Across the Board
What To Do About AI?
Typically a champion of innovation, Bill Gates has sharply reassessed AI’s risks and warns of potentially catastrophic impact on humanity that urgently requires regulation
“Bill Gates says it’s time to hit the AI panic button. The technology has crossed dangerous thresholds in biology, cybersecurity, white-collar work, and human relationships, Gates said in an interview with Semafor…. His warning is a striking shift from three years ago, when he wrote that the coming ‘bumpy’ AI job disruption would lead to a ‘manageable’ transition and that the technology would help people work efficiently. Now, he says it will wreak economic catastrophe, with ‘far fewer’ jobs than exist today, thanks to the speed of AI’s advancements and what he calls a non-existent response from government and tech leaders…. Gates said it isn’t the speed of the revolution that worries him. It’s the breadth. ‘There isn’t a job that isn’t affected,’ he said…. ‘It’s different not because the speed is different, but the breadth is what makes it utterly, utterly a unique moment in evolutionary history,’ Gates said.” SEMAFOR
Data-Center Disenchantment
Public opinion is decidedly negative as big tech companies try to win support for their build-outs
“Data centers are incredibly unpopular among Americans. In a March survey of Americans by Gallup, 71% of respondents said they would oppose the construction of one in their local area. By comparison, just 53% said they would oppose a nuclear energy plant. Political pressure is also mounting, and politicians who once championed data centers are now bashing them. Pennsylvania Gov. Josh Shapiro, for example, who once embraced AI, on Tuesday signed an executive order placing strict guardrails on new data centers. The public-relations crisis is starting to overwhelm the tech giants. Companies like Microsoft, OpenAI and Amazon need the public’s buy-in to avoid speed bumps, maintain political support and curb blowback. To shore up support, they are hosting listening sessions, offering job guarantees and writing big checks to invest in local communities…” WALL STREET JOURNAL
An Antidote to Activist Targeting? A Credible Strategic Plan
New research finds that 90% of activist targets had gaps in long-term strategy, board engagement on strategic issues, or both
“2025 was a record year for shareholder activism. Over 255 campaigns were launched globally in the most prolific year to date. Activity in the United States was up 28 percent year over year; Japan reached its own record with 56 new campaigns…. In 2025, 29 percent of campaigns were launched by first-time activists, nearly breaking the record set the year prior…. 32 US CEOs resigned within a year of an activist campaign being launched, surpassing the previous record of 27 set the year prior…. In this sample, two patterns appeared in over half of the campaigns studied. In 71 percent of campaigns, companies lacked a credible long-term roadmap. In 55 percent of campaigns, boards were not spending enough time on strategic issues. Taken together, 90 percent of companies in the sample faced a campaign where at least one of these two gaps was present, and roughly one in five of those had both simultaneously…. Financial performance is the primary protection against activism, but a lack of a coherent strategic roadmap is a telltale weakness that an activist can easily leverage…. The lesson for boards and management teams is to close these strategic gaps before they become pressure points: to articulate a credible multi-year roadmap, to devote board time to the strategic questions that matter, and to earn the trust of long-term investors as a result. By the time an activist arrives, the vulnerability already exists.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Deloitte Settles DEI Suit for $21.5 Million
The Justice Department opened a new legal front against workforce diversity programs, using the False Claims Act to accuse Deloitte of violating the law governing federal contractors by allegedly engaging in practices to promote diversity, equity and inclusion
“Deloitte has agreed to pay nearly $21.5 million to settle allegations that it defrauded the federal government by continuing to consider diversity when making hiring, promotion and staffing decisions. It is the latest settlement stemming from investigations the Trump administration launched last year in a broad effort to root out diversity initiatives at major U.S. companies that contract with the federal government…. Many of the administration’s civil probes have been proceeding under a novel use of the False Claims Act. The federal law, used most often in healthcare to police Medicare and Medicaid fraud, is designed to punish businesses that cheat the government by inflating the cost of services or billing for work that was never performed…. In the second Trump administration, the Justice Department has been operating under a new theory that federal contractors that consider diversity, equity and inclusion in their employment practices are also committing fraud under the law…. Deloitte didn’t admit liability and denied in the settlement agreement that it engaged in the alleged conduct.” WALL STREET JOURNAL
A Spirited Family Feud
Brown-Forman’s heirs clash over board performance and strategy as a $15 billion takeover bid challenges generations of family control
“Each summer, the heirs to one of America’s biggest liquor fortunes gather in the heart of bourbon country for a family picnic. This year there was much to discuss and little to celebrate. Profits are shrinking at Brown-Forman, and people are drinking less of its flagship Jack Daniel’s whiskey. The CEO is leaving. Shares in the spirits giant have shrunk in value by 60% over the past five years amid a record-setting stock-market rally. Talks to merge with a competitor fell apart in the spring, and a crosstown rival has made a $15 billion hostile takeover bid. The troubles have opened a rift within the extended family that for more than 150 years has controlled Brown-Forman, amassing a collective wealth that Forbes puts at $11 billion…. Shortly before the family’s July picnic, two of the heirs sent a scathing seven-page letter to more than 130 of their relatives. ‘The numbers are stark and undeniable,’ said the July 10 letter…. And ‘The board is rewarding failure, and doing so lavishly and publicly’…. For generations, descendants of founder George Garvin Brown have run the business, even after they took the company public in 1933. The family has historically held the role of board chairman and kept a controlling ownership stake. Family members currently hold four of the company’s 11 board seats. Only two non-family members have ever held the title of CEO.” WALL STREET JOURNAL
The Board’s AI Blind Spot
Directors are embracing AI for board work faster than their own governance and security practices can keep up
“Ninety-two percent of board directors used AI for board work in the past six months according to the sixth annual OnBoard Board Effectiveness Survey of 531 governance professionals—up from 69% a year earlier. [Imagine…] Three days before the board meeting, a director opens a 300-page board book, weighs the limited time to prepare, and uploads the file to their preferred large language model. They ask about what they should push back on. And when the meeting starts, the director walks in prepared. No one approved the tool. No one knows it was used. The organization’s most sensitive material sits in a consumer chat log. The survey recorded the other side of that Sunday night: Confidence in board security fell 15 points year over year, the steepest decline in the study, and data privacy now tops the list of AI’s negative impacts…. Sixty-three percent have no formal AI policy. Only 6% have an enforced one, with signatures and reviews. That gap carries a measurable cost.” FORTUNE
AI Moves Fast. How Does a Board Ensure Cyber-Resilience?
As adoption accelerates and cyber threats evolve at machine speed, an argument for rethinking cyber oversight
“In boardrooms today, two common conversations exist side by side, but are regularly treated separately from each other. One is about artificial intelligence (AI): how quickly a company is adopting it and where AI will create value. The other is about cyber risk: how exposed the company is and how much an incident cost. In fact, these are part of the same conversation, and the market is already valuing that difference. The UK Treasury has measured this directly: more cyber resilient organizations recover more shareholder value after a serious disruption and grow faster afterward than less prepared companies.1 The forces now reshaping cyber risk, machine-speed AI, and an approaching cryptographic shift, do not affect every organization equally. They act as a market filter, separating companies that treat resilience as a strategic capability from those that treat it as a cost to deal with later…. For boards, resilience is not, above all, a question of cost. Boards should understand the answers to the following questions: Do we know, with confidence, every AI system and every cryptographic dependency we are exposed through? Can we contain an AI-driven attack faster than it can move? When we look at the risks we cannot yet see (the vulnerability not yet disclosed, the data already harvested for a decryption that has not happened yet), do we treat them as someone else's problem, or as already ours? That is what it means to redefine the board's responsibility for cyber resilience: acting on the damage before it is visible, not after.” ALVAREZ AND MARSAL
When the Lenders Call the Shots
AI disruption may be turning the tables on software buyouts, forcing costly concessions as billions in debt come due
“Thoma Bravo executives went into talks with lenders knowing they’d have to give ground — the only question was how much…. Proofpoint, the cybersecurity software company Thoma had taken over years earlier, needed more time to repay billions of dollars of debt loaded onto its balance sheet to finance the acquisition. With markets increasingly skittish about anything even remotely vulnerable to AI disruption, the lenders were determined to extract a steep price in return…. The final tally: some 40 creditor-friendly changes to the deal documents, including tighter limits on future borrowing and regular check-in calls, as well as an extra $60 million in annual interest to extend most of the $5 billion loan by two years…. With about $9 billion of portfolio company debt maturing by the end of 2028…. Thoma is racing to convince lenders to stick with it and, in turn, a software industry that’s suddenly fallen out of favor….” BLOOMBERG
Paramount’s Deal Clock Is Ticking
California calls off negotiations with Paramount, raising the stakes as its Warner Bros. Discovery acquisition heads toward a March trial
“California’s attorney general has canceled a meeting with representatives of Paramount that was scheduled for Monday to begin discussing a settlement of the state’s lawsuit seeking to block Paramount’s proposed acquisition of Warner Bros. Discovery. Rob Bonta, the attorney general, called off the meeting late Sunday, accusing Paramount of acting in bad faith…. Mr. Bonta accused Paramount of leaking details of a meeting the parties held on Friday…. The Monday meeting was supposed to be preliminary, and there was never any assurance that it would lead to meaningful negotiations toward a settlement…. With a trial scheduled for March, delays could cost the company hundreds of millions of dollars in fees that it must start paying to Warner Bros. shareholders if the deal is not closed by October.” NEW YORK TIMES
Opinion: Badly Behaved CEOs Hired as ‘Distressed Assets’ Are No Bargain
Research shows that many executives accused of misconduct are repeat offenders of inappropriate behavior
"L3 knew Christopher Kubasik came with serious baggage when it hired him as president and COO in 2015. (The company made him CEO in 2018 and merged the next year with Harris). But Kubasik offered something the board could not resist. He had an impressive resume and track record, with acumen for the business if not for his own reputation management. His downfall at Lockheed had put a star manager on sale.... His ouster from L3Harris reveals a hazardous asymmetry in the way boards tend to assess CEOs. Directors have reams of data about a candidate’s financial performance. Character and integrity are much harder to measure. But boards make a perilous choice when they consider the latter a soft, personal quality separate from business execution." BLOOMBERG
Who’s Reading the Proxy?
The 2026 proxy season looked quiet on the surface, but AI, regulatory shifts and changing investor behavior are making the landscape less predictable
“Headline voting results from the 2026 proxy season reflect relative calm: continued high support for directors, hardly any failed say-on-pay votes and a sharp decline in shareholder proposals reaching the ballot. Yet those results mask a more complex reality. Companies and investors alike navigated an increasingly uncertain and fragmented proxy landscape shaped by ongoing regulatory, legal and technological change…. One theme from our conversations with investors is that they want a clearer view into how boards are executing oversight of AI and technology more broadly…. This season, 37% of S&P 500 companies cited AI experience for at least one director, up from 11% in 2022…. Investors are increasingly using AI tools to review disclosures, compare companies and inform voting decisions…. As one investor told us: ‘there is no hiding in the footnotes anymore.’” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
