07/23/26 – Issue 11.29 – Your weekly news on all things board. 

This past week offered another reminder that governance remains more layered than ever. The most important decisions often create a ripple effect, carrying strategic, operational, legal, regulatory, workforce, investor, and competitive implications. That’s a long list for boards to consider! Case in point: Paramount’s proposed Warner Bros. deal, complex to begin with, has now snowballed into shareholder litigation, regulatory scrutiny, financing challenges, and execution risk. Investors are stirring the pot elsewhere, reinforcing their expectations for board accountability; a recent analysis of proxy filings shows that governance proposals focused on shareholder rights and board accountability are on the rise. Of course, a rare week goes by without something to read about in the AI space. New model capabilities, increasing costs, expanding use cases, and board composition are all evolving at a breakneck pace. OpenAI’s appointment of two new independent directors ahead of a potential IPO reminds us that governance resonates with investors, underscoring once again that governance matters to investors. The issues may differ, but the lesson is the same: effective governance means looking across every layer.

In the Spotlight

The Deal Hits a Snag

Paramount's merger with Warner Bros. is temporarily blocked by the courts, highlighting an abundance of risks

“The proposed $81 billion merger of Paramount and Warner Bros. Discovery hit its first significant speed bump Monday when a federal judge in California granted a temporary restraining order that prohibits the companies from closing the deal. The court said that during the pause it would consider whether the merger should remain blocked pending the resolution of an antitrust challenge brought by a dozen states. The 14-day restraining order means Paramount will fall short on its hopes to have the deal closed before the end of the month…. In her ruling, U.S. District Judge Araceli Martínez-Olguín said the combination of the two film studios’ market share of theatrical movies has persuaded the court ‘that it can presume the proposed merger is likely to violate antitrust laws.’ The ruling is a first step toward potentially granting a preliminary injunction that would essentially stop the merger from proceeding during the case…. If the litigation extends beyond the end of September, the delay could become costly for Paramount.” WALL STREET JOURNAL

The Deal Becomes a Liability

A shareholder derivative lawsuit alleges directors breached their fiduciary duties in pursuing its proposed merger

“Paramount is pushing back on a recently filed shareholder lawsuit, saying it ‘recycles allegations that have already been reported and already addressed.’… A Paramount Skydance shareholder has filed a derivative lawsuit against officers and directors of the company alleging breach of fiduciary duty in its pursuit of Warner Bros. Discovery, the latest in a string of legal actions seeking to derail the merger…. It centers on claims of trading editorial independence for regulatory approval by the Trump administration…. It says an alleged ‘illegal bribery scheme in breach of their fiduciary duties of loyalty to Paramount and otherwise in violation of bedrock Delaware corporate law’ has damaged the company’s reputation and risks potential liability in the future…. A derivative lawsuit is filed by a shareholder on behalf of a corporation against directors, officers, or other parties that have harmed the company by breaching their duties.” DEADLINE

From Boardspan this Week:

Trust Has Become a Strategic Advantage

As governance becomes more complex, effective oversight increasingly depends on strong board-management relationships. The 2026 Boardspan Board Performance Benchmark Report found this area improved by more than 20 percentile points, suggesting many boards are creating the conditions for more candid dialogue, better information flow, and stronger oversight.

Across the Board

Shareholder Rights and Board Accountability Remain Fashionable

While shareholder proposals fell to a five-year low, governance resolutions are on the rise

“As the 2026 U.S. proxy season draws to a close, both the volume of shareholder proposals brought to a vote and the level of investor support they received show a dramatic change from previous years in the shareholder proposal landscape…. Against these backdrops, the overall volume of shareholder proposals submitted and advanced to a vote has declined to a five-year low. While the overall volume of proposal submissions and those appearing on the final ballot declined, governance-related proposals recorded an increase in overall volume. This relative resilience highlights the continued prioritization of core shareholder rights and board accountability mechanisms among investors as well as changes in proponents’ tactics…. Governance proposals commanded the highest support levels, averaging 31.4% support in 2026 and significantly outperforming all other proposal categories despite a modest year-over-year decline…. Independent board chair proposals, which were the most prevalent shareholder proposal category in 2026, experienced a significant resurgence in volume following two years of declining activity.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

AI To The Next Level

Boards turn their focus to whether AI creates long-term value, strengthens competitive advantage, and earns stakeholder trust

“Today, boards are not just asking about compliance. They are asking whether leadership can effectively leverage AI to create long-term value, strengthen trust, and prepare the organization for what comes next. This shift matters enormously for CEOs. The shift I’ve noticed most: boards used to start and end the AI conversation with risk. Now they evaluate risk hand-in-hand with strategy and opportunity…. Boards are not looking for perfect answers. They are looking for open dialogue with management about what AI will and will not do, where the company will compete and differentiate, and where it will move more cautiously…. Boards do not expect CEOs to know everything about AI…. What they do expect is transparency…. As AI moves from pilots to deployment at scale, governance can be the difference between scaling and stalling.” WALL STREET JOURNAL

How Much is Too Much?

Spending is on the rise although it is unclear whether investors’ patience is, as well

“Alphabet Inc. raised its capital spending forecast to as much as $205 billion this year, reigniting concerns about a lack of fiscal discipline in the race to dominate artificial intelligence. Alphabet was the first of the big tech companies to report quarterly results. Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc. follow next week. Altogether, the four companies telegraphed in April that they’d be spending as much as $725 billion this year on their AI ambitions. If Alphabet is any indication, that sum will be larger by the end of next week. That’s even while the returns on those investments remain unclear.” LOS ANGELES TIMES

Who’s Asking the AI Questions?

Gartner warns that effective AI governance depends on directors consistently challenging management with the right questions

“AI is the top strategic priority for most CEOs — and investors, regulators and the public are paying close attention to how organizations use and deploy it. AI has evolved from an IT investment into a boardroom imperative. By 2028, at least one-third of business decisions will be made autonomously or semi-autonomously with AI agents… Meeting fiduciary duties will require proactive board oversight of AI strategy, deployment, performance, regulation and risk. Boards of directors that want to provide effective AI oversight need a structured, repeatable framework for assessing the organization’s use of AI…. The eight questions below are the ones boards should require management to answer on a recurring basis, with supporting metrics.” GARTNER

The Human Algorithm

Governing AI is about governing the people who implement it, adapt to it, and are transformed by it

“People have always been an organization's greatest asset, but they're also becoming one of its greatest sources of opportunity and risk. As companies navigate AI, changing workforce expectations and an increasingly complex talent pool, boards need leaders who understand the human impact of strategic decisions…. Board decisions about AI, organizational change, leadership succession, culture and workforce strategy all have significant talent implications…. Every major business decision today has a people dimension. AI fails without workforce readiness. Growth stalls without the right talent pipeline. Transformation breaks down when culture isn't considered. These are not HR problems. They are board-level risks…. Boards are making billion-dollar AI bets with no one in the room who understands how work actually changes. Talent strategy isn't downstream of technology strategy anymore. They're the same decision. Without the HR voice, you're not governing AI, you're just approving it.” FORBES

Boarding for Takeoff

OpenAI strengthens its board ahead of a potential IPO, reinforcing that who is on your board matters to investors

“OpenAI said it appointed longtime financial executives David Vélez and Robin Vince to its nonprofit and for-profit boards of directors, as the company marches closer to a prospective IPO. The appointments come as OpenAI, which is valued at more than $850 billion, gears up for a potentially massive initial public offering. OpenAI carried out a recapitalization in October that solidified its structure as a nonprofit…with a controlling stake in its for-profit business…. 'David and Robin are exceptional leaders who have used technology to reshape financial services and expand opportunity at global scale,' Bret Taylor, chair of the OpenAI Foundation and OpenAI Group PBC Boards, said. Altman was briefly ousted from his position as CEO in 2023, when the previous board members determined he was “not consistently candid in his communications.” Altman rejoined the company after a dramatic few days of negotiations, and he was reinstated on the board in March of 2024.” CNBC

Valuation Changes the Conversation

SpaceX's sharp share-price decline highlights how market value reshapes plans, including reported merger discussions

“SpaceX stock is down more than 5% on Wednesday following a recent rough patch…. Despite a nice pop on Tuesday, the rocket launch company's shares have shed 20% since early last week…. SpaceX stock sold off during the next trading session on Friday before hitting an all-time closing low of $119.85 on Monday…. SpaceX has shed over $1.1 trillion in market value…. The growth of its Starlink business, new AI compute deals, and spending on AI products like Grok will be closely watched by investors gauging the health of the company…. The performance of Tesla stock is noteworthy for SpaceX investors because Musk has reportedly discussed merging the two companies. A merger of SpaceX and Tesla becomes more difficult as SpaceX shares drop and Tesla shares jump: The belief is that SpaceX would be the acquirer, since Musk holds much more stock in the company than he does in Tesla. YAHOO FINANCE

Seat at the Table

•  Moderna elects to its board Michael McDonnell, former CFO at Biogen

• Target welcomes to its board Joe DePinto, former President and CEO of 7-Eleven, Inc.

• American Electric Power welcomes to its board David Marriott, Chairman of the Board of Marriott International, and Charles Meyers, Executive Chairman and former President and Chief Executive Officer of Equinix

• Royal Caribbean Group announces to its board the appointment of Tara Bunch, former Senior Vice President and Global Head of Operations at Airbnb

• International Paper elects to its board Katherine Collins, former Head of Sustainable Investing at Putnam Investments, and Lori Ryerkerk, former Chairman, President and CEO of Celanese Corporation

• Kontoor Brands welcomes to its board Tom Waldron, former EVP and COO at Kontoor

• Powerfleet appoints to its board Michael Casey, former SVP and CFO of Manhattan Associates

• Data capture company Socket Mobile nominates to its board Brent MacDonald, Partner at Rising Tide Fund Managers 

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’s focus is entirely on boards, delivering deep experience, objectivity, an analytical orientation, and insight-driven recommendations. Boardspan works with public, private and non-profit organizations across all verticals including consumer, healthcare, financial services, technology, industrials and non-profit. Specific clients include Archer Daniels Midland, Autodesk, Blue Shield (CA), Boston Beer Company, Colgate-Palmolive, e.l.f. Beauty, HubSpot, Ingersoll Rand, KKR, Lam Research, the PGA, Roblox, Salesforce, the USOPC, and scores more.