1/16/25 – Issue 10.02 – Your weekly news on all things board. 

In a climate where the importance of diversity and inclusion is seeing significant challenges, boards find themselves at a crossroads, forced to rethink beyond compliance requirements and consider topics much trickier: their organizational values and how they want to broadcast them. Regulatory changes and recent high-profile decisions from corporate giants reflect juxta-positioned playbooks on how boards approach DEI initiatives. In Meta’s latest announcement, the tech giant decided to wind down its DEI programs, a move that has sparked concerns regarding the long-term implications for workplace culture and innovation within tech giants. Conversely, Apple and Costco are asking investors to reject anti-DEI proposals filed by conservative activist groups. The December decision by the Fifth Circuit to vacate the SEC's approval of Nasdaq's board diversity rules marks a significant shift and raises critical questions about the future of board composition and the metrics by which success is measured. The complex and often contentious dialogues surrounding inclusivity in the corporate sector require boards to navigate these changes thoughtfully, ensuring that their strategies go beyond regulatory frameworks and resonate with their core values and the communities they serve. The timing couldn’t be better for Boardspan’s just-released publication, providing boards with insights and highly actionable ideas to not only adapt but thrive in the year ahead.

In the Spotlight

Apple Asks Investors to Vote Against Anti-DEI Proposal

Board argues that it and management ‘maintain active oversight of legal and regulatory risks and compliance’

“Apple’s board is urging shareholders to vote at its February 25 AGM against a proposal asking the tech company to consider dropping its diversity efforts. The National Center for Public Policy Research, which filed the proposal, is one of the most active of the conservative groups that have been submitting anti-DE&I and other anti-ESG resolutions in recent years. In this case, the center directly requests in its proposal that Apple ‘consider abolishing its inclusion and diversity program, policies, department and goals.’ It notes the US Supreme Court ruling that effectively barred race-based affirmative action in college admissions programs.” GOVERNANCE INTELLIGENCE

Why Costco Isn’t Joining the Backlash Against DEI

Retail giant swats back at a conservative activist group, buoyed by loyal customers and staff

“In a steady parade of companies retreating from their diversity efforts, Costco Wholesale is standing out by holding fast. Ahead of its annual meeting next week, the warehouse retailer has urged its shareholders to reject a proposal to assess the risks that its diversity initiatives pose to the company’s stock price… At a breakfast gathering of big-company human-resources leaders in New York on Tuesday, several of them called Costco’s board statement a striking defense of DEI. One HR executive said the strength of Costco’s brand empowered it to make such a statement.” WALL STREET JOURNAL

Meta Ends Its DEI Programs

Meta is ending its DEI initiatives, becoming the latest company to pull back from such practices in the wake of pressure from conservative critics and customers

“Meta is eliminating the company’s DEI team, ending ‘equity and inclusion programs and changing hiring and supplier diversity practices,’ according to a company memo… The end to the DEI programs dovetails with other major changes at the company that critics say cater to the right since President-elect Donald Trump won November’s election. Earlier this week Meta announced it was ending its third-party fact-checking programs in the United States and changing its hateful conduct policies, adding new types of content users can now post on Meta-owned platforms that were previously banned.” CNN

And In Case You Missed It: Fifth Circuit Vacates Nasdaq Board Diversity Rules

Nasdaq-listed companies will no longer be required by Nasdaq to meet diversity targets for their boards or disclose why they do not do so

“The majority opinion in the Fifth Circuit decision stated that the SEC’s approval of Nasdaq’s Rules violated the Exchange Act on the basis that the SEC did not adequately explain how the Rules were connected to the purposes of the Exchange Act, which are (among others) ‘to protect investors and the macroeconomy from speculative, manipulative and fraudulent practices and to promote competition in the market for securities transactions.’ According to the majority opinion, disclosure regarding racial and sexual diversity is not sufficiently related to the purpose of investor protection.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

From Boardspan this Week:

How Boards Can Get Ahead in 2025

Here we are in 2025 with some exciting opportunities on the horizon albeit with big challenges to face. Our advice -- take them head-on! As you work through what is possible with your organizations, also plan for higher governance expectations, evolving stakeholder priorities, and unprecedented geopolitical uncertainties.

Across the Board

Tesla Directors Ordered to Return Funds to Settle Overpayment Claims
McCormick is the same judge who ruled against Tesla CEO Elon Musk’s exorbitant pay package 

“A Delaware judge has approved a settlement that will see Tesla directors — including Chair Robyn Denholm, Oracle founder Larry Ellison, Kimbal Musk, and James Murdoch — return up to $919 million to the automaker, officially resolving allegations that they overpaid themselves… The settlement concludes a 2020 lawsuit by the Police and Fire Retirement System of the City of Detroit that challenged director compensation from 2017 to 2020 as excessive. The directors will have to pay back stock and options worth up to $735 million and forgo three years of pay allegedly worth $184 million.” TECH CRUNCH

Hershey Reveals CEO Succession Plan
Hershey's board has appointed a committee to search for its next leader

“The Hershey Company announced that Michele Buck, chairman of the board of directors, president, and CEO has informed the board of her intention to retire from the company, effective June 30, 2026. Buck intends to serve in her existing roles until her successor is appointed, at which time she plans to resign from the board and transition to a senior advisor role until her retirement. The board has appointed a special committee to direct the search for the company's next CEO and will consider external and internal candidates, in partnership with a nationally recognized search firm.” SNACK AND BAKERY

OpenAI Appoints a Powerful Dealmaker to its Board

Billionaire investor Adebayo Ogunlesi joins the board as the artificial intelligence start-up pushes forward with moves to become a for-profit company amid rising competition from rivals

“Ogunlesi, co-founder of Global Infrastructure Partners, is known on Wall Street as a skilled investor who has counseled some of the world’s most influential companies, often at critical junctures. His appointment comes as San Francisco-based OpenAI is going through a huge corporate restructuring and expansion, as the start-up looks to supercharge its next phase of growth amid tougher competition. Ogunlesi, who sold GIP to BlackRock for $12.5bn last year, is the latest hire to the ChatGPT maker’s board, which was restructured following Sam Altman’s ousting by the company’s board and his subsequent reinstatement as chief executive in November 2023.” WALL STREET JOURNAL

EY Survey and Their Take on Board Priorities for 2025

Boards will prioritize scenario planning on geopolitical, economic, labor and climate outcomes to build resilience and enable agility

“In 2025, successful companies and their boards will not merely react to rapid changes; they will anticipate those changes, build the ability to sense and respond to various scenarios, and act with intention to be resilient and shape the future of their organizations. Boards will be faced with important choices, including how to structure agendas to spend time on the right issues; what types of data and information to request from management and external sources; whether and how to adjust committee structures or board processes; and how to make certain that the board’s composition is fit for purpose as strategies evolve.” EY

What’s Leading the 2025 Board Agenda?

Expect geopolitical disruption and acclimation to a new Presidential administration to be high on your board's list of talking points

“There will never be a shortage of emerging issues ripe for exploration in the boardroom, but as the calendar shifts to 2025, what are the concerns that will be dominating the discussion in the new year?... Boards also must consider the implications of new administration policy initiatives on tariffs, taxes, trade agreements and regulatory priorities. Engaging in scenario planning and stress testing will be crucial as boards and management teams evaluate how policy changes may affect the company's strategy and operations. Another area of focus is helping to ensure the company's data governance and cybersecurity frameworks have kept pace with increasingly sophisticated threats.” DIRECTORS & BOARDS

Do Annual General Meetings Still Work?

While board elections are one form of accountability, the ability to frame critical issues facing a company through proposals is an essential, efficient, and focused complement to the right of shareholders to vote for board members

“A central tenet of U.S. capital markets is that boards of directors of public corporations are accountable to their shareholders. The annual general meeting of shareholders (AGM) is, therefore, a critical once-a-year forum where shareholders can exercise their rights by engaging directly with the board and management, voting on directors, and deliberating on fellow investors’ proposals on significant issues facing the company.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

Seat at the Table

• Meta welcomes to its board John Elkann, Chairman and CEO of car manufacturer Stellantis

• OpenAI adds to its board Adebayo Ogunlesi, Senior Managing Director at BlackRock

• Delta Air Lines elects to its board Judith McKenna, former President and CEO of Walmart International 

• Warner Bros. Discovery appoints to its board Anthony Noto, former COO of Twitter; and Joey Levin, CEO of media firm IAC

• Carrier Global adds to its board Amy Miles, former CEO of Regal Entertainment Group

• The Federal Reserve Bank of New York designates Pat Wang, President and CEO of Healthfirst, as Chair; and Dr. Rajiv Shah, President of The Rockefeller Foundation, designated as Deputy Chair

• Foot Locker elects to its board Sonia Syngal, former President and CEO of Gap; and John Venhuizen, President and CEO of Ace Hardware Corporation

• Sallie Mae appoints to its board Henry Greig, former SVP and Chief Risk Officer for Retail Finance North America for GE Capital

• Corebridge Financial announces to its board Keith Gubbay, former Chairman of Resolution Life Group; and Dr. Colin Parris, former SVP and Chief Technology Officer at GE Digital

• Biopharmaceutical firm CalciMedica welcomes to its board Dr. Alan Glicklich, Chief Medical Officer of Nuvig Therapeutics

• Tactile Medical appoints to its board Laura King, former President & CEO of GE Healthcare

• Specialty coatings firm RPM International elects to its board Craig Morford, former General Counsel and Corporate Secretary at ExxonMobil Corporation; Christopher Mapes, former Chairman, President, and CEO of Lincoln Electric; and Julie Beck, SVP and CFO of Terex Corporation

• Serina Therapeutics adds to its board Karen Wilson, SVP of Finance at Jazz Pharmaceuticals

• Mineral firm Intrepid Potash welcomes to its board Gonzalo Avendano, Investment Advisor at Clearway

• Equitable Holdings appoints to its board Douglas Dachille, former Chief Investment Officer of American International Group

About Boardspan
Boardspan helps boards raise the bar on their critical governance mandates by combining cutting edge digital capabilities with high-touch consulting services. They are leaders in board assessments, individual director & CEO evaluations, board succession strategy & search, skills & composition analyses, and bespoke advisory work. Boardspan only works with boards, bringing deep experience, objectivity, an analytical orientation, and insight-driven recommendations. Clients include Blue Shield (CA), Colgate-Palmolive, Deckers, Dynatrace, elf Beauty, HubSpot, Ingersoll Rand, KKR, Lam Research, the PGA, Roblox, Salesforce, Synopsys, the USOPC, and scores more.