Across the Board
Governance ‘Godfather’ Ira Millstein Dies
Millstein described as “legend” of corporate governance
“Ira Millstein, a ‘legend’ in the corporate governance world, senior partner with Weil Gotshal & Manges and founding chair of The Millstein Center for Global Markets and Corporate Ownership at Columbia Law School, has died aged 97…During his remarkable career, Millstein advised many boards on corporate governance, with his impressive list of clients including General Motors, Westinghouse, Bethlehem Steel, WellChoice (formerly Empire Blue Cross), CalPERS, Tyco International, The Walt Disney Co and the Planned Parenthood Federation of America. He also advised companies on government regulation and antitrust law, representing the likes of General Electric and Matsushita.” GOVERNANCE INTELLIGENCE
U.S. Sues Apple, Accusing It of Maintaining an iPhone Monopoly
The lawsuit caps years of regulatory scrutiny of Apple’s suite of devices and services
“The Justice Department joined 16 states and the District of Columbia to file an antitrust lawsuit against Apple on Thursday, the federal government’s most significant challenge to the reach and influence of the company that has put iPhones in the hands of more than a billion people. In an 88-page lawsuit, the government argued that Apple had violated antitrust laws with practices that were intended to keep customers reliant on their iPhones and less likely to switch to a competing device. The tech giant prevented other companies from offering applications that compete with Apple products like its digital wallet, which could diminish the value of the iPhone, and hurts consumers and smaller companies that compete with it, the government said." THE NEW YORK TIMES
Airline CEOs Seek Meeting With Boeing Directors
Major carriers make the unusual request as frustrations mount
“Boeing’s biggest U.S. customers are taking their frustrations directly to its board of directors. A group of airline chiefs recently requested a meeting with Boeing’s board to express concern over the Alaska Airlines accident and production problems that have upended the industry’s plans, people familiar with the matter said. The airline bosses want Boeing directors to address the mounting fallout from the Jan. 5 panel blowout on a 737 MAX and to spell out their plan for fixing the aircraft maker’s quality problems.” THE WALL STREET JOURNAL
As Boards Focus on Cybersecurity, Are They the Biggest Threat?
With access to sensitive information, board members themselves could be targeted
“Corporate executives have a number of ways to keep board members abreast of the company’s cybersecurity preparedness, including presentations from technology executives, tabletop exercises that simulate hypothetical attacks, and reports on key cybersecurity metrics. However, none of these measures prepare directors to be resilient against potential attacks targeting them directly…Several board members told us that some directors use public email accounts—rather than official or encrypted messaging systems or document-management platforms—to share board information and communications. One commented that she thought the platform used by the board to share documents for meetings was secure, but she really didn’t know for sure…Virtually all cybersecurity assets and efforts are focused on protecting the organization itself—its employees, managers, executives, business processes, technologies and so on—but directors need to be included in the security plans, too. With the increasing mandate on boards to serve as the strategic cybersecurity guards of their companies, more needs to be done to guard the guards themselves.” THE WALL STREET JOURNAL
Nelson Peltz Fights Disney–and Turmoil at His Own Firm
Trian Partners contends with its own turnaround after a rocky spell
“The firm is now waging what’s expected to be the costliest proxy fight ever for two seats on Disney’s board. But while arguing it can help Disney “restore the magic,” Trian has quietly been grappling with its own upheaval. Trian’s assets under management dropped following a bruising stretch that included a painful bet on General Electric. Ed Garden, Nelson’s 62-year-old son-in-law and a co-founder of Trian, unexpectedly departed and is not speaking to Nelson after a power struggle within the firm that many expected he would one day lead. Matt Peltz’s ascent zapped morale among employees, prompting some to leave. With two of the 81-year-old Nelson’s sons now involved, some employees resent what they see as preferential treatment.” THE WALL STREET JOURNAL
Ben & Jerry’s Owner Loses Its Taste for Ice Cream
Unilever will spin off ice-cream business, which also includes Magnum and Popsicle
“After more than 100 years of selling ice cream, Ben & Jerry’s owner Unilever has lost its taste for the business. Unilever said Tuesday it plans to separate its ice-cream division—which also makes Magnum, Wall’s, Breyers, Talenti, Popsicle and Klondike—into a stand-alone business. It said listing the business as a separate entity is the most likely outcome. A sale is also a possibility. The company—whose stable of brands includes Dove soap, Hellmann’s mayonnaise and Tre Semme shampoo—also said some 7,500 jobs would be affected as part of a restructuring program aimed at saving 800 million euros, about $870 million, over the next three years.” THE WALL STREET JOURNAL
Microsoft Hires DeepMind Co-Founder to Run Consumer A.I.
Mustafa Suleyman and his team will join from OpenAI rival Inflection AI
“Microsoft Corp. has named Mustafa Suleyman head of its consumer artificial intelligence business, hiring most of the staff from his Inflection AI startup as the software giant seeks to fend off Alphabet Inc.’s Google in the fiercely contested market for AI products. Suleyman, who co-founded Google’s DeepMind, will report to Chief Executive Officer Satya Nadella and oversee a range of projects, such as integrating an AI Copilot into Windows and adding conversational elements to the Bing search engine. His hiring will put Microsoft’s consumer AI work under one leader for the first time.” BLOOMBERG
Good Corporate Governance Requires Active Board Monitoring of ESG Risks
Boards must ensure management is appropriately disclosing and mitigating material risks
“In today’s marketplace, companies are under increasing scrutiny regarding their public impacts—and their governance of these matters. This has serious material implications for all stakeholders. In 2017, for example, Papa John’s faced major controversy over race-related comments from its then-Chairman and CEO. As Peter Saleh of the financial services firm BTIG told CNN in 2019, ‘This company has lost maybe 10% of its total sales number since it started struggling back during late 2017. Things started to fall off a cliff for them.’ Beyond a single executive’s comments, the deeper problem stemmed from poor governance. Consider that today, one of Papa John’s ‘strategic priorities’ is to ‘build’ a culture of leaders who ‘believe in diversity’ – implying it had not previously sought to meet even the extremely low bar of leaders who believe in diversity.” PROXY PREVIEW
Avoiding Hanging Chads in Corporate Voting in 2024
Regulators and the industry work to improve processing and reporting
"In recent years, the U.S. Securities and Exchange Commission (‘SEC’) and industry service providers have made significant changes and improvements in processing and reporting proxy votes. The SEC provided new rules for use of universal proxy cards (‘UPC’) for proxy fights (‘contested solicitations’) and industry initiatives have led to reconciliation of ‘voting entitlements’ well in advance of shareholder meetings and confirmations to shareholders that their votes are reported as cast…When it comes to the largest proxy contests, the votes of beneficial shareholders can represent upwards of 95% of the total shares voted. In most contests, the outcome is known at the close of the polls.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
