11/10/22 – Issue 7.93 – Your weekly news on all things board. 

Governance just keeps gaining in importance. New stats show that boards continue to diversify, with a greater percentage of women, underrepresented minorities, and first-time board members elected to public company boards than ever before. As they incorporate this new talent, boards are investing more in director onboarding and doubling down on their role as models and overseers of corporate culture. Meanwhile, Meta CEO Mark Zuckerberg, who benefits from a share structure that allows him majority control of decisions, accepts responsibility for layoffs of 13 percent or some 11,000 workers at the tech giant. Across the tech industry, lay-offs have claimed tens of thousands of jobs already this year.

In the Spotlight

Meta Lays Off 11,000, Zuckerberg Takes Responsibility

“Since Mark Zuckerberg founded Facebook in 2004, the Silicon Valley company has steadily hired more employees. At the end of September it had amassed its largest-ever number of workers, totaling 87,314 people. But on Wednesday, the company now renamed Meta began cutting jobs, and deeply. Meta said it was laying off more than 11,000, or about 13 percent of its work force... At one point last year, Meta was valued at $1 trillion. But the company has struggled financially this year as it has tried to move into a new business — the immersive world of the so-called metaverse — while also grappling with a global economic slowdown and a decline in digital advertising, the main source of its revenue…. Mr. Zuckerberg controls Meta through a special stock structure that effectively allows him alone to set the direction of the company. It also helps insulate him from the risk of outside investors forcing him out of power, unlike executives such as John Foley, from the fitness company Peloton, who had to step down after miscalculating the economic effects of the pandemic. Inside Meta, friction has been building over Mr. Zuckerberg’s financial commitments to the metaverse, two executives said.” THE NEW YORK TIMES

Layoffs at Salesforce, Many Others, Add to Painful Tech Contraction
“The bloodletting in big tech continues after a year of slowing sales and profits along with de facto valuation resets at the hands of an aggressive Federal Reserve…. Salesforce laid off close to 1,000 employees this week…. More than 70,000 jobs were eliminated across 400-plus companies globally in the last two quarters [ahead of the current quarter’s mass layoffs at Twitter, Meta and others], notes Battery Ventures.” YAHOO

Across the Board

Boards Put More Emphasis on Director Onboarding

“Companies are looking for new ways to get their directors up to speed—fast. In a rapidly changing political and business environment, board members have much more on their plates these days. They must figure out the impact of a host of novel challenges, everything from the Russia-Ukraine war to economic uncertainty to a heightened focus on environmental, social and governance issues. They often need and want specialized training to integrate into board dynamics and stay up to speed on the issues. At the same time, boards are looking further outside their old networks to tap candidates with a wider range of experiences and skills—and that means new members are less likely to have served on a public board before. Last year, 43% of public-company board appointments were filled by first-time directors, … So, a number of companies are trying new strategies to make sure their directors are up to the challenge—from assigning mentors to holding one-on-one meetings with the full management team to arranging visits to company facilities….” WALL STREET JOURNAL

A Third Of Board Seats Now Held By Women at Majority of S&P 500 Firms

“A majority of S&P 500 companies now report more than a third of their board positions are held by women…A super-majority of companies in the S&P 500 are now 25 to 40 percent female… meaning there are between three to five women on the board (the average S&P board is made up of 11 total members). More than 400 S&P 500 companies had at least three women on their board as of June 2022, up from 343 in 2020…This shift comes on the heels of a push to appoint more women and people of color to company boards. In 2020 Goldman Sachs said it wouldn’t take a company public unless there wasn’t at least one ‘diverse’ member on its board, a requirement that appears to have created more opportunities for women and minorities. BlackRock rolled out new diversity targets last December, asking U.S. companies to aim for a board that is at least 30 percent diverse, with at least two directors who identify as female, and one from an under-represented group.” OBSERVER

Pressure Is On For Boards to Lead on Corporate Culture

"Over the past several years, the values and cultures of business organizations have become increasingly important to employees and customers… The absence of positive values and some corrosive dimensions in corporate culture have recently played a part in the Great Resignation, Quiet Quitting and other labor market trends… Moreover, national regulators and large institutional investors are pressing companies and their boards to disclose some indicators on the quality of their cultures. The assumption is that corporate culture which has long been a relevant theme in both management studies and in leadership development can be a formidable tool to improve corporate governance…. “Board directors agreed that accountability, collaboration, trust, transparency and equal pay for equal work are key features of their firms’ cultures.” FORBES

Tyson CFO Drama Reveals a Critical Moment for Corporate Governance
“Being new on the job as a CFO means you’re in the spotlight, and it's time to make a good impression. But Tyson Foods Inc. CFO John R. Tyson, the son of the chairman of the company’s board of directors, is facing serious allegations a month into his appointment. Tyson, 32, was arrested this past weekend for public intoxication and criminal trespassing…Tyson was named EVP and CFO of the Arkansas-based meat company, effective Oct. 2. He is the son of board chairman John H. Tyson and the great-grandson of Tyson founder John W. Tyson. John R. Tyson previously served as the company's EVP of strategy and as chief sustainability officer…Tyson Foods may be a family-founded company, but it’s also a public company…The Tyson family owns 99.9% of its Class B shares, giving them the ability to outvote the Class A shareholders 10-1, and shareholders know the family has the power.” YAHOO

Kohl’s CEO Michelle Gass Departs, Heads to Levi Strauss
“Kohl’s Chief Executive Michelle Gass is leaving the department-store chain early next month to join Levi Strauss & Co. with plans to have her take over as the jeans maker’s CEO. At Kohl’s, Ms. Gass has been under attack from activist investors for sales declines and a steep drop in the company’s stock price. In September, activist investor Ancora Holdings Inc. urged the company to replace Ms. Gass and its chairman…Kohl’s appointed Tom Kingsbury to serve as interim CEO until a permanent successor is named. Mr. Kingsbury is a former Burlington Stores Inc. CEO who joined Kohl’s board in 2021 as part of a settlement with activists.” THE WALL STREET JOURNAL

From the Boardspan Library

Refreshing Your Board of Directors

"Corporate boards tend to change themselves during times of crisis but otherwise accept the status quo. What if boards instead built regular, structured ‘refreshing’ of their membership, their processes, and their future needs into regular operations? What if boards went even further, not asking themselves ‘Do we need to change?’ but rather ‘What will we change?’ ‘Refreshing your board’ is a new phrase in the lexicon of corporate governance. Yet the phrase is already widely recognized among directors. For most, it evokes heightened expectations of a board’s competency and preparedness to govern…The continuous improvement of board capability encompasses a number of dimensions: composition, leadership, cultural dynamics, governance policy, education, meaningful board evaluation, succession, and most critically, the board’s strategic impact. Refreshment is expected to equip boards to fulfill compliance, fiduciary duties, plus deliver competitive advantage to the enterprise.” THE CORPORATE BOARD via BOARDSPAN

Seat at the Table 

• Global insurance company AIG welcomes to its board Paola Bergamaschi, former Regional Senior Managing Director at investment firm State Street Global Markets
• PGA of America elects to its board Gideon Yu, Co-Owner of the San Francisco 49ers
• Semiconductor company Arm welcomes to its board Tony Fadell, former VP at Apple
• Verizon appoints to its board Vittorio Colao, former CEO of global mobile communications company Vodafone Group
• Travel company Expedia Group adds to its board Henrique Dubugras, Co-founder and Co-CEO of corporate card management company Brex
• Athletic apparel company Lululemon elects to its board Isabel Ge Mahe, VP and Managing Director of Greater China for Apple
• Sales engagement platform Groove appoints to its board Mohit Lad, General Manager of network intelligence company Cisco ThousandEyes
• Enterprise technology company NCR elects Joe Reece, Co-Managing Partner at investment firm SilverBox
• Cloud software company Intapp adds to its board Martin Fichtner, Head of West Cost (U.S.A.) and Deputy Head of Technology and Consumer at global investment company Temasek
• Specialized equipment manufacturer Astec welcomes to its board Mark Gliebe, former Chairman and CEO of global manufacturer Regal Rexnord; and Nalin Jain, President of Digital Electronics at digital solution company Wabtec
• Bank holding company Stock Yards Bancorp elects to its board Allison Donovan, Member at legal firm Stoll Keenon Ogden
  
  

About Boardspan
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