Across the Board
After 2020, Corporate Boards Show Racial/Ethnic Diversity Gains
“The summer of 2020 was a turning point in the push for corporate diversity and inclusion initiatives…Many companies pledged to do their part to address inequalities and, likewise, many investors began to seriously reflect on their racial and ethnic diversity policies. [Now] the results show racial/ethnic diversity increases on U.S. boards, both at large- and mid-caps. The … percentage of Russell 3000 companies with no racial/ethnic diversity on their boards went down from 38 percent in 2020 to 10 percent in 2022. The percentage of companies with one racially/ethnically diverse director increased slightly from 32 percent in 2020 to 35 percent in 2022. Additionally, the percentage of companies with two or more racially/ethnically diverse directors went up from 29 percent in 2020 to 55 percent in 2022.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
SEC Commissioner: ESG Central To Successful Decisions + 3 Tips For Getting It Right
“ESG issues were a hot topic and the subject of multiple sessions at the Society for Corporate Governance’s (SCG) 2021 New Era of Governance National Conference June. In the keynote opening speech, US SEC commissioner Allison Herren Lee said ESG issues have become central business considerations for corporate boards. … ‘Increasingly, boards of directors are called upon to navigate the challenges presented by climate change, racial injustice, economic inequality and numerous other issues that can be fundamental to the success and sustainability of companies, financial markets and our economy,’ Lee said. Boards that proactively seek to integrate ESG issues into their decision-making not only mitigate risks but also better position their companies and their business models to compete for capital based on sound ESG governance, Lee said. Three steps for boards working to maximize these opportunities and position themselves as ESG leaders include: Enhance board diversity… Increase board expertise…. Inspire management success.” IR MAGAZINE
ESG Reports Shouldn’t Replace Active Sustainability
“Many corporate leaders are growing frustrated that their ESG efforts are not being rewarded in capital markets. But that’s because they are focusing on reporting more than on doing sustainability. Can companies embed sustainability and make it a source of competitive advantage? Yes, but only if they make it part of strategy. To do that they should undertake SWOT analyses through a sustainability lens, look specifically for material ESG issues that are resulting in risks and opportunities for the company, and then undertake and track return on sustainable investment, setting benchmarks and tracking financial performance over time.” HARVARD BUSINESS REVIEW
20 Years On, Lessons To Be Learned From WorldCom’s Collapse
“A review of the WorldCom collapse yields some continuing lessons for corporate counsel [and boards of directors]…. The [court-appointed Bankruptcy Court] Examiner criticized the WorldCom board of directors for deferring to management on strategic planning and M&A targets and analysis. The report also criticized counsel – both internal and outside – for not pressing the board to consider its fiduciary duties with respect to these transactions, even while recognizing that the corporate culture was not supportive of a strong legal function…” JD SUPRA
Surprise Shift in VW Leadership
“Volkswagen’s CEO is leaving his post in a surprise move, effective September 1. The company announced Friday that CEO Herbert Diess will be replaced by Oliver Blume, the head of Volkswagen’s Porsche performance car division. Volkswagen, the world’s second largest automaker, did not provide a reason for Diess’ exit. But a Reuters report citing unnamed sources said the Porsche and Piech families, who between them own a majority of the voting rights in Volkswagen, pressed for a change at the helm… It was a busy and challenging tenure for Diess. He took the reins at Volkswagen in 2018, in the wake of its ‘diesel gate’ scandal that forced the company to pay massive US and European fines for deceptive emissions readings. Still, he was able to put that scandal mostly in the company’s rearview mirror. And he focused on electric vehicles more than many established automakers, positioning Volkswagen for a major shift.” CNN
Twitter Sets September Date For Shareholders to Vote On Musk’s Buyout
“Twitter has set Sept. 13 as the date for its shareholders to vote on the company’s pending buyout by Tesla CEO Elon Musk. The company said in a regulatory filing on Tuesday that it is recommending shareholders vote for the $44 billion deal to be completed. The date is ahead of the yet-to-be specified start date of the October trial in the dispute between the billionaire, who is seeking to abandon the deal, and the San Francisco company. Twitter has sued Musk in Delaware after he said wanted to walk away from the deal.” SAN FRANCISCO EXAMINER
After Frontier Deal Falls Through, Jet Blue To Buy Spirit Airlines
“JetBlue Airways has agreed to buy Spirit Airlines for $3.8 billion and create the nation’s fifth-largest airline if the deal can win approval from antitrust regulators. The agreement Thursday capped a months-long bidding war and arrives one day after Spirit’s attempt to merge with fellow budget carrier Frontier Airlines fell apart. Spirit CEO Ted Christie is being thrust into the awkward position of defending a sale to JetBlue after arguing vehemently against it, saying that antitrust regulators would never let it happen.” ABC NEWS
Investors Presses J&J To Split Chair and CEO Roles
“Trillium Asset Management has called for the separation of Johnson & Johnson's chairman and chief executive officer roles, currently held by Alex Gorsky, according to a regulatory filing by the healthcare conglomerate on Monday. The asset management firm said that an independent board chair can provide a balance of power between the CEO and the board…” NASDAQ
Instacart Founder and Executive Chair to Exit After IPO
“A year ago, Instacart co-founder Apoorva Mehta left his role as chief executive of the grocery delivery unicorn and took on an executive chairman position. Now, as the company he started nearly a decade ago prepares to IPO, Mehta says that he will be stepping down as executive chairman and transitioning off the board of directors once the company goes public…Instacart confirmed the news in a press release and said that Fidji Simo, a former Facebook executive who took over as CEO of Instacart when Mehta departed the role, will be the future executive chairman of the board…Instacart is clearly having an executive reshuffling of sorts. Prior CTO Mark Schaaf is leaving the company…Additionally, the U.S. grocery-delivery giant recently promoted Daniel Danker and Laura Jones, vice presidents of product and marketing, to chief product officer and chief marketing officer.” TECH CRUNCH
From the Boardspan Library
12 ESG-Related Topics Worthy of the C-Suite and Boardroom
“Environmental, social and governance reporting has come into its own as a discipline, with most companies now issuing sustainability reports…An estimated 95 percent of the S&P 500 published detailed environmental, social and governance (ESG) sustainability reports in 2019. Most of these reports were submitted in a stand-alone ESG, sustainability, corporate responsibility or similar report. Of the remaining 5 percent of the S&P 500, most companies published some high-level policy information on their website…Underpinning all this activity is the intensive emphasis on sustainability investing by fiduciaries, asset owners and asset managers…The pandemic and green recovery commitments in the U.S., the EU and China are expected to facilitate this continued growth in the capital markets.” BOARDSPAN
