Under Pressure: How Boards Are Managing Activists, Volatility & Risks
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5/1/25 – Issue 10.17 – Your weekly news on all things board. 

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Another week, another spate of activist investors seeking board seats and influence over management decisions at public companies. Lyft aims to rebuff Engine Capital, which is pushing for the rideshare company to undertake a strategic overhaul—and possibly a sale—and has called out the board for an alleged lack of experience and financial acumen. Meanwhile, Match Group and IAC both opted to compromise with activists, each adding new directors in response to investor demands. Public companies are feeling pressure from all sides, with economic and policy shifts scrambling supply, demand, planned capital investments, deals, and now even the ability to provide financial forecasts. The global uncertainty is also focusing shareholder attention on board-level risk oversight and the ability to anticipate emerging threats. And in an unusual governance showdown, the Corporation for Public Broadcasting is taking legal action against a presidential attempt to oust board members—highlighting fundamental questions of board independence, in both public and private sectors.

In the Spotlight

 

Engine Capital Pushes Lyft to Explore Strategic Options

Engine said on Tuesday that its director nominees would encourage Lyft's board to explore strategic alternatives that could lead to the sale of the company as a whole or in parts

 

“Activist investment firm Engine Capital wants Lyft to consider strategic alternatives, including a sale, piling more pressure in its proxy battle against the ride-sharing platform. The investor, which owns about 1% of Lyft, also accused the company's board of lacking financial expertise, saying seven of its 10 members did not have much prior experience as directors of public companies. Earlier this month, Engine nominated two directors to the board of Lyft and said its attempts to engage with the ride-hailing company's leadership were rebuffed…. The company's shares have fallen about 83% since its initial public offering in 2019, compared with sharp gains at larger rival Uber Technologies.” REUTERS

 

Match Settles Dispute with Anson Funds

Anson was pushing to elect three directors to shake up what it called an outdated and insular board

 

“Online dating company Match Group will add a consumer-technology executive to its board and lay the groundwork for all directors to stand for election annually, ending a dispute with shareholder Anson Funds…. Anson and other investors had also criticized Match's practice of having only a certain number of directors stand for election annually, a practice that has become a flash point in governance circles because shareholders generally want all board members to stand for election annually…. Match joins a growing list of companies that have found common ground with critical investors at a time when volatile markets and uncertain policy directives from the White House are forcing them to pay even closer attention to their business, clients and shareholders.” REUTERS

 

IAC Adds New Board Member After Activist Buys into Barry-Diller Led Conglomerate

IAC says that Tor R. Braham will join its board after “constructive” talks with Arkhouse

 

“IAC has an activist investor, and will add a new board member after engaging in talks with the investment firm. The Barry Diller-led conglomerate [which owns a major stake in MGM Resorts and the Dotdash Meredith publishing business, publisher of Better Homes & Gardens and People] says that Tor R. Braham will join its board after the company had ‘constructive engagement’ with the firm Arkhouse. The company also says that it will adopt a director resignation policy ‘for nominees who receive less than a majority of votes cast in uncontested director elections,’ a move that could portend further changes to the board down the line.” HOLLYWOOD REPORTER

 

 

From Boardspan this Week:

 

Effective Strategies for Recruiting Board Members: Three Common Scenarios

 

"Recruiting a new board member is a complex task. While many board seats were once filled through personal networks in a relatively ad hoc fashion, increasing governance demands and requirements have boards applying more rigor and discipline to recruiting board members, whether or not they use the services of a professional recruiter.” BOARDSPAN

 

Across the Board

 

Trade-War Uncertainty Prompts Wave of Companies to Yank Forecasts

New poll shows more than 80% of senior executives are worried about tariffs and other policy shifts

 

“A new wave of major U.S. and European companies, including General Motors, JetBlue, Snap and Volvo, are warning that the trade war’s unknowable course and consequences make it futile to forecast future performance…. Pulling guidance can frustrate investors looking to evaluate companies, while making it harder for Wall Street to set its expectations. The reluctance to give financial forecasts also shows the degree to which executives lack visibility into the economy now….The renewed round of CEO warnings come after major companies, including American Airlines, PepsiCo and Procter & Gamble, said last week that big-ticket items could soon cost more, travel and entertainment were becoming an early casualty of the trade war and companies were trying to significantly cut costs. Two of Europe’s largest banks on Tuesday set aside more money for soured loans and forecast scenarios where higher tariffs could hurt the global economy.” WALL STREET JOURNAL

 

Increased Uncertainty is Testing Boards’ Risk Readiness

Any cracks or deficiencies in what boards have outlined to investors will be scrutinized this year as the reality of global trade wars, supply chain disruptions and recession fears have spooked investors

 

“In times of economic turbulence and great uncertainty, the corporate governance systems that boards have put in place are really put to the test. Heightened levels of uncertainty in 2025 are placing directors under increasingly greater pressure to prove that their plans for their company’s growth are credible, adaptable and sustainable…. Good governance requires that the board and management have a process that allows the organization to discuss and resolve these types of difficult issues. This year should test whether companies have a good process to identify risks or whether they need to improve it.” CORPORATE BOARD MEMBER

 

Emerging Risks and the Internal Audit Function 
The volatile and fluid nature of our current risk landscape requires vigilance from boards, management and internal audit

 

“When it comes to assessing and navigating the risk environment, an internal audit is the board's most trusted ally. An integral part of the company's risk management system, the role of the internal audit function is to keep a close pulse on emerging and ‘under the radar’ threats. For boards of public companies, leveraging an internal audit is critical both for operational risk management as well as for fulfilling oversight obligations… When speaking to an audience of senior internal auditors recently about the risk environment in North America, 70% said they expected the risks their organizations face to significantly increase in the next two years. Not one person predicted a decrease.” DIRECTORS & BOARDS

 

What are Boards Missing Beyond Risk Reports 

Boards must also take ownership of their informational needs

 

“High-profile risk management failures have continued to attract regulatory and investor scrutiny, with boards of directors increasingly in the spotlight. While operational losses and reputational damage have historically been tied to management decisions, oversight bodies are now more frequently called to account for shortcomings in governance. Investments in risk management capabilities have grown significantly across sectors. Yet despite these efforts, recent incidents suggest that many organizations still face fundamental challenges in board-level risk oversight.” INSURANCE BUSINESS

 

Public Companies Preparing for Shareholder Activism
There is no free pass from activism during periods of significant market disruption, even where the primary drivers are macroeconomic and outside the company’s control

 

“As public companies navigate a landscape marked by rapid and substantial market volatility, regulatory uncertainty and geopolitical shifts, there is growing concern inside boardrooms that these same factors may increase vulnerability to a more familiar threat: shareholder activism. Whether or not catalyzed by this uncertainty, activists remain persistent. Through the first few months of 2025, the drumbeat of activist campaign launches has surpassed the highs of recent years. While some investors are hitting “pause” on making large new investments, others (including activist funds) are seizing opportunities to invest in high-quality companies at attractive valuations.” KIRLAND & ELLIS

 

The Hidden Risks of Delegating Routine Tasks to AI
The goal should not be to resist AI but to integrate it in a way that preserves leadership influence and strengthens the board chair’s strategic objectives

 

“Power-conduit tasks, such as setting meeting agendas and establishing board committees, may appear routine but are vital for enabling leaders to exert their influence.... Leaving the task of creating the agenda to AI—based on, for example, how long each item has taken to discuss in the past—completely bypasses the chair’s strategic thinking. The chair also exercises behind-the-scenes influence over the flow of information that AI cannot easily replicate. They guide how information is presented, manage who speaks and when, and ensure people interact constructively.” HARVARD BUSINESS REVIEW

 

Kohl’s Terminates CEO for Cause After Investigation

Investigation found Ashley Buchanan violated company policies related to conflicts of interests with certain vendors

 

“Kohl’s fired its chief executive Ashley Buchanan after it discovered he had instructed the retailer to enter into a 'highly unusual' business deal involving a woman with whom he has had a romantic relationship... Buchanan met Chandra Holt, when they were both working at Walmart several years ago. Buchanan went on to run crafts chain Michael’s and took over as Kohl’s CEO in November. Holt went on to become the CEO of Bed Bath & Beyond. She is now a consultant and the founder of Incredibrew, a coffee brand infused with vitamins and minerals.... The filing said he directed the retailer to conduct business with this vendor and he caused the company to enter into a multimillion-dollar consulting agreement, where that person was part of the consulting team. Kohl’s said Buchanan didn’t disclose this relationship as required by its code of ethics and determined the conduct in both cases constituted cause for termination.” WALL STREET JOURNAL

 

Corporation for Public Broadcasting Sues Trump After Attempt to Fire Directors

President Trump tried to fire three of the five board members

 

“President Trump opened up a new front in his assault on public media on Monday, asserting that he was removing three of the five board members of the Corporation for Public Broadcasting. The corporation sued Trump on Tuesday morning in response, pointing to federal law and a U.S. Supreme Court ruling to contend that he does not have the power to take these actions. At a court hearing Tuesday afternoon, U.S. District Court Judge Randolph D. Moss ordered both sides to file arguments on CPB's motion for a temporary restraining order that would prevent Trump's decree from taking effect until the case was fully heard…. Under the law that created CPB more than five decades ago, the president has the authority to appoint members of its board, in consultation with Senate leaders of both parties. The law does not, however, establish any authority for a president to remove them.” NPR

 

Tesla Chair Denies Plans to Look for New CEO to Replace Musk

WSJ reports EV maker's board contacted search firms for Musk replacement about a month ago

 

“Tesla chair Robyn Denholm on Thursday denied a Wall Street Journal report that said board members had reached out to executive search firms to find a new replacement for CEO Elon Musk…. Denholm said on X that the report was ‘absolutely false’ and said that the EV maker's board is ‘highly confident’ in Musk's ability to ‘continue executing on the exciting growth plan ahead’… Musk said last week he would cut back significantly on the time he devotes to the Trump administration and spend more time running Tesla.” REUTERS

    Seat at the Table

    • Autodesk elects to its board Jeff Epstein, Operating Partner and Head of Corporate Development at Bessemer Venture Partners; and Christie Simons, former Senior Partner at Deloitte

    • Match Group announces to its board Kelly Campbell, former President of Peacock

    • Sallie Mae adds to its board Dr. Daniel Greenstein, Managing Director of Higher Education at Baker Tilly; and Gary Millerchip, EVP and CFO of Costco Wholesale Corporation

    • Southern Company Gas appoints to its board Venessa Harrison, former President of Southeast Coastal States at AT&T

    • Agricultural sciences firm FMC Corporation elects to its board Steven Markt, former President of Transportation Solutions at TE Connectivity

    • Novavax welcomes to its board Charles Newton, CFO of Lyell Immunopharma

    • Cardiol Therapeutics nominates to its board Dr. Timothy Garnett, former Chief Medical Officer at Eli Lilly

    • Wellness firm Herbalife elects to its board Lynda Cloud, former CEO of the Institute for Integrative Nutrition

    • Bragg Gaming Group adds to its board Holly Gagnon, former President of HGC Hospitality Gaming Consulting

    • Utility firm Exelon welcomes to its board Paul Bowers, former Chair and CEO of Georgia Power

    • Industrial tech firm Kennametal appoints to its board Shelley Bausch, former President of Global Industrial Coatings at Axalta

    • BioCryst Pharmaceuticals elects to its board Steve Frank, Chairman of Global Healthcare Investment Banking at J.P. Morgan

    • Foghorn Therapeutics announces to its board Dr. Neil Gallagher, President and Head of Research and Development at Syndax Pharmaceuticals; and Stuart Duty, former Senior Managing Director at Guggenheim Securities

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