Director's Domain: Corporate Governance News & Board Insights

January 19, 2023 -

This week, we salute 2023, a new year and a new opportunity for boards to have an impact. In the spotlight this week: Six actions you can take to strengthen governance, tackle the challenges of these uncertain times with confidence, and help prevent the kind of disastrous governance meltdowns we saw far too many of in 2022. In other news, Disney’s board goes on the defensive about its decision to bring back CEO Bob Iger while aiming to rebuff activist investor Nelson Peltz and his bid for a board seat. Apple agrees to audit its US labor practices at the SEC’s request, amid accusations of union busting. There are insights about ESG as a value creation strategy, how good governance can lead to better returns, and why board minutes should be treated as anything but perfunctory. Plus, learn the eight essential questions board members should ask before selecting a new chair.

January 12, 2023 - Strong CEOs and founders can be visionaries and effective leaders.  But we’ve seen some of the effects of key-person risk play out in business headlines over the past week. At Tesla, shareholders are demanding to see a succession plan as CEO Elon Musk continues to split time between two companies. WWE founder Vince McMahon is back in the boardroom, though only weeks ago the board was investigating legal claims against him for sexual harassment. And in China, billionaire Jack Ma is ceding control of Ant Group, Co. after longtime concerns over his dominance in the organization. These are all extreme cases, but many boards work hard to achieve balance in their relationship with the CEO. The keys to success? Trust, two-way communication, alignment on the mission and vision of the company, and a commitment to strong culture and oversight by the board are all important to maintaining balance in the boardroom universe.    Read On

January 06, 2023 - Twitter, Tesla, and others provided food for thought and lessons in corporate governance in 2022, but no crisis hit home for consumers more than the Southwest scheduling debacle over the holidays. With thousands stranded in airports around the country, fingers pointed in all directions. While Southwest company leadership played a huge role in operational decisions (and lack thereof) that led to the meltdown, many also questioned the board’s role in preventing such a large-scale crisis. It’s no wonder crisis prevention is top of mind for many boards in 2023. Expect to hear more about it in the coming weeks.    Read On

December 22, 2022 -

Those who don’t learn from history are doomed to repeat it. Six years ago, Wells Fargo faced condemnation for defrauding retail customers by secretly opening unauthorized deposit credit card accounts. This week, they’re back in the news for misconduct surrounding auto loans and mortgages. Our guidance for boards is the same as it was six years ago: Information, independence, oversight, and the tone at the top are all critical for boards in helping companies act ethically and avoid scandal.   

December 15, 2022 -

Oversight really matters. The collapse of FTX and this week’s indictment of Sam Bankman-Fried is the latest example of what can go wrong without it. What’s the right amount of oversight and how do you achieve it? Start with the basics: Two-way communication between the board and the CEO, transparency, and honesty as non-negotiables. As always, trust, but verify. Overcommunication and collaboration are the building blocks of proper governance; access to information, benchmarks, and a regular cadence of check-ins all minimize the need to micromanage.