9/5/24 – Issue 9.33 – Your weekly news on all things board. 

The role of leadership in steering companies toward stability and growth is difficult, especially in today’s dynamic environment, and boards have a critical job to do in ensuring the right leaders and plans are in place. In this week’s news: the Intel board prepares to review a strategic plan that includes shedding assets and cutting costs to revive the struggling chipmaker, boards like that of Southwest Airlines face investor pressure to ensure they have the right strategy, and pundits raise questions about the qualities boards seek in hiring CEOs capable of orchestrating effective turnarounds. In all three scenarios, boards are focused on the intersection of strategy, leadership, and accountability as they help companies navigate the complexities of a fast-paced economy.

In the Spotlight

Intel Board to Consider Plans to Revive Chipmaker

Intel CEO to pitch board on plans to shed assets, cut costs

“Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company’s board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company’s once-sizeable profit.” REUTERS

Questions To Ask Before Time Runs Out on Your ‘Turnaround Plan’?

In the face of poor performance, most boards will not get a lengthy grace period to devise and implement a turnaround plan

“The recent letter sent by activist investor Elliott Management to the Southwest Airlines board of directors is a reminder that corporate boards do not have an unlimited amount of time to demonstrate that they are assisting management in the execution of a turnaround plan. Southwest shareholders expect the board to refresh its members with skilled and experienced directors who are capable of making significant adjustments that will improve company performance even in the most difficult economic environments. Since shareholders don’t believe that has happened, they are looking to replace two-thirds of the board.” CORPORATE BOARD MEMBER

What Boards May Look for When Hiring CEOs to Turn Around Companies

A board that thinks it could easily find someone who is already on the company payroll as the new leader of the organization should think again

“Starbucks’ recent decision to hire Brian Niccol, the chair and CEO of Chipotle Mexican Grill, as its fourth CEO in two years, underscores the challenges boards of directors can face when searching for the right people to help their struggling companies bounce back from a crisis. Depending on the problems that they are seeking to address, organization may consider a range of characteristics, credentials, and qualities when hiring a new CEO to help address and overcome challenges…. Although there are several key CEO competencies companies should keep in mind when considering candidates, some can be more important when trying to rebound from a crisis.” FORBES

From Boardspan this Week:

The 2024 Board Benchmark Report

The power of performance benchmarking is undeniable. For boards, it’s essential to understand how they stack up against peers, identify new trends and lean into the broader governance landscape. The 2024 Board Benchmark Report enables boards to build on successes and identify areas for improvement, ensuring continuous growth and effectiveness. Learn how your board compares and what you can do to achieve excellence.

Across the Board

The Tech-Forward Boardroom
Fostering richer boardroom conversations on technology

“Despite technology and telecommunications being the most common industry background for new directors, there is often still a gap in how well the board and technology leaders (chief information officers, chief technology officers, chief information security officers, etc.) are connecting on technology topics. Only 36% of board members surveyed report having full confidence in their technology leaders, and more than four in 10 C-suite executives say their board’s oversight of technology matters is not sufficient in either scope or depth.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

How CISOs Are Evolving from Tech Experts to Strategic Leaders
The rise of GenAI and other emerging technologies demands that CISOs continuously educate themselves and their teams to integrate these tools into their cybersecurity strategies effectively

“In the last decade, the CISO’s responsibilities have expanded dramatically. No longer just about managing firewalls and protecting data, CISOs now play a crucial role in corporate governance and risk management… Traditionally focused on safeguarding digital assets, CISOs are now key players in shaping business success by integrating cybersecurity into broader business strategies. Such a shift requires CISOs to align cybersecurity efforts with company goals, collaborate closely with senior leaders, and foster a continuous learning culture across the workforce.” FORBES 

Ford, Coors Light and Other Brands Retreat from a Gay-Rights Index

Human Rights Campaign used a ranking of companies to advance same-sex benefits; now an activist is using the index to pressure CEOs

“When Ford scaled back its diversity initiatives it called out one organization by name: the Human Rights Campaign. The automaker last week told employees it would stop providing workplace data to the gay-rights lobbying group, which spent decades persuading big companies to embrace policies hospitable to lesbian, gay, bisexual, transgender and queer employees and customers… The companies didn’t elaborate on why they highlighted HRC in their announcements. Nearly all of them had ranked well on an index that HRC uses to score companies by their LGBTQ-friendly policies. Some of the companies said they would stop sharing data with HRC after they had been targeted by social-media activist Robby Starbuck.” WALL STREET JOURNAL

Proposal to Separate CEO and Chair Garners Support at McKesson

Almost a quarter of shareholder votes have backed a proposal seeking a separate CEO and board chair at McKesson Corporation’s AGM

“The resolution, filed by activist shareholder John Chevedden, asked that McKesson’s board ‘adopt an enduring policy and amend the governing documents as necessary in order that two separate people hold the office of the [chair] and the office of the CEO… Chevedden writes in his filing: ‘The roles of [chair] and CEO are fundamentally different and should be held by two directors, a CEO and a [chair] who is completely independent of the CEO and our company. The job of the CEO is to manage the company. The job of the [chair] is to oversee the CEO. The ascending complexities of a company with $60 bn in market capitalization, like McKesson, increasingly demands that two [people] fill the two most important jobs on an enduring basis.” GOVERNANCE INTELLIGENCE

Opinion: Top Corporate Institution Strikes a Blow to Shareholder Primacy

While shareholder primacy became trendy in the 1980s, stakeholder capitalism goes back another two centuries

“Under modern business law, shareholders have a claim on the profits generated by a corporation, but that doesn’t equal control of the corporation’s decisions or its assets. Any Board of Directors is legally obligated to look out for the overall interests of the corporation, which includes all stakeholders. Yet most investors (and advocates for shareholder primacy) don’t realize or refuse to accept that, as the manifesto puts it, ‘It remains incumbent upon and entirely within the purview of boards of directors to exercise their reasoned business judgment in carefully balancing the interests of all stakeholders in order to create long-term, sustainable value.’” FORBES

French Billionaire Xavier Niel Joins Fated TikTok Board
The platform has become a point of contention between China and the West, particularly the US, which has threatened to ban it

“A social media enthusiast, Xavier Niel (an individual shareholder of Le Monde Group) is about to take part, from the inside, in the operations of one of the world's major web applications. At the end of August, the founder and shareholder of French telecoms operator Free Mobile joined the board of directors of Chinese company ByteDance, owner of social media platform TikTok… Founded in 2012, ByteDance established itself as one of China's leading social media companies with the Douyin video app, now used by over 750 million people in China every month.” LE MONDE

Seat at the Table

• General Motors announces to its board Alfred Kelly, former Chairman and CEO of Visa

• Lam Research appoints to its board Ita Brennan, former SVP and CFO of Arista Networks; and Mark Fields, Senior Advisor at global asset firm TPG Capital LP

• ConocoPhillips elects to its board Nelda Connors, former President and CEO of manufacturing firm Atkore International Group

• United Bankshares welcomes to its board Dr. Sara DuMond, Founder and CEO of Pediatric Housecalls

• Security firm Dynatrace appoints to its board Lisa Campbell, former CMO of OneTrust

• Medical device firm CVRx adds to its board Kevin Ballinger, former CEO of manufacturing firm Aldevron; and Mitch Hill, former CFO of Inari Medical

• Siyata Mobile elects to its board Campbell Becher, CEO of IberAmerican Lithium

• Construction firm Emeren appoints to its board Dr. Ramki Srinivasan, founder and CEO of strategy consulting firm Two Deg C

• Lifestyle brand J. Jill welcomes to its board Courtnee Chun, SVP of Investor Relations, Chief Portfolio Officer, and Senior Advisor at Liberty Media

• PTC elects to its board Rob Bernshteyn, former CEO and Chairman of Coupa Software

• Fred Hutch Cancer Center adds to its board Michelle Sietz, former Chair and CEO of Russell Investments

• MARA Holdings appoints to its board Janet George, former Corporate VP and General Manager of Data Center & Artificial Intelligence at Intel Corporation; and Barbara Humpton, President and CEO of Siemens USA

• Bolt Biotherapeutics elects to its board Dr. Jakob Dupont, Executive Partner of Private Equity at Sofinnova Investments

• Sub-meter resolution firm Satellogic welcomes to its board Kelly Kennedy, CFO of wearable pump firm Willow Innovations

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.