Across the Board
Salesforce Co-CEO Bret Taylor Exits, Benioff Alone At The Helm Again
“Salesforce Inc. announced the surprise departure of co-CEO Bret Taylor and said that Marc Benioff would become the sole chief executive at the business-software company he co-founded. Mr. Taylor, who was elevated to the co-CEO role a year ago, will vacate the position on Jan. 31, the company said Wednesday. Mr. Benioff will continue to serve as company chairman, Salesforce said. The departure continues a period of leadership upheaval at Salesforce in recent years. In 2018, Keith Block was promoted to co-CEO alongside Mr. Benioff after five years as president and chief operating officer. He left 18 months later, saying he was moving on to the ‘next chapter.’” WALL STREET JOURNAL
Companies Whose Boards Have An Executive Chair Are 33% More Profitable
“We found that the executive board chair is typically a former leader of the firm. In 35% of cases the executive chair was the firm’s founder (e.g., Jeff Bezos at Amazon), in 11% they were a member of the founding family (e.g., Bill Ford at Ford Motor Company), and in 40% they were the firm’s retired CEO (but not a founder or member of the founding family, e.g., Eric Schmidt at Google). Accordingly, executive board chairs hold considerable knowledge about their companies.. … Corporate governance best practices typically prescribe a division between management and oversight. For that reason, companies have been moving away from a combined CEO-chair structure and toward an independent chair structure. The executive board chair position offers a middle-ground option, seeking to benefit from a chair’s strategic acumen and managerial experience while still remaining independent from management to provide effective oversight. And it is indeed effective: We found that when a company has an executive board chair, it has on average a 33% higher profitability than when it has another type of board chair. HARVARD BUSINESS REVIEW
Opinion: FTX Blow Up Calls Into Question What Governance Is, Should Be
"Of the many dimensions of the FTX fiasco, the most shocking is the comprehensive failure of corporate governance, now becoming clear as the bankruptcy process unfolds. Sloppy and likely illegal management practices at FTX have raised doubts that extend beyond the company to call into question the whole crypto premise. They also cast doubt on the integrity of the ESG rating business, and on several other components of the larger financial system….The FTX situation forefronts the question — What exactly is “governance”? What does the G in ESG really stand for? In particular, what special characteristics does ‘governance’ have in the crypto context? How do the ratings measure it? How should they measure it?…” FORBES
A New Definition of ESG
“Investors, companies, and commentators have increasingly accepted and adopted stakeholder governance as the way to pursue the proper purpose of the corporation and have embraced consideration of environmental, social and governance (ESG) issues in corporate decision-making toward that end. But an emerging movement opposed to any consideration, at all, of ESG factors threatens to erase the gains that have been made over the past ten years and revert to the outdated view that the purpose of a company is solely to maximize short-term shareholder profits…This debate is playing out very publicly, with politicians at the highest levels of state and federal government publicly staking out positions on ESG and the extent to which it should (or should not) be considered by asset managers; through regulation and law; and in boardrooms across the country and around the world…ESG, properly understood, is not a monolithic concept, but rather refers to the panoply of risks and policies that a company must carefully balance in seeking to achieve long-term, sustainable value.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
AMC Layoffs Follow Departure of CEO Christina Spade
“AMC Networks Inc. said it is planning to lay off about 20% of its U.S. employees, a sign of further disruption at a company that earlier Tuesday announced its chief executive had stepped down less than three months after taking the reins…The planned job cuts come as AMC, which for the past 15 years has been home to many popular TV shows including ‘Mad Men’ and ‘Breaking Bad,’ is struggling to generate enough money from its streaming services to make up for the continued decline of cable television, as Americans cancel their pay-TV packages in droves…Earlier Tuesday, AMC said CEO Christina Spade had stepped down. Ms. Spade, who the company said wasn’t terminated for cause, didn’t respond to a request for comment. The company said its board is finishing work to name a successor.” WALL STREET JOURNAL
Podcast: Ensuring the Right Company Culture Is Essential, says Citibank CEO
“Jane Fraser became CEO of Citi in March 2021- a difficult time for the world and for the bank. Fraser was expected to turn around a bank that had struggled to recover from the 2008 financial crisis when it took a $45 million government bailout in order to survive ... In this episode of Leadership Next … speak with Fraser about why focusing on culture is essential to turning Citi around and why she is committed to making empathy a key initiative in banking. She explains her approach to true inclusion in the workplace and why equity is essential to successful investing…She also speaks candidly about her journey towards the CEO role as a woman and a mother.” LEADERSHIP NEXT
Entire Soccer Club’s Board of Directors Resign via Scandal
“The entire board of directors of Juventus, including the club’s President Andrea Agnelli and CEO Maurizio Arrivabene, has resigned over charges of false accounting, a statement from the Italian soccer club said Monday. The decision to collectively resign came after an extraordinary meeting was held Monday after ‘new legal and accounting opinions’ from independent experts were obtained…The Serie A team’s financial statements underwent scrutiny by prosecutors and Italian market regulator Consob in recent months for alleged false accounting and market manipulation. The company has denied any wrongdoing…Upon the proposal of Agnelli, the board agreed that it was in the best interest of the club for a new board to take over at Juventus.” CNN
From the Boardspan Library
Championing Successful CEO Succession
"Few board responsibilities are more important than hiring and firing the CEO. Independent lead directors and independent chairs play a pivotal role in helping ensure their boards are ready for a CEO change—planned or unplanned. Our recent conversations with these board leaders offer timely insights into succession processes and strategies they champion to have the right person at the helm, and at the ready. CEO succession planning is an ongoing, dynamic process, and boards must always be thinking about developing potential CEO candidates. This effectively means that boards should start planning for succession the day a new CEO is appointed.“ KPMG via BOARDSPAN
