Set the tone, control the tempo. More than ever, boards are being tested on how they harmonize to bring all of the players together. To wit, rising CEO turnover is testing whether boards have the right oversight processes in place, from succession planning to talent readiness. Those that stay grounded in core governance practices and clearly aligned committee mandates are best positioned to add value and get out ahead of unexpected challenges. Against this backdrop, activists may try to change the beat, but boards determine how the music is played. This week’s headlines include some practical advice as to what to expect in the current environment, along with pointed reminders that no one sits still, including activists, regulators, and the myriad of other stakeholders. In short, the environment remains noisy, highlighting a familiar dynamic: external demands are constant. Governance is not about accepting the cacophony but about maintaining the clarity and readiness to conduct the response on your own terms.
In the Spotlight
Consumer Strain Drives CEO Turnover and Board Action
Even with fewer proposals, investor expectations and scrutiny continue to deepen
“CEO turnover in consumer companies hit a record high last year, in the face of rapid, compounding change. The job has never been harder — tenures are shortening, the environment is less predictable, and the pipeline of leaders ready and willing to step into the role is thinning. Boards are already responding, reaching more often for leaders with prior CEO experience. But hiring differently is only part of the answer. The boards that treat succession as an ongoing discipline are positioning their organizations to navigate what comes next, rather than just reacting to it…. In 2025, 54 consumer CEOs at publicly listed companies around the world left their roles, the most since we began tracking CEO turnover in 2018. In percentage terms, this was the highest turnover rate of any sector we track across listed global indices, at 17%. Those who left spent less time in seat than their peers in any other industry, serving just 6.3 years on average (compared to the 7.1-year global average), continuing the shortening tenure trend.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Succession Planning Signals More Than Continuity
Continuous succession planning can protect against both shareholder activism and political and financial uncertainty
“CEOs are older on average than in previous years as company boards prioritized continuity during the COVID-19 pandemic... The report, released last month, was based on CEO and director interviews, proprietary survey data, longitudinal board and leadership metrics and real-time market and activism trends. More recently, slow leadership turnover has also been a bolster against unpredictable times, with escalating geopolitical and economic uncertainty cited as top risks by directors and CEOs for the third year in a row, according to the report. But in such conditions, CEO succession is being viewed and used as a proactive governance and performance lever…. Succession planning, such as beginning succession dialogue immediately after a CEO is appointed and maintaining regular, structured discussions, can be used to ‘signal accountability, adaptability, and strategic intent to investors,’….” ESG DRIVE
The Pitfalls of an Interim CEO
Appointing an interim CEO may seem like a safe response to sudden leadership gaps, but research suggests it often triggers negative reactions and long-term value loss
“Your CEO is suddenly out. It will take time to manage the succession, so you appoint an interim chief executive as you figure out your plans. Makes sense, right? Maybe not. Boards often view interim leaders as safe, temporary appointments, but it turns out investors don’t like them at all. Stock prices often fall the moment an ‘interim’ selection is announced, and research based on a sample of companies from the S&P 1500 found that in the years following interim transitions, companies typically end up losing hundreds of millions of dollars of value. And yet boards frequently take this route: Nearly one-third of CEO successions currently involve interims.” HARVARD BUSINESS REVIEW
From Boardspan this Week:
Board Effectiveness
How boards move from oversight to strategic impact
Board effectiveness isn’t the result of a single decision, structure, or governance model. Instead, it depends on how the board operates, behaves, and performs across a set of distinct but interrelated dimensions that together shape governance quality and strategic impact. These key drivers include the board’s responsibilities, strategy, alignment, culture, composition, information, meetings, leadership, and committees. Each of these factors influence the board's ability to fulfill its roles in supervision, strategic oversight, and forward-focused governance. |
Across the Board
Ackman Takes Another Run at Universal Music, With a New Board in Mind
A proposed $60B deal would merge the label with Pershing Square’s SPARC vehicle
“Bill Ackman’s Pershing Square Capital said it had made an offer to buy Universal Music Group in a deal that values the company at around $60 billion, the latest attempt by the activist investor to land the world’s largest record label. The deal for the company that works with Bad Bunny, Taylor Swift and the Beatles, if approved, would close by the end of the year and would involve Universal merging with Pershing Square Sparc Holdings, a specially-created acquisition vehicle…. One of the “big three” record labels alongside Warner Music Group and Sony Music Entertainment, it commands a market share of more than 30% of the global recorded-music business…. As part of the proposal, Pershing Square said the new company would appoint a fresh board of directors, which would include former Disney chief Michael Ovitz. Ackman’s interest in Universal dates back to 2021 when he tried to use another investment vehicle, Pershing Square Tontine, to invest in the label.” WALL STREET JOURNAL
Swatch Urges Rejection of Activist’s Board Seat Bid
The company urges shareholders to vote down the nomination despite continued governance demands
“Swatch has once again opposed GreenWood Investors' bid for a seat on the board and has urged shareholders to vote against the activist investor at its upcoming annual general meeting, the watchmaker said on Wednesday. The Swiss company, which sells luxury watches with its brands Omega, Breguet and Blancpain alongside its plastic watches, said the American firm's candidate and founder, Steven Wood, was not suitable to represent the interests of its shareholders…. Wood failed to secure a spot as bearer shareholder representative in May last year due to opposition from the Swatch founding family, the Hayeks, which controls around 45% of voting rights. Swatch had then recommended shareholders vote against the election ahead of the annual meeting last year, with 79.2% of shareholders voting against Wood….The activist investor has since continued to press for changes at Swatch, including for a bigger focus on luxury brands, publishing six proposals to amend the Swiss watchmaker's corporate governance in November.” REUTERS
BP Chair Faces Re-Election Challenge After Board Blocks Climate Proposal
Investors and proxy advisers raise concerns over governance and disclosure practices
“Proxy adviser Glass Lewis has recommended voting against Albert Manifold’s re-election as chair of BP over concerns about climate-related reporting, as investment group Legal & General also said it would oppose him. Both groups said a decision by BP’s board to exclude a climate-related shareholder resolution from Follow This, the Dutch green investor group, at its annual meeting later this month raised concerns about transparency. The proposal had asked BP to set out strategies for maintaining shareholder value if oil and gas demand declines…. Meanwhile, Glass Lewis, the influential advisory group, said the exclusion of the proposal had not been necessary and raised ‘concerns about transparency, shareholder communication and responsiveness’. It comes in the context of mounting pressure on BP from activist investors and pension funds after the oil major’s pivot away from renewable energy. The growing tension is a test for Meg O’Neill, who joined BP as chief executive this month from oil and gas producer Woodside Energy.” FINANCIAL TIMES
Jeff Shell to Depart Paramount and Board as Legal and Governance Questions Emerge
Investigation into alleged information disclosures prompts leadership and board exit
"President Jeff Shell will leave the company Wednesday, according to people familiar with the matter. He is also expected to resign from the company’s board of directors…. Shell was accused of leaking material nonpublic information about Paramount’s business dealings by R.J. Cipriani, a self-professed fixer and whistleblower who said he did work amounting to crisis communications services for Shell…. Cipriani subsequently filed a similar lawsuit against Paramount and its board of directors. Shell’s departure from Paramount was expected regardless of the Cipriani squabble…. He was instrumental in the buildup to Paramount’s acquisition of Warner Bros, Discovery, most of the company’s key unit leaders reported to chief executive David Ellison. Shell’s departure from Paramount marks the second time he has left a high-profile position under pressure in recent years. In April 2023, Shell resigned as chief executive of Comcast’s NBCUniversal after an investigation into a sexual harassment complaint.” WALL STREET JOURNAL
Guiding Transformation: A Board’s Role Across the Process
Sustained change requires active oversight of strategy, capital, talent, and culture
"Change efforts fail more often than they succeed. Not occasionally. Not under extreme conditions. Not without warning or explanation. They fail routinely and often. Companies continue investing trillions in change initiatives, yet outcomes largely remain unchanged. Unsuccessful change efforts aren’t just inefficient; they’re a waste of human potential, leaving organizational scar tissue that diminishes both appetite and capacity for future adaptation. However, transformation doesn’t have to be a gamble…. Successful change demands proactive oversight from boards on behalf of shareholders. Directors must pressure-test the strategic ambition of the transformations, ensure capital allocations align with investor expectations, ensure the right management team is in place with aligned incentives, test the program for best practices and ensure equal focus on shifting the culture to enable outcomes.” CORPORATE BOARD MEMBER
Audit Committees Take On AI, and a Broader Mandate
AI is expanding the committee’s mandate from financial oversight to enterprise-wide governance of risk and value
“Not long ago, the audit committee’s agenda was, by design, rigorous but relatively bounded: financial reporting integrity, internal controls, external auditor oversight and regulatory compliance. The work was exacting and consequential, but its perimeter was reasonably well-defined. AI is dissolving that perimeter…. AI is not approaching from some distant horizon. It is already reshaping how companies operate and how material risks and opportunities are surfaced and managed. For audit committees, this is not a future challenge to plan for. It is a present-tense governance obligation. The data tells the story. According to EY’s Center for Board Matters, nearly half of Fortune 100 companies now specifically disclose AI risk as part of board oversight responsibilities, a threefold increase in a single year. Across the S&P 500, roughly 40% of companies have assigned AI oversight to at least one board-level committee, up from just 11% the prior year. The audit committee has become the default landing place for this responsibility for some companies.” DIRECTORS & BOARDS
Five Governance Priorities for the Remainder of 2026
Leadership succession, AI oversight, and geopolitical risk top the boardroom priority list
“Top Five Governance Priorities for 2026. 1. Fortify CEO succession and leadership pipelines: A demographic wave of CEOs staying in their roles past traditional retirement age, combined with the increasing materiality of leadership quality to value, is creating an impending need for robust planning. 2. Drive strategic board refreshment and composition: A persistent gap between the need for new board skills and the slow pace of director turnover is creating strategic vulnerabilities and attracting activist attention. 3. Build resilience in the context of geopolitical and economic volatility: Escalating geopolitical and economic uncertainty are the paramount risks for boards for the third year in a row…. 4. Formalize AI governance and strategic oversight: A critical ‘discussion vs. action’ gap in AI oversight is exposing firms to unmanaged risks and hindering their ability to capitalize on AI-driven strategic opportunities. 5. Proactively manage shareholder activism: Sustained, high-level activism is acting as a market-enforced penalty for governance lapses, making proactive board refreshment and strategic alignment the most effective defense.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
Board Practices for the Year Ahead, So Far
Evolving risks and expectations are reshaping how directors engage, oversee, and learn
“The responsibilities and expectations placed on corporate boards continue to evolve at an accelerating pace. Today’s directors are navigating a business environment shaped by a broader range of risks and fresh opportunities, while adopting new approaches to stewardship, governance, and oversight. The role of the modern board is expanding. Boards are expected to look beyond compliance by elevating oversight of strategy, risk, and performance, stepping into evolved roles as strategic leaders and stewards of enduring value. Directors are increasingly pivotal in guiding organizations through uncertainty to help foster growth and resilience amid disruptions such as economic and geopolitical shifts, digital transformation, and regulatory developments. Effective boards are often those that keep pace with these shifts, regularly evaluating not only what they oversee—with agenda design, committee coordination, and information quality—but also how they do so.” WALL STREET JOURNAL
What Boardroom Résumés Reveal About Fortune 100 Strengths and Blind Spots
An analysis of directors’ career paths suggests that while C-suite experience is everywhere, critical capabilities for navigating disruption may be less evenly distributed
“As businesses face volatility and market shifts, many corporate boards are having to make critical decisions amid heightened uncertainty to help top management deliver growth while strengthening resilience.... Having broader functional experience in the boardroom could help enterprises adapt more effectively to shifting market conditions. To assess that potential, we examined how directors’ career backgrounds may influence the capabilities of Fortune 100 boards, drawing on the last six leadership roles held by each director.... Directors with top C-suite experience are ubiquitous. Every Fortune 100 company CEO sits on the board, and more than half (53) also serve as board chair. Beyond the company’s CEO, every Fortune 100 board includes at least one director with CEO experience.... About two-thirds of Fortune 100 boards (67) include at least one director with a senior marketing background. A comparable number (65) include directors who previously worked as nonprofit executives, served as military officers, or held senior roles as government officials at the local, state, or federal level.” DELOITTE
The Hidden Risk in the Boardroom: Director Behavior
Boards often struggle not because of strategy or information gaps but because one director’s behavior disrupts how the group works
“It happens in every boardroom. Hours into a marathon meeting, the conversation on the critical strategy topics has not yet started, and that one director won’t stop circling around a minor issue no one else finds relevant. As discussions continue, the same director pushes back on every idea. Momentum stalls, focus blurs, energy dissipates, and frustration mounts. Good governance becomes harder than it needs to be…. We’ve identified three main types of difficult board members: passive passengers (who stay silent and hope to go unnoticed), dominators (who take control of every discussion), and misguided experts (who focus too much on details). Although they behave differently, they create the same issues: Decisions slow, dynamics are strained, and trust erodes.” HARVARD BUSINESS REVIEW
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