Director's Domain: Corporate Governance News & Board Insights
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March 28, 2024
In 2019, Dave Calhoun was hired at Boeing to help repair the reputation of the company after a pair of deadly plane crashes. This week, he resigns as CEO, plagued by many of the issues he was brought in to fix as Boeing contends with a string of safety mishaps. Boeing board chair Larry Kellner also announced his departure, as did the head of the company’s commercial plane unit. There are plenty of questions about what the board knew and did, and when. The Boeing situation is another study in governance, crisis management, and accountability.
Risk and crisis management loom large in this week’s news. Some crises are a slow burn that eventually ignites, like Boeing appears to be; other events with impact, like Baltimore’s Key Bridge tragedy, erupt without warning. In our webinar this week, Amazon and Verisign board member and crisis management expert Jamie Gorelick stresses the importance of having a plan. “It’s the one thing I think we underprepare for…at least talking about what you would do in the event of something really serious or even existential is a very good conversation to have in advance.”
In other news, Neumann’s puts in his bid to buy back WeWork; BlackRock’s Larry Fink releases his annual letter; how the Key Bridge crash affects the supply chain; and re-evaluating acceptable board risk.
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March 21, 2024 -
The heavyweights are weighing in on the Disney proxy fight, and things are getting interesting. Earlier this week, Glass Lewis came out in favor of Disney, advising shareholders to vote with Disney’s slate of 12 board nominees and forgo nominees backed by activist investors Trian Group and Blackwells Capital. Major Disney shareholder George Lucas also endorsed the Disney slate. Today, International Shareholder Services (ISS) announced that it is endorsing Trian’s Nelson Peltz for a board seat–but only Peltz, not the other activist candidates. Trian says that it can help Disney “restore the magic,” while George Lucas argues that “creating magic is not for amateurs.” Who is the best steward of Disney’s magic, and, more importantly in this context, of its future as a corporation? That’s for the shareholders to decide on April 3.
In other news, remembering Ira Millstein; The U.S. government sues Apple for antitrust; are boards a hidden cyber threat? And how to avoid hanging chads in the boardroom.
Read OnMarch 14, 2024 -
As a vote to force either a sale or a ban of TikTok passes in the House of Representatives and heads to the Senate, it raises questions: about national security, free speech, data privacy, and the economic impact of a U.S. ban on a business that generates millions in ad revenue and in income for creators. If it passes, the bill–which has both bipartisan support and opposition–would give Chinese company ByteDance six months to find a U.S. buyer. Who would buy TikTok? Who wins if it’s banned? And how would a U.S.-based owner and board address the complex governance issues that continue to exist around sensitive data and bad actors? The bill is the latest example of geopolitical issues affecting business, and another reminder of how data, algorithms–and soon AI–can make businesses and boards vulnerable if governance is lacking.
In other news, Sam Altman is back on OpenAI’s board; The new SEC climate regulations are here; the Economist looks at women on corporate boards; and a path to better ESG strategy.
Read OnMarch 07, 2024 -
The world is awash in lawsuits and claims related to Elon Musk right now. Former Twitter executives are suing Musk over unpaid severance, and the lawyers who got Musk’s mammoth pay package struck down are seeking $5.6 billion in Tesla stock as payment. But the biggest suit this week might be Musk’s own against OpenAI, where he claims that by creating a for-profit arm, the company is going against its foundational mission. Musk, who helped found OpenAI in 2015, claims the company’s technology is now too powerful to be owned by any one entity. Skeptics say Musk is trying to ensure that only one entity profits from AI (himself). But he raises interesting questions: How powerful is AI at the moment? And when does the mission of ensuring its ethical use begin to run counter to a company’s mission of profitability and shareholder value? These are questions that will become more urgent as the world’s largest tech companies begin to develop their own versions of generative AI technology.
In other news, McKinsey looks at the rising complexity of board work; GE Vernova’s spin-off; Lessons from Harvard’s board turmoil; and the increased focus on internal audit.
Read OnFebruary 29, 2024 -
Boards and companies have long known that federal and state climate disclosure rules are on the horizon. But as the release of the SEC’s climate risk disclosure rule draws closer, we may see some last-minute changes in its scope. Politico reports that the rule, expected to be released in a matter of weeks, may be pared back in response to backlash from business lobbyists and Republican lawmakers. Much of the debate centers around Scope 3, which requires companies to disclose information on emissions generated by customers and suppliers. At the same time, a new survey finds that companies feel the most pressure to decarbonize from their boards, not from customer or regulatory pressure. And Harvard moves forward to decarbonize its supply chain, aiming to be fossil-fuel neutral by 2026 and free by 2050.
In other news, the battle for the Norfolk Southern board; Reddit files for IPO; the 2024 Proxy Season preview; and Abu Dhabi's largest firm adds an AI-powered board observer.
Read OnFebruary 22, 2024 -
Carl Icahn turned 88 this week, but that wasn’t his only notable activity. His firm secured four seats on two different boards: JetBlue and American Electric Power. Icahn’s activism is the latest chapter in JetBlue’s turbulent last few months, which saw CEO Robin Hayes resign and the company’s merger plans with Spirit Airlines collapse. As JetBlue continues to find its way, it’s no surprise that activists have taken notice. Many will remember that one of Icahn’s most infamous activist campaigns was taking TWA private in the 1980s. With a new CEO dedicated to “aggressive action” to make JetBlue profitable again and Icahn’s 10 percent stake in the company, where JetBlue goes from here should be interesting to watch.
In other news, big firms pull back further on ESG; does NVidia’s success signify an AI tipping point?; Arkhouse swings and misses for a majority seat at Macy’s; and a look at the S&P 500’s CEO compensation trends.
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