Director's Domain: Corporate Governance News & Board Insights
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April 18, 2024
Multi-faceted topics can lead to healthy introspection and effective balance of oversight; except for when they don’t, and instead result in widening misalignment. Whose opinions matter most will be debated in the boardroom and beyond for a long time to come. To wit, Elon Musk’s pay package is back in the news, once again being put to a Tesla shareholder vote after being struck down by a Delaware court as an “Unfathomable Sum”. Drawing criticism for being excessively generous and lacking in conventional performance metrics, scrutiny is especially heightened with the decline in value of Tesla’s stock. Another point of tension, Harvard faculty demand greater representation as they declare a lack of faith in the storied institution’s governance. And, a revealing PwC study highlights that while directors’ oversight contributions are valued, management teams express a growing lack of confidence around their boards’ adaptability in this rapidly changing operating environment. This week’s news brings a critical reminder to boards to look at all perspectives on almost all topics, especially the controversial ones.
In other news, governance of transformation; AI governance on the corporate radar; differing agendas between the board and management; and a helpful 2024 proxy preview.
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April 11, 2024 -
Proxy season is never dull. On the heels of the high-profile Disney proxy battle, two other boards are in the midst of shakeups. First, Macy’s will gain two new directors backed by activist shareholder Arkhouse Management, who was rebuffed earlier this year in its attempt to acquire the struggling retailer. Arkhouse launched a campaign for nine seats on the board, but gaining two may help bolster its takeover bid, along with raising their offer price. In another big shift, four directors at Paramount are expected to leave the company this week amidst talks of a merger with Shari Redstone’s Skydance Media. Paramount has moved into exclusive talks with Skydance after talking with a series of suitors. Redstone and the Paramount board’s governance committee have reported that they want a smaller board for more efficiency during the talks, but at least one departing board member has expressed concern over the merger.
In other news, a deep dive into Iger’s defense against Trian; Norfolk Southern agrees to a settlement; nine ways to enhance board performance; and the new normal of contested M&A.
Read OnApril 04, 2024 -
Culminating after weeks of proxy drama, side choosing and surprise votes, Disney has prevailed. The company and its shareholders have denied Nelson Peltz seats on the board for a second time. Preliminary vote tabulations show that Disney’s 12 board members won re-election by a “significant margin.” CEO Bob Iger won re-election with 94% of votes cast in his favor, compared with Peltz’s 31%. Official results will be announced at the Disney shareholder meeting next week. As one of the largest board proxy battles in history comes to a close, Disney has already seen its shares jump since the beginning of the year and the result is a huge vote of confidence for Iger. Will Disney turn its attention to succession planning, with Iger’s anticipated departure in 2026? Will confidence in the board translate into solutions for Disney’s current challenges? The end of this proxy fight may be the start of an interesting new era.
In other news, two Warner Bros Discovery directors resign amid antitrust probe; four things to know about healthcare cyberattacks; ESG pressures from the left and right; and what AI companies can learn from Enron.
Read OnMarch 28, 2024 -
In 2019, Dave Calhoun was hired at Boeing to help repair the reputation of the company after a pair of deadly plane crashes. This week, he resigns as CEO, plagued by many of the issues he was brought in to fix as Boeing contends with a string of safety mishaps. Boeing board chair Larry Kellner also announced his departure, as did the head of the company’s commercial plane unit. There are plenty of questions about what the board knew and did, and when. The Boeing situation is another study in governance, crisis management, and accountability.
Risk and crisis management loom large in this week’s news. Some crises are a slow burn that eventually ignites, like Boeing appears to be; other events with impact, like Baltimore’s Key Bridge tragedy, erupt without warning. In our webinar this week, Amazon and Verisign board member and crisis management expert Jamie Gorelick stresses the importance of having a plan. “It’s the one thing I think we underprepare for…at least talking about what you would do in the event of something really serious or even existential is a very good conversation to have in advance.”
In other news, Neumann’s puts in his bid to buy back WeWork; BlackRock’s Larry Fink releases his annual letter; how the Key Bridge crash affects the supply chain; and re-evaluating acceptable board risk.
Read OnMarch 21, 2024 -
The heavyweights are weighing in on the Disney proxy fight, and things are getting interesting. Earlier this week, Glass Lewis came out in favor of Disney, advising shareholders to vote with Disney’s slate of 12 board nominees and forgo nominees backed by activist investors Trian Group and Blackwells Capital. Major Disney shareholder George Lucas also endorsed the Disney slate. Today, International Shareholder Services (ISS) announced that it is endorsing Trian’s Nelson Peltz for a board seat–but only Peltz, not the other activist candidates. Trian says that it can help Disney “restore the magic,” while George Lucas argues that “creating magic is not for amateurs.” Who is the best steward of Disney’s magic, and, more importantly in this context, of its future as a corporation? That’s for the shareholders to decide on April 3.
In other news, remembering Ira Millstein; The U.S. government sues Apple for antitrust; are boards a hidden cyber threat? And how to avoid hanging chads in the boardroom.
Read OnMarch 14, 2024 -
As a vote to force either a sale or a ban of TikTok passes in the House of Representatives and heads to the Senate, it raises questions: about national security, free speech, data privacy, and the economic impact of a U.S. ban on a business that generates millions in ad revenue and in income for creators. If it passes, the bill–which has both bipartisan support and opposition–would give Chinese company ByteDance six months to find a U.S. buyer. Who would buy TikTok? Who wins if it’s banned? And how would a U.S.-based owner and board address the complex governance issues that continue to exist around sensitive data and bad actors? The bill is the latest example of geopolitical issues affecting business, and another reminder of how data, algorithms–and soon AI–can make businesses and boards vulnerable if governance is lacking.
In other news, Sam Altman is back on OpenAI’s board; The new SEC climate regulations are here; the Economist looks at women on corporate boards; and a path to better ESG strategy.
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