the right package? What’s the right process for determining it? Some of the biggest names in tech are now “disrupting” the common practice of linking pay to performance, potentially opening the door to a new era of compensation practices. Meanwhile, a Texas A&M study questions whether boards can be effective monitors of executive performance. And, speaking of effectiveness, you might improve yours by better understanding your leadership style. Read all about it in this week’s issue.

Disappointed. How else to feel when reading that the latest research reveals that women and minority corporate directors make less than their fellow directors serving on the same boards? Rather than letting discouragement set in, though, why not focus on what you can do to make a difference? You might start by reading MIT Sloan Management Review’s ideas for promoting greater diversity in the boardroom. Meanwhile, critics of the “Commonsense Principles of Corporate Governance,” (issued last week by a group of prominent corporate leaders), say the guidelines need to go farther to ensure that non-executive directors have a larger role in engaging shareholders, that boards take seriously their responsibility for enterprise risk management, and that director tenure and age limits become commonplace. Catch up on the details.

How common is common sense? This week, the governance narrative turns to a discussion that should not be very contentious; however when the definitions of “common” and “sense” are in the eye of the beholder, controversy abounds. Are VC’s paying enough attention, are government leaders paying too much attention, are corporate board members paying the right level of attention? All that, and a board paying its CEO to create the right “tone at the top” while another board fires its CEO for missing the numbers. Lots of opinions this week: from Sacramento to Washington, New York to London, Philadelphia to Stockholm. So we ask, where is the common in common sense? Read more here.

Board politics. While power moves within the board room are hardly novel, the phrase is taking on new meaning as politicians, including Hillary Clinton, Donald Trump, and Britain's Theresa May weigh in on governance issues like board composition and executive compensation. Meanwhile, Facebook finds itself, again, defending the rights of its provocative director Peter Thiel to take actions that don't represent the views of the board, this time as he takes the stage at the Republican National Convention in support of Trump... If this campaign season is giving you—and your CEO—a little agita, you may want to read on to understand how anxiety impacts a CEO's decision making and learn how the board might work with an anxious executive to ensure the best outcomes. Read more here.

Tumultuous times: Nearly half the directors at pipeline giant Williams Co. resign when a move to oust the CEO is blocked. The entire board of digital privacy nonprofit The Tor Project is refreshed by its new executive director, whose predecessor resigned amid accusations of sexual abuse. The $12 billion Hersey Trust sees its third trustee resign as the Trust confronts demands for governance reform from Pennsylvania’s Attorney General. The all-volunteer board of the defunct nonprofit Architecture for Humanity faces a $3 million lawsuit for financial mismanagement. And not surprisingly, the implosion of blood-testing company Theranos inspires new levels of scrutiny of the sometimes lax governance practices of Silicon Valley’s venture capital-fueled startups. It sounds like time to focus on doing what's right—see below for "Integrity is Free"—and to take note of the bright spots, including the increasing diversity on prominent boards such as Intel, Accenture, GoPro, and …Boardspan! Read all about it.

Silicon Valley dominates this week’s board news: With the retirement last week of Nike founder and chairman Phil Knight, Apple CEO Tim Cook steps up as lead independent director of the Nike board—and critics immediately begin asking if Apple can afford for its leader to have any competing priorities. Yahoo CEO Marissa Mayer also hears from nay-sayers, with more than 100 million shareholder votes against her re-election to the company’s board last week. And Twitter announces its latest addition to the board is former Facebook CTO Bret Taylor. Meanwhile, the story of how Google board member Diane Greene became an executive at the company makes for a good read. Check it out here.

Sensational times in the boardroom. Volkwagen's board is accused of knowing more than previously believed about "Dieselgate." The Viacom board has been pretty well deconstructed and remade in just one week's time, with continuing repercussions. And Lululemon's board has been rumored to have a "ghost" in its midst. Meanwhile, Tom Monahan, the CEO of CEB, argues in Harvard Business Review that boards, in their necessary effort to mitigate risk, might miss out on some opportunities to add strategic value—and he has some suggestions for doing better, including being a bit more daring. Read all about it here—then guarantee yourself a bump in popularity by sharing Director's Domain with a friend or colleague.

Long-standing issues dominate the thoughtful discussion taking place in the boardroom this week: Despite much-publicized goals and efforts to increase the percentage of women directors, the numbers aren’t moving, according to the latest Catalyst report (via Bloomberg). The debate continues on board tenure—is familiarity with the business more valuable than fresh insight and lack of cronyism? A new study from NYU’s Stern School of Business suggests long terms are not likely to be better. And Boardspan CEO Abby Adlerman suggests a simple model for Boards to best collaborate with Management. Read on

An activist board?! The business press is brimming with tales of activist investors reshaping companies to be more profitable, and also with advice columns pushing boards to be more strategic. But it’s rare to find stories that shed light on just how a strategy-focused board can reshape a company. This week’s Bloomberg Business article about the Microsoft board offers a rare glimpse of an experienced group of directors pushing a company to make strategic and life-assuring changes. Facebook’s board, meanwhile, shows it is serious about succession planning. And a new study shows that a "nice CEO" may not be the one you want. Read on

Interesting behavior abounds. There are calls for Paypal founder and Facebook director Peter Thiel to resign from the board of the social media giant; Facebook is becoming a powerful media player and is a business partner of Gawker Media, the gossip site Thiel is purportedly trying to sue out of existence. The Viacom board is fighting against the presumed wishes of its largest shareholder and former chief, Sumner Redstone, in an intensifying battle for control of the media empire. The former chief of Valeant Pharmaceuticals, who stepped down amid a massive scandal that cost the company billions, gets a $9 million severance package, while the Theranos founder whose company is under federal investigation for various alleged infractions sees her presumed wealth in the company plummet to zero. And Uber offers up a board seat to its newest investor: a Saudi fund that has made the largest-ever investment by a single investor in a private company: $3.5 billion! For all the news and some fascinating stories on corruption-promoting cultures, CEO pay, and women directors, read on!

Power plays. Exxon Mobil shareholders demand greater influence over the company’s climate change policies and win a vote to allow minority shareholders to nominate board candidates—eco-director to come?… Viacom is roiled, as 92-year-old chairman emeritus Sumner Redstone strips his long-time protégé and CEO Philippe Dauman of his seat on the family trust that will ultimately control the company… The Google/Alphabet board is accused of supporting the company’s alleged use of Android as a “Trojan Horse” to advance anti-competitive practices for other services the company offers... With so many throwing their weight around the boardroom, you would be forgiven for missing the news of a host of interesting board appointments in our Seat at the Table department. It's a packed list this week. Read on

Stepping up to the challenge. The remaking of the Twitter board, which has been on CEO Jack Dorsey’s to-do list since he rejoined the company last year, is happening. This week, saw the introduction of a fourth new director: BET CEO and chair Debra Lee, now Twitter’s first African-American board member, not to mention a media-savvy CEO and former general counsel — a welcome addition to a board that has been faulted for leaning too male and too white. Still, there is much more that can be done to increase boardroom diversity, as this week’s news, once again, points out. Read on

Executives behaving badly. Unfortunately, it’s nothing new, but it can have a devastating effect on a company and put a board under unenviable scrutiny. A new Stanford Business School report, “Scoundrels in the C-suite,” notes that “media coverage of CEO misconduct is significant,” with some incidents garnering hundreds of mentions in the press—and lots of pressure on boards to make things right and to explain how “this” could have happened on their watch. For a timely example, look no further than this week’s news that the high-profile board of the LendingClub fired its CEO after an internal review showed that the firm had sold $22 million in loans to an investor without the loans meeting that investor’s requirements. The media coverage has been fast and furious, with some commentators suggesting that the board acted appropriately by taking immediate action and others suggesting that if the board had done a proper job of monitoring the company, this never would have happened. Right on cue, a Harvard Business Review article argues that we put too much stock in boards’ abilities to oversee complex companies and that “monitoring” is actually an unrealistic expectation. Lots of big ideas to chew on this week! Read on

A relatively quiet week in the boardroom gives directors a chance to focus on some of the more important, if less urgent, matters that must be attended to. Supporting management in creating and sticking to a long-term strategic vision is paramount for a board to prevent “short-termism” from derailing more productive initiatives, notes Forbes. Setting expectations for good corporate behavior is a value-enhancing virtue — not just an item on the compliance checklist — that gives companies an edge in managing risk, suggests Harvard Business Review. HBR also encourages celebrating a team's resilience by taking the unusual step of publicly acknowledging an organization’s failures, not just its victories. And as long as we’re reflecting on best practices for success, don't miss the Boardspan Blog post from our archives featuring CEO Abby Adlerman’s advice for getting yourself on a board. Read on

Shape shifting. It’s nothing new to find hedge funds using their investment muscle to reshape boards and thereby companies, but Starboard Value is really showing us how it’s done: just yesterday the fund picked up four seats on the Yahoo board and more at chipmaker Marvell Technologies. Meanwhile, the $300 billion pension fund CalPERS is using its substantial might to ensure that corporations are taking climate change seriously by requiring companies it invests in to appoint directors with expertise in climate change risk management strategies. Though public scrutiny has already shifted the board structure of beleaguered blood-testing company Theranos, onlookers are now trying to dissect just how the $9 billion company, and its board, got into such hot water. And in an effort to up its EQ, ride-sharing unicorn Uber welcomes the first woman to its board: online media powerhouse Arianna Huffington. All this and much more in this week’s Director’s Domain. Read on

Once upon a time, boardrooms had a reputation for being cloaked in secrecy. No more. These days a lot of interested parties are paying a good deal of attention to boards and placing high expectations on them to maximize shareholder value, diversify their ranks and more. This week federal agencies are putting pressure on the boards of eight of the country’s biggest banks to get their “playbooks” in order and show their preparedness for responding to potential crises. Investors are turning up the heat on Berkshire Hathway, Coca-Cola and other companies with long-tenured board members to turn over some seats and refresh their boards. Another batch of investors has pushed United to reshape its board and is pressing Yahoo to speed its movement toward a sale. Meanwhile, the insistence on change that is being felt in the boardroom is not sweeping the C-suite in the same manner: the percentage of new women CEOs named in 2015 was the lowest in years. Read on

Clearly spring, the season of renewal, is upon us. This week, Twitter and McDonald’s took it upon themselves to drive major changes in their boardrooms, while Chipotle, United Continental and Depomed got an earful from activist investors demanding large-scale director turnover. But the big news is at Theranos, which earlier in the week announced an illustrious new medical advisory board, but is now smack in the middle of a crisis that no advisory or governing board can help with: The possible closure of its labs and banning of its founder to work in the field. The Wall Street Journal reports that federal health regulators are threatening to revoke the company’s licenses and ban CEO Elizabeth Holmes from the blood-testing business for two years, after that the company allegedly failed to address major problems in its testing facilities. Read on

Best laid plans… Disney’s once-celebrated succession planning comes unraveled this week, as the presumed heir to the executive suite prepares to high-tail it out of the Magic Kingdom. As the board rethinks its approach to CEO Robert Iger's retirement (scheduled for 2018), onlookers are engaging in wild speculation about who might fill the top spot and in some serious reflection on the cost companies pay for failing to adequately plan for succession. Across the pond, British firms find the mandate to put women on boards is creating a new wrinkle: fewer women in operating roles. And Valeant Pharmaceuticals offers an unfortunate lesson in what really happens when you reward CEOs for high share prices. —It's a great week for observing the very real impact boards of directors can have on the organizations they serve. Read on

The pressure is on. Of course, if you're an executive or director at Yahoo, you've been feeling it for some time. Still, the call late last week to replace the entire board seems to have upped the intensity and prompted directors to move more quickly toward a possible sale of the company. For an educated guess about how Yahoo’s high-stakes battle with activist investor Starboard Value might turn out, check out the Quartz piece detailing Starboard’s previous campaigns and their results. Avon and American Apparel are also going through big board changes, and new questions arise about whether the presence of women directors has a measurable impact on performance. On a softer note, a nonprofit serving the homeless rewards the efforts of a very young man to make a difference in the lives of the poor ... with a board seat. Read on

Entering Bizarro World: Valeant Pharmaceuticals, reeling for months amid accusations of financial misconduct, this week loses its CEO, gains a new director in activist investor Bill Ackman, and finds that its former CFO, who has been implicated in its troubles, refuses to leave the board. Meanwhile a board-approved comp plan requiring officers to maintain large stock holdings has cost current Valeant CFO more than $4 million. At United Airlines, activists continue to wage a proxy battle for six board seats, even as the stock price soars. And, in news that seems a good deal saner, Salesforce carries on building a powerful board with the addition of a prominent former European tech regulator. Read on

Great judgment. It's a requirement for any decent board member, but all the more so for directors of companies engaged in battles with activist investors—especially as the battles seem to be growing in ferocity. Yahoo’s board appointed two new members in a gesture that was widely interpreted as an affront to vocal investors allegedly hoping to oust chief executive Marissa Mayer, while Viacom re-elected its entire slate of directors, despite investors’ calls for a leadership change. Meanwhile, Harvard Business Review suggests that CEO resistance to activists may have more to do with self-preservation than company performance. In other news, Germany and Japan are both struggling to fulfill their aims of bringing more women into the boardroom. Read on

What makes a great board? It depends who you ask. Studies show that companies with women directors tend to perform better, nonetheless Carl Icahn and fellow activists apparently prefer loyalty to diversity in the boardroom. Harvard Business Review suggests that the ability to openly address conflicts is essential, while Knowledge@Wharton highlights the importance of ethics. Closer to home, Boardspan's CEO Abby Adlerman shares that strategic thinking, governance know how and cultural compatibility are among the attributes of an outstanding board. All of this and more is surely under consideration at United Continental Holdings, the latest large company board to find itself under siege. Read on

Powerful people are in demand. Alphabet executive chair and former Google CEO Eric Schmidt will surely seek them to fill the new advisory board on tech innovation that he heads for the Pentagon. Blythe Masters’ new financial services startup, Digital Asset Holdings, is bringing them on board with appointments like former Bank of America exec Sallie Krawcheck. Activist investors are increasingly filling boards like Angie’s List with them, too. Harvard Business Review, however, strikes a cautionary note about bringing too many leaders together to serve a common cause: Powerful people, who are extremely successful when reigning solo, don’t always work so well together -- perhaps something to consider when you are aiming to compose a truly effective board. Read on

It’s all about the almighty dollar. Or at least much of this week’s board news is: Director pay at large public companies has risen 10% over the past three years, with a number of board members receiving well over half a million dollars for what the Wall Street Journal calls a part-time job. Executive pay has risen faster still and researchers suggest one reason could be board member ignorance about the mechanics of stock grants. (Really?) Other researchers provide evidence that “pay for performance” doesn’t actually provide the desired results and argue that a fixed CEO salary is the way to go. And weighing in from the Boardspan archives, Kellogg Insight offers the voice of yet another researcher, who makes the case that a hefty load of options can alter a CEO’s performance —and not always in good ways. Our conclusion? It’s never a bad idea to review your director and exec comp structure. Read on

They are active all right. Activist investors are seemingly everywhere: reshaping the board of insurer AIG, demanding changes in the corner office and boardroom of media giant Viacom, even looking for some action in the UK at luxury automaker Rolls-Royce. A writer for Harvard Business Review makes the case that the presence of activist investors often leads to better company performance. If, however, you would prefer to avoid such interference, you’ll find some expert advice here as well. Hint: It’s not just lagging stock prices that catch the attention of activists--a board that fails to adopt best practices, like diversity among its directors, is more vulnerable to outsiders wanting to have their say. Read on

Oh, Silicon Valley and its penchant for pushing limits. Jack Dorsey, already managing dual CEO roles at Twitter and Square, is looking to be re-elected to the Disney board—begging the question: Will stakeholders at all three companies be well served by such a plan? Marc Andreesen, the venture capitalist and Facebook director, shares his personal opinions about the Indian government's decision to block Facebook’s latest business move, then finds himself redacting an inflammatory Tweet. And Zenefits jumps into crisis management after its CEO departs amid allegations that an excessive focus on new business caused it to lose site of regulatory requirements for insurance sales. The company's response to right the wrongs include promoting its COO into the chief executive role and adding three high-profile board members: PayPal cofounder Peter Thiel, Valor Equity Partners founder Antonio Gracias, and TPG Growth founder Bill McGlashan. What a week! Read on

In through the out door? While this week saw the departure of several high-profile board members from unsettling situations—including Charles Schwab from the Yahoo board as the company grapples with an uncertain future, and executive chairman Sumner Redstone from the CBS board after a lawsuit alleged that the nonagenarian was mentally incompetent—it also brought at least one unlikely appointment: Famed attorney David Boies, (the man who represented Al Gore in the disputed 2008 presidential election), has taken on the dual role of litigator and director at the beleaguered blood-testing startup Theranos. The New York Times ponders the wisdom here, asking if it is possible to simultaneously protect shareholder interests as a director and management interests as a lawyer. Read on

All eyes are on the boardroom. From activist investors wanting access, as United Airlines is hearing about this week, to the SEC wanting to know the diversity profile of public company boards, the board is under more pressure than ever to open its clubby doors to greater visibility as well as to a whole new breed of director. Right on cue, this week’s newsletter comes with helpful advice for dealing with all this attention, including pointers for cultivating independence and trust, for creating a “mindful board,” and for boosting performance by increasing gender diversity and improving recruiting practices. And here’s a little layman’s advice: Apply that mindfulness to compensation guidelines and avoid the fate of Facebook, which this week settled a suit against it alleging that it substantially overpaid its directors, by some 43% above industry peers. Read on

People power. Nothing could be more important to a company’s success than those who lead and advise them, and this week’s news is all about finding the right mix of players. From a critique of Valeant’s CFO-heavy board to an Apple shareholder’s proposal to recruit more people of color into senior executive and director roles, board composition is a hot topic. And shareholders are quickly gaining more say in that composition: Some 21 percent of S&P 500 companies now embrace proxy access—up from just 1 percent in 2014. Meanwhile, a tough retail season is playing out in the boardroom, where both Kohl’s and Macy’s face potential activist-investor action. Read on

Vrooom. The new year is off to a quick start with General Motors CEO Mary Barra becoming the first woman to chair the board of a major automaker and critics bemoaning any CEO’s unfettered access to the driver’s seat. Others see the move as a victory for women in the boardroom, at a time when the U.S. government estimates it will be,—wait for it—four more decades before the male-dominated boardroom gives way to a 50-50 gender split. Meanwhile, the next appointment on many a board may be a cybersecurity expert if a bill proposed by two US senators passes, requiring corporate boards to disclose whether or not their ranks include a cybersecurity expert (to mitigate the risks of being hacked), and if not why not. Read on

Boards are flexing their muscles this week as they push back on activist investors whose “good ideas” don’t look all that great to insiders. Directors at Dow Chemical made a public show of their unanimous support for CEO Andrew Liveris and an announced Dow-DuPont merger, thwarting efforts by Daniel Loeb’s Third Point LLC to derail the deal and dethrone the executive. The Qualcomm board followed suit, announcing that—after appointing a special committee to review the company’s structure—it opposed the proposal of an activist hedge fund investor to split the company into two business units. One imagines that these CEO-supporting victories are music to the ears of Irene Rosenfeld, chief executive of Mondelez International, who estimates she spends 25% of her time addressing activists. Read on

What did Jack Dorsey, Robert Iger, Sheryl Sandberg and other Disney board members know about alleged wage-fixing in the animation industry? The board now faces a lawsuit claiming it unjustly enriched itself by signing off on SEC documents that did not spell out these concerns. (No wonder the D&O insurance market is $7 billion.) Meanwhile, the Yahoo board confirms it is unraveling its plan to spin off its stake in Alibaba and is instead splitting off the Internet pioneer’s core business interests into a separate company. And news of a potential Dow-DuPont merger has board critics talking. Read on

Fresh off the holiday weekend, Viacom’s board members appear to be wrestling with more allegations that 92-year-old executive chairman Sumner Redstone has become unfit to govern the global media company. It’s a directors' dilemma: Does a chairman’s right to privacy trump a shareholder’s right to know about health issues? Notably worth asking: Would this question burn so hot if Viacom made public its succession plan? …. Meanwhile, there are rumors that the Yahoo board is wrestling with issues of its own, namely whether to sell off key parts of the business and/or give Marissa Mayer the boot. Former Twitter CEO Dick Costolo is picking up new board seats. And, yes, activist investors and even billionaires lose some of the time. Read on

CalPERS, one of the world's largest public pension funds with $293 billion in assets, is throwing its weight behind change. Calling for a major boardroom makeover, the behemoth investor is asking the most common face in the boardroom—the older white man—to step aside and make way for people of color and women. Meanwhile, the biotech industry, one of Wall Street's liveliest darlings, is learning the hard way that better corporate governance is essential to good performance. In the Hot Seat this week is that old buzzword "Sustainability", as investors join environmentalists in asking: What did the Exxon board know about climate change research and could a greater emphasis on sustainability in the boardroom have reduced risk for the company (and the planet)? Read on

If you’ve been following the fate of Valeant Pharmaceuticals, you’ll know that the stock continues to plummet (from $263 in August to $86 now) as the company fights allegations of inflating its revenues. With yesterday’s news that the company now faces insider trading charges from the failed Allergan deal, last week’s $100 million margin call on the CEO, and last month’s resignations of two independent directors from one of the company’s long-term investors, we imagine that the board will be in the Hot Seat soon. Also on our watch screen: expected Twitter board changes and a potentially smoother path forward for DuPont. And for all of you directors who worry about corporate hacking, you’ve got reason to do so – and reason to read below. All this and much more in this week’s Directors Domain. Read on

We all know the buck stops with the board. When corporate scandals erupt, people expect the board to take action—sometimes within the board itself. That's what happened at blood-testing company Theranos, which had been vilified by the press not only for failing to disclose that many of its tests allegedly don’t actually use its breakthrough technology but also for the relevance of its board. No big surprise then that the company announced a major reorg of its governance structure, complete with a new medical advisory board. What is surprising is that Volkswagen, weeks into its growing emissions scandal, has so far failed to respond to the cries for board reform, which many say are necessary if the automaker has any hope of rewiring its corporate culture and rebuilding its credibility. One thing that seems certain: VW is among the very few boards with a falling stock price that isn’t worrying about activist investors, whose influence seems to be on the rise. Not only are we seeing more shareholder-led take-overs, but in a strange new twist, activists are being hired as consultants to companies who want to know how they think. Read on

While a great board member is priceless, director pay is raising eyebrows this week: Mark Zuckerberg faces a lawsuit for allegedly overcompensating the Facebook board and USC Athletic Director Pat Haden comes under scrutiny for taking home nearly a half million dollars in annual compensation from the dozen boards he sits on. Meanwhile activist investor Carl Icahn places AIG in his crosshairs and demands the company be split in three. And women cybersecurity experts are making big gains in the boardroom, snapping up 10 of 16 seats at large corporations that have recently added directors to bolster their boards’ security expertise. Read on

“Crisis management” sounds like a business textbook chapter—until your board finds itself dealing with the unthinkable: a second CEO search in two months, even as you comply with a federal corruption investigation into the prior CEO’s business dealings. Or you discover that the $9 billion company your very visible board serves is very publicly accused of failing to deliver on its core promise. As these real-world dramas play out at United Continental Holdings and Theranos, respectively, you may want to heed the advice of the HBR writer who suggests that the key to great leadership is dedication to learning. In fact, you may want to reread that chapter on crisis management, just in case. Read on

Boards behaving badly… It’s not the kind of thing we like to dwell on, but this week former board members of Chicago Public Schools were called on the carpet for failing to provide oversight of the organization’s chief, who has pled guilty to serious corruption charges. Plus, governance expert and professor at Yale School of Management Jeffrey Sonnenberg offers a long, detailed look at flawed corporate boards and the trouble they’ve caused. For something more uplifting, spend a little time with the world’s best CEOS, who balance their drive for financial gains with attention to environmental and social issues. Read on

CEO Ellen Kullman’s surprise departure from DuPont was the talk of the boardroom this week, with pundits wondering why the chemical giant didn’t appear better prepared for a CEO transition. Many are speculating that DuPont may now bow to activist-investor pressure to split its business into multiple units—pressure Kullman had seemed to successfully deflect earlier this year. Another CEO transition, the appointment of Jack Dorsey to the power seat at Twitter, emboldened billionaire investor Chris Sacca to push for a shake-up of the ailing social media company’s board. Meanwhile, the drumbeat grows louder for increased diversity, better succession planning, and a greater focus on cybersecurity in the boardroom. Read on

This week, “engagement metrics” come to the boardroom: Twitter’s directors, under fire for their slow-motion approach to filling the CEO role, are outed for lackluster participation on the social media network. Large companies across the globe are shown to be forfeiting hundreds of billions of dollars by not engaging women directors. And directors contend that more debate in boardrooms would lead to better decision-making. Meanwhile, there’s no time like the present to ensure you have at least one tech-savvy director and a strategic CFO on your side. Read on

It’s a busy week in the boardroom. All eyes are on Volkswagen, whose board accepted CEO Martin Winterkorn’s resignation on Wednesday amid the $7 billion+ emissions scandal; more heads will likely roll and a new chief executive may be named as early as Friday, following a full meeting of the 20-person supervisory board. Meanwhile, BofA shareholders rally behind CEO Brian Moynihan, who will remain chairman of the bank, and billionaire Ron Perelman outs the Carnegie Hall board for its alleged lack of transparency and oversight. Read on

Welcome to the first issue of Director’s Notes, Boardspan’s weekly news digest. What a great moment to launch—with an activist investor attack on Bank of America’s board and a hostile takeover bid in the pharmaceutical industry sparking heated debates and creating real-time case studies on governance, the CEO-Chairman role, activist threats, and more. Find it all here, plus "must reads" on delegating risk management, when boards should ignore shareholders, and the causes of board failure. Read on