10/31/24 – Issue 9.41 – Your weekly news on all things board. 

As Halloween arrives and the corporate world stirs under a thinning veil, boardrooms echo with winds of unrest and transformation. This week, Douglas Elliman’s board pushed for CEO Howard Lorber’s exit, launching an investigation into a workplace culture haunted by past misconduct. Meanwhile, at Estée Lauder, the succession spell is cast, with veteran Stéphane de La Faverie ascending to the CEO role while CEO candidate Jane Lauder, the founder’s granddaughter, will leave her executive role, indicating a preference for familiarity over family. And, at Pfizer, CEO Albert Bourla faces a cauldron of criticism, notably from Starboard’s Jeff Smith, regarding growth and accountability. This week’s headlines raise an interesting question in corporate governance: should a company consider its own directors as CEO candidates? As leadership dynamics shift and oversight of company culture moves up the boardroom broomstick, we wish you a safe and spooky Halloween!

In the Spotlight

Douglas Elliman Board Pushed for CEO Howard Lorber’s Exit Amid Culture Concerns

Board committee opened investigation into brokerage’s workplace after allegations of sexual misconduct by two former star agents

“Howard Lorber, chief executive of Douglas Elliman, was pushed by directors to resign after an investigation raised concerns on the board about a sexually charged work culture… Lorber, who has led the firm for two decades, stepped aside on Monday as chairman and CEO of one of the country’s biggest real-estate brokerages… In recent weeks, Elliman’s board formed a special committee in part to examine the firm’s workplace and employee accusations of sexual assaults by two former brokers, brothers Tal and Oren Alexander.” WALL STREET JOURNAL

From Boardspan this Week:

What's on the minds of Nominating & Governance Chairs?

From crisis preparedness to AI expertise to board succession planning, the NGC is covering a lot of ground. Learn what we're hearing from high-performing boards and get actionable tips to prepare your board for the future.

Across the Board

Estée Lauder Succession Drama to End with Insider Pick
Stéphane de La Faverie will be CEO, and Jane Lauder will leave executive role

“The succession drama at Estée Lauder is ending with an insider getting the top job, but it isn’t a member of the fractious founding family. The board has picked one of the cosmetics maker’s longtime senior executives, Stéphane de La Faverie, to take over as chief executive officer and lead an effort to revive sales… Jane Lauder, who was among the potential CEO candidates, told staff in a memo that she would step aside from her executive role at the end of the year. Jane Lauder is a longtime company executive and granddaughter of the founder.” WALL STREET JOURNAL

Pfizer CEO, Under Fire, Will Do ‘Whatever It Takes’ to Grow
Bourla’s attempting to counter the blistering critique from Starboard’s CEO Jeff Smith

“Pfizer Inc. Chief Executive Officer Albert Bourla said he’ll do “whatever it takes” to keep profits growing, including further cost cuts, as he seeks to fend off allegations of mismanagement from activist investor Starboard Value LP…. Smith, whose firm has reportedly taken a $1 billion stake in the drugmaker, has also said replacing Bourla ‘could make sense.’” MINT

Should Your Next CEO Come from Your Board?

These days a growing number of companies are hiring their directors to be their new CEOs

“When a company gives the CEO job to one of its own board members, people often assume that something must have gone wrong behind the scenes. Maybe the company is desperately trying to get itself out of a protracted period of tumult… Maybe the CEO’s departure was routine and expected, but somehow the succession-planning process just came up short.” HARVARD BUSIENSS REVIEW

How Can Boards of Directors Improve Their Effectiveness?
CEO leadership development and succession planning remains a critical area of focus for boards

“The business landscape is experiencing large disruptions, including climate change, energy transition, artificial intelligence and geopolitical tensions. Companies need to adapt quickly and effectively to these disruptions to survive. Boards of directors have the duty to help their companies and work with the CEO and senior management to steer the company and contribute to its long-term development and value creation in a sustainable manner.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

What Does ESG Mean for a Director?
Directorships are in transition; new legal and financial risks confront businesses, demanding urgent attention

“Boards are at the helm to ensure proper carriage of their companies’ environmental and social initiatives. They often have to embed ESG considerations into their decision-making processes, to take in the divergent interests of a broad set of stakeholders, including suppliers, customers, employees and local communities. These stakeholders increasingly expect directors to integrate sustainability into the company’s strategic planning, risk management processes and investments.” BUSINESS TIMES

Seat at the Table

• Albertsons Companies elects to its board Stephen Feinberg, Co-CEO of investment adviser CCM

• 23andMe appoints to its board Andre Fernandez, former CFO of WeWork; Jim Frankola, former Finance Chief at data cloud firm Cloudera; and Mark Jensen, former CFO at Redleaf Group

• Lumen Technologies adds to its bard Chris Capossela, former Chief Marketing Officer at Microsoft

• Kraft Heinz announces to its board Debby Soo, CEO of OpenTable

• Advanced infrastructure firm Valmont welcomes to its board Deborah Caplan, former EVP of Human Resources & Corporate Services at NextEra Energy

• Manufacturing firm Gibraltar Industries elects to its board James Metcalf, former Chairman, President, and CEO of construction material firm USG 

• Energy drink maker Celsius adds to its board Israel Kontorovsky, CFO of PepsiCo LatAm

• Quantum computing firm D-Wave announces to its board John DiLullo, CEO of security platform Deepwatch; and Rohit Ghai, CEO of identity management firm RSA

• Proficient Auto Logistics welcomes to its board Brenda Frank, Group Senior Vice President of Human Resources and Buying Offices at Ross Stores

• APA Corporation elects to its board Kenneth Fisher, former EVP and CFO of Noble Energy

• Energy firm Unitil Corporation adds to its board Jane Lewis-Raymond, Principal of strategic consulting firm Hilltop Strategies

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.