3/23/23 – Issue 8.10 – Your weekly news on all things board. 

The Silicon Valley Bank story continues to develop. This week, Janet Yellen weighs in on federal government intervention, and governance lessons learned from the collapse. 

In other news: Dominion lawsuits hold Fox’s board accountable; Amazon announces 9,000  layoffs;  A new CEO takes the helm at Starbucks; GE cuts CEO stock awards citing company underperformance; and a look at the real cost of sexual harassment in the workplace. 

In the Spotlight

U.S. Could Move to Protect Deposits

Janet Yellen says that federal intervention for banks is not off the table. 

“Ms. Yellen delivered remarks at a gathering of the American Bankers Association in Washington as she and other federal officials try to shore up confidence in the U.S. banking sector after the collapse of Silicon Valley Bank and Signature Bank. Ms. Yellen and other federal regulators used emergency powers to guarantee uninsured deposits at SVB and Signature, while also setting up a new Federal Reserve lending program to allow banks to meet withdrawal requests.” THE WALL STREET JOURNAL

Governance Lessons in the SVB Collapse
SVB’s failure may accelerate the focus on closer board oversight of management and operations. 

“The underlying causes that contributed to the Silicon Valley Bank failure are still being investigated. Whether, and to what extent, corporate leadership was complicit in the collapse will similarly take time to confirm. But there’s enough known right now to inform corporate board practices across industry sectors, not just those in banking and finance.” FORBES

From Boardspan this Week:

Getting Serious About Corporate Misconduct

For decades, a prolific cycle of corporate misconduct and in response, high ethical goal setting, has continually repeated. It is time to get serious about breaking that pattern.

"Corporate boards and CEOs talk about business ethics and reducing corporate misconduct. They sometimes voice their concerns and try to develop approaches that might work. Yet it seems that every day there is a new corporate scandal that headlines the news—and, board members worry that the next one will be at their company.” THE CORPORATE BOARD via BOARDSPAN

Across the Board

Amazon Announces Layoffs

Amazon again decreases worker count as it looks to streamline costs.

"Amazon will lay off 9,000 more employees in the coming weeks, CEO Andy Jassy said in a memo to staff on Monday. The cuts are on top of the previously announced layoffs that began in November and extended into January. That round totaled more than 18,000 employees, and primarily affected staffers in its retail, devices, recruiting and human resources groups.” CNBC

Fox Corp’s Board Exposed to Defamation Suits

Will Fox Corp. board members bear the financial burden if Dominion wins in court? 

“Two high-profile lawsuits against Fox News over its coverage of the 2020 presidential election aftermath are spurring questions about how much responsibility Fox’s board of directors would bear for a court loss. Voting-device manufacturer Dominion Voting Machines and global voting technology company Smartmatic USA are suing Fox Corp. for $1.6 billion and $2.7 billion, respectively, for allegedly blaming them for former President Donald Trump’s loss.” BLOOMBERG LAW

GE Board Cancels CEO Stock Awards

CEO Larry Culp and other executives will not receive millions in equity awards as the company fails to meet performance thresholds.  

“General Electric Co. said it canceled stock awards for Chief Executive Officer Larry Culp originally valued at $20 million, saying the company had failed to reach minimum performance thresholds necessary for the executive to take full title to the shares. The move, made by the board last month, wiped out $5 million of the $8.2 million in total compensation the company reported for Mr. Culp for 2022, as well as a tranche of shares originally valued at $15 million when it was awarded in 2020. The company also canceled equity awards for the same years for other top executives.” THE WALL STREET JOURNAL

Starbucks Serves Up a New CEO

Laxman Narasimhan will need to tackle unionization and other challenges.

“Starbucks Corp. said it handed the reins of the world’s largest coffee chain to its incoming chief executive officer, Laxman Narasimhan. The Seattle-based company said that interim CEO and longtime leader Howard Schultz exited the role Monday, with his successor officially taking over and joining the company’s board. Starbucks previously had said that Mr. Narasimhan would begin in his role on April 1.” THE WALL STREET JOURNAL

Study: The Cost of Sexual Harassment

It’s more financially damaging than previously thought.

“How much does workplace sexual harassment damage company value? Evidence from a new study suggests it’s more than you might think – a lot more. Until now, researchers have approached the question by measuring the short-term stock market reactions around public revelations of sexual harassment scandals. This line of research documents an immediate shareholder value loss of 0.6 percent to 1.5 percent of market cap. But the short-run market reaction may vastly understate the cost of sexual harassment.” CORPORATE SECRETARY

Webinar Next Week: The Board and the CEO with Tarang Amin of e.l.f. Beauty

There’s still time to register for next week’s webinar, where you can bring your questions for Boardspan CEO Abby Adlerman and Tarang Amin, Chairman and CEO of e.l.f. Beauty, as they talk about building a strong partnership and the powerful relationship between the board and the CEO.

The Board and the CEO: How a Strong Partnership Leads to Success

Wednesday, March 29

2pm ET

Seat at the Table

• Cruise line Royal Caribbean Group welcomes to its board Rebecca Yeung, Corporate VP of FedEx Corporation

• Paramount Global elects to its board Dawn Ostroff, former Chief Content Officer at Spotify

• Vapor product developer Kaival Brands appoints to its board Barry Hopkins, former Senior Vice President of Executive Organizational Development of Turning Point Brands; David Worner, Chief Executive Officer & Founder of accounting advisory firm GrowthPath Partners; and Mark Thoenes, Interim Chief Financial Officer of Kaival Brands

• Powertrain firm Hyliion Holdings Corp welcomes to its board Rodger Boehm, former Senior Partner at management consulting firm McKinsey & Company; Richard Freeland, former President and Chief Operating Officer at Cummins; Melanie Trent, former EVP, General Counsel and Chief Administrative Officer at drilling services provider Rowan Companies

• Vehicle manufacturer Shyft Group elects to its board Pam Kermisch, Chief Customer Growth Officer at powersports manufacturer Polaris

About Boardspan
Boardspan is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, benchmarking analytics and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.