6/1/23 – Issue 8.20 – Your weekly news on all things board. 

More annual meetings and shareholder activism in the news. This week, Glass Lewis recommends that Toyota shareholders vote against board chair Akio Toyoda, citing a lack of board independence. Freshpet’s largest investor demands board and governance changes, and Carl Icahn gets one of his activist candidates elected to the Illumina board.  

In other news, Icahn gains ground at Illumina but loses money over Hindenburg Research accusations; PwC Australia faces a leadership overhaul amid a tax leak scandal; embracing the idea of an “imperfect” CEO; and a new book sheds light on the achievements of women in the boardroom. 

In the Spotlight

Glass Lewis recommends a vote against Toyota Chairman

The report raises concerns about board independence.

“Proxy adviser Glass Lewis has recommended that shareholders of Toyota Motor Corp vote against the re-election of Chairman Akio Toyoda as a board director at an upcoming meeting, citing his responsibility for the lack of a sufficiently independent board. Glass Lewis made the recommendation against the chairman of Japan's largest company by market capitalization at a time when board independence has been under greater scrutiny from investors.” REUTERS

Activist Investor Pushes Freshpet on Board Changes

Jana Partners alleges that Freshpet breached fiduciary duties.

“The activist investor pushing for board seats at Freshpet Inc wants the pet food company to roll back a recent governance change and said it may take the matter to court unless the decision is reversed…Jana Partners, Freshpet's largest investor with a 9.3% stake, argues a decision to cut the number of directors standing for re-election at this year's annual meeting harms shareholders and hinders its ability to run a proxy fight.” REUTERS

From Boardspan this Week:

Preparing the Board for Activist Investors: A Proactive Defense Affords the Best Chance of Success

Shareholder activism is on the rise and no company is immune. Here’s how to prepare.

"Regardless of a company’s success or confidence in its strategy, management, and board, there are few situations public companies face that are more daunting than an unsolicited approach by an activist investor. And with activist activity continuing to rise—we have seen a record number of companies targeted by activists, a record number of activist campaigns launched, a record number of board seats won, and a rising bench of first-time activists—all companies need to be prepared. The increasingly sophisticated and complex manner in which activists target companies requires dedicated focus and a cohesive strategy by a company’s management and its board long before an activist comes knocking.” K2 via BOARDSPAN 

Across the Board

In the Midst of Illumina Activism, Icahn’s Net Worth Takes a Hit

Hindenburg Research accusations cause stock price to drop 60 percent since May 2 report.

"In a May 2 report, the short seller accused Icahn of costly missteps, if not outright malfeasance, and said the company was drastically overvalued. The firm, in a statement, has called the allegations ‘self-serving’ and vowed to ‘fight back.’ Since then, Icahn Enterprises’ stock price has fallen more than 60%. That’s reduced Icahn’s net worth by more than $16 billion, according to the Bloomberg Billionaires Index. In a lengthy interview with Bloomberg on Sunday, Icahn mostly waved off the uncomfortable questions. He said he was focused on getting back to what he does best: shaking up the companies he invests in.” BLOOMBERG

PwC Australia Overhauls Board Following Tax Leak Scandal

Nine partners put on leave as company addresses crisis.

“PricewaterhouseCoopers (PwC) Australia on Monday ordered nine partners to take leave and overhauled its governance board, as it battles a national scandal over the misuse of confidential government tax plans. The ‘big four’ firm is reeling after a former tax partner consulting on new anti-tax avoidance laws shared confidential drafts with colleagues that were then used to drum up business. In an open letter, acting chief executive Kristin Stubbins said she wanted to apologize on behalf of the firm for ‘sharing confidential government tax policy information’, and said nine partners had been directed to take leave.” REUTERS

The Imperfect CEO

Instead of searching for perfection, it may be time for companies to embrace the idea of an “imperfect” CEO.

“Imperfection isn’t failure. Yet when it comes to CEO succession, businesses today often expect candidates to be the full embodiment of excellence and success—to be perfect. They expect CEOs to avoid any missteps as they set the direction and strategy of the company, lead and develop the executive team, build and maintain relationships, make decisions, communicate effectively, manage financial performance, and demonstrate integrity and ethical leadership.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

New Book Highlights the Achievements of Women in the Boardroom

A look at Julia Boorstin’s 'When Women Lead'.

“...if board members — especially the predominant white male majority — learned more about the leadership accomplishments of women, they might be less susceptible to the inertial forces of the past and able to think more broadly regarding board composition and identification of diverse candidates for their boards. Boorstin effectively spotlights some key commonalities and characteristics that have historically helped many female leaders to succeed and thrive as they innovate, grow businesses and navigate crises. Understanding these characteristics can be valuable to all board members as we take on the important work of improving boardroom diversity and making open-minded decisions about company leadership.” DIRECTORS & BOARDS

Seat at the Table

• Apparel company Guess? welcomes to its board Thomas Barrack Jr., Founder and former CEO of investment firm Colony Capital

• Multi-stream collaboration company Oblong elects to its board Jonathan Schechter, Partner at securities firm The Special Equities Group; and Robert Weinstein, Chief Financial Officer of biotech company Synaptogenix

• Pet health services PetMeds adds to its board Sandra Campos, former CEO of luxury brand Diane von Furstenberg

• Catalyst Pharmaceuticals appoints to its board Tamar Thompson, VP and Head of Global Corporate Affairs for Alexion Pharmaceutical

• Brand management company Genius Brands International elects to its board Henry Sicignano III, President of consumer goods company Charlie’s Holdings

• Noodles & Company welcomes to its board Thomas Lynch, Founder and Senior Managing Director of investment firm Mill Road Capital

About Boardspan
Boardspan is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, benchmarking analytics and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.