Across the Board
Warner Reopens the Door to Paramount’s Bid
Board weighs new $31 per share proposal that challenges its Netflix deal
“Warner Bros Discovery opened the door on Tuesday to Paramount Skydance after the rival bidder raised its offer to $31 per share. The intense bidding war for the studio behind Batman and Harry Potter has reached a fever pitch, with the board signaling that Netflix may lose its place as the preferred suitor. Paramount enticed Warner's board back to the bargaining table last week by raising the possibility of an improved cash offer for Warner shareholders. In its revised bid, Paramount raised the termination fee it would pay should the deal fail to gain regulatory approval, to $7 billion — up from $5.8 billion…. The rival bidder also agreed to contribute more equity, should banks raise concerns about Paramount's ability to finance the deal when it closes. Warner's board said it has not determined whether the revised Paramount proposal is superior to the merger with Netflix, but that directors will engage further. Should a superior deal emerge, Netflix has four business days to revise its offer.” REUTERS
Opinion: Trump's Netflix Threat is a Warning to Every CEO
As Netflix and Paramount near a decision deadline, presidential remarks highlight the expanding perimeter of deal risk
“Netflix wants President Donald Trump's stamp of approval as it maneuvers to buy Warner Bros. Discovery. Now, Trump has a demand for Netflix: unseat board member Susan Rice. In normal times, we would all be marveling at the spectacle of the US president telling a company in the midst of a merger fight (Paramount also wants to buy Warner Bros. Discovery) how to structure its board…. Trump himself doesn't have the authority to stop Warner Bros. Discovery from selling itself to Netflix or Paramount, which is controlled by David Ellison and his father, the prominent Trump supporter, Larry Ellison. He can, however, instruct Attorney General Pam Bondi to sue to stop a deal on antitrust grounds…. Last summer, for instance, he announced that Intel CEO Lip-Bu Tan was ‘highly CONFLICTED’ and must resign. Days later, Trump met with Tan and described him as a ‘success.’ Weeks after that, the US government acquired 10% of Intel. Nor does Trump always follow through. Last fall, he demanded that Microsoft fire Lisa Monaco, an executive who had also worked for Clinton, Obama, and Biden. Monaco still works for Microsoft.” BUSINESS INSIDER
Netflix CEO says, “This is a business deal… not a political deal”
However, politicians don’t appear to see it that way
“The head of Netflix has responded publicly for the first time to President Donald Trump's calls for it to remove Susan Rice from its board. ‘This is a business deal. It's not a political deal,’ Ted Sarandos, the co-CEO of Netflix, told the BBC's Today program on Monday, referring to the company's bid to buy Warner Bros. ‘This deal is run by the Department of Justice in the US, and regulators throughout Europe and around the world.’… Earlier this month, Trump had said he ‘shouldn't be involved’ in the deal. But that changed over the weekend, with the president writing that Netflix should remove Rice from its board ‘or pay the consequences.’” YAHOO FINANCE
GOP Attorneys General Raise Concerns about Netflix-Warner Bros Deal
11 state AGs urge the Justice Department to examine the antitrust issues of the merger, which they argue will lead to higher consumer prices
"State attorneys general led by two Republicans are raising concerns about the proposed takeover of the Warner Bros. studios by Netflix Inc., saying it will harm consumers.
Mike Hilgers of Nebraska and Austin Knudsen of Montana said in a letter to the US Justice Department that a deal between the streaming giant and Warner Bros. Discovery Inc. will result in higher prices, less reliability and less innovation in the entertainment industry.
They also said the merger will be ’disastrous’ for the theater industry, citing Netflix’s historic reluctance to put its movies in cinemas. A total of 11 attorneys general signed the letter to U.S. Attorney General Pam Bondi.” BLOOMBERG
Board’s Oversight Responsibilities Come Under Greater Legal Scrutiny
Traditional Caremark oversight duties are colliding with unprecedented business disruption, creating new categories of director liability and new governance structures
“The boardroom dynamics we have witnessed over the past five years represent a fundamental shift in director oversight responsibilities…. In 1996, the Chancery Court of Delaware addressed the circumstances under which corporate directors can be held liable for failing to oversee compliance with the law…. The decision established that director liability for failure to oversee compliance with the law is narrow — directors must be found to have knowingly broken the law or to have consciously taken no good-faith steps to prevent the law from being broken…. [Today] Passive compliance monitoring is no longer sufficient. Courts expect boards to demonstrate active engagement with core business risks through documented discussions, appropriate questioning of management and responsive action when red flags emerge. [Meanwhile,] the SEC’s regulatory expansion is reshaping board responsibilities in ways that directly impact Caremark compliance. The July 2023 cybersecurity disclosure rules represent the most significant expansion of board-level disclosure requirements since Sarbanes-Oxley, creating explicit connections between regulatory compliance and fiduciary duties…. This convergence of evolving Caremark doctrine with expanded disclosure requirements is fundamentally changing how effective boards operate. It is recommended that directors move beyond traditional committee structures and implement integrated oversight frameworks that address both legal compliance and practical risk management needs.” DIRECTORS & BOARDS
DEI Rules That Changed Corporate Boards Are Vanishing
New appointments show a return to pre-DEI patterns as political pressures intensify
“Anti-diversity activists are going after DEI policies for corporate boards, but a new analysis finds that companies have largely abandoned those goals already. S&P 500 companies are adding women and minority directors no faster than they did a decade ago, shortly before diversity, equity and inclusion policies became more common across the corporate world…. Companies adopted such policies in droves over the past decade in the face of pressure from institutional investors and states such as California to diversify their largely white and male boardrooms. Goldman Sachs, until a year ago, also mandated that companies have diverse boards as a criteria for the bank to take them public. But as the political winds have shifted, companies have swiftly retreated…. Companies are also appointing fewer women and Black or Hispanic candidates to their boards. Nearly three quarters of last year’s newly appointed directors were men at S&P 500 companies, and roughly four in five new appointments were white…” WALL STREET JOURNAL
Beyond Representation: Making Board Diversity Work
Directors’ varied backgrounds add value only when debate is robust and voices are heard
“Boards recognize that innovative problem-solving requires diverse talent, perspectives, backgrounds, and styles. Having a range of views prevents the groupthink and blind spots that undermine decision-making and creativity. But diversity can bring conflict. Board members—especially those who are new, more inexperienced, or from a different demographic background—don’t always feel psychologically safe, especially if their views run counter to the dominant perspective. They have good reason to be anxious. Many boards are unable to leverage the benefits of robust debate and discourse that involves different points of view. What does it take to draw on the talents of all members and build an effective team?” HARVARD BUSINESS REVIEW
From Curiosity to Competence: Governing AI at the Top
As use cases multiply, boards are pressed to strengthen risk oversight and technological fluency
“Artificial intelligence (AI) types and applications are proliferating across industries, from machine learning and Generative AI to agentic systems and physical AI. While the use cases have grown, so, too, have the risks AI creates. For boards, the AI era has exposed new challenges in governance and risk management. Most boards (72%) report having one or more committees responsible for risk oversight, and more than 80% have one or more risk management experts…. Being an advocate and guide for AI risk management means, in part, asking the right questions. This necessitates AI literacy. To take part in AI risk management, board members can build AI literacy through traditional methods, such as bringing in speakers and subject matter experts and pursuing independent learning through classes, lectures, and reading…. If AI literacy in the boardroom is important, fluency in the C-suite is even more so. Board members are in a position to urge executives to build their AI fluency. As the power and allure of AI grows and use cases multiply, business leaders need knowledge and familiarity with the technology to responsibly shape AI programs.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
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