June 16, 2016 - Issue 2.24 - Your weekly news on all things board.
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Director's Domain: News & views for today's boardroom. Brought to you by Boardspan.
Long-standing issues dominate the thoughtful discussion taking place in the boardroom this week: Despite much-publicized goals and efforts to increase the percentage of women directors, the numbers aren’t moving, according to the latest Catalyst report (via Bloomberg). The debate continues on board tenure—is familiarity with the business more valuable than fresh insight and lack of cronyism? A new study from NYU’s Stern School of Business suggests long terms are not likely to be better. And Boardspan CEO Abby Adlerman suggests a simple model for Boards to best collaborate with Management.

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The Hot Seat

Women See 0% Gain In S&P Board Seats

 “The lip service paid to diversity by many large U.S. companies has done little for actual progress toward putting women on their boards, a new study shows. Women were named to about 27 percent of open board seats at companies in the Standard & Poor’s 500 Index in 2015, according to a report by Catalyst, an organization that advocates for workplace inclusion for women. That leaves women with 19.9 percent of board seats at S&P 500 companies, inching up from 19.2 percent in 2014."

Across the Board

Curated news and insights from the world's boardrooms.

Step 1 to a Better Board: Specify Responsibilities

“’Nose in, fingers off’ is the old adage for board service. The message is clear: a board’s purpose is to monitor and advise management, not trample on their turf. While that statement sounds pedagogically simple, putting it into practice is not straightforward. So much depends on the specific needs of the organization, the skills of the executives at the helm, the board’s access to information and inherent competencies. How does a board find its balance? What are the ways a board should help its management team? What is too much participation and what is not enough?” BOARDSPAN

Viacom Director Pleads Case to Redstone

“Viacom Inc's lead independent director on Tuesday pleaded for a meeting with controlling shareholder Sumner Redstone and warned of further court battles if the media tycoon remained inaccessible to the board. In a letter from Fred Salerno to Redstone, made public by the company, Salerno also defended Viacom management's handling of the possible sale of a stake in movie studio Paramount. ‘Sumner, they tell us they won't make you available for fear that such a meeting would become the source of more litigation,’ Salerno wrote. ‘In reality, putting up a wall around you ensures more litigation – and that is not what we want.’” REUTERS

Director Tenure: What Does it Mean for Company Value?

“[A research paper examining the relationship between average board tenure and company value by NYU Stern School of Business along with Quantitative Management Associates] concluded there was considerable support for the concept that companies with long-serving boards tend to be rewarded with a ‘stability premium.’  However, board effectiveness with regard to certain board functions tends to ‘peak’ at some point, after which ‘long-tenured board members begin to become a drag on the company valuation.’ Moreover, for high-growth companies, after the initial period of positive impact, the detrimental effect of longer board tenure on market value is even more pronounced.” PUBCO@COOLEY

MetLife Extends Retirement Age for Chairman

“MetLife, Inc. today announced that its Board of Directors has elected to waive the company’s age-65 retirement policy for Chairman, President and CEO Steven A. Kandarian. The Board retains the option to do so when it concludes such a move would be in the company’s best interest. Kandarian, 64, has been MetLife’s president and CEO since May 2011. He added the title of Chairman in January 2012.” INSURANCENEWSNET

Tribune Publishing Chair Brings On New Director

"Tribune Publishing Co., which has faced criticism over the influence of nonexecutive Chairman Michael Ferro over top-level appointments, said Wednesday that former U.S. Rep. David Dreier has been named to the board, effective immediately. Mr. Ferro has now overseen the appointment of all but two of the directors on Tribune’s board, which is made up of nine members including himself. Mr. Dreier, who represented a California district in Congress from 1981 to 2013, takes the board seat of the resigning David Dibble, who had been a director since 2014." WALL STREET JOURNAL

Successfully Giving Weight to Both Purpose and Profit

“We have recently seen a number of corporations make decisions that by historical norms would appear to be at odds with what we would expect from leaders of major companies.... What we are seeing is no longer a conflict between doing the ‘right’ thing and commercial success, but rather, a complex interaction of factors that has the characteristics of a paradox – a situation in which oppositional tendencies are brought into close contact. The fundamental challenge is how to use such paradoxes to inform creative tensions – which lead to innovation and growth – rather than succumb to paralyzed indecision or poor judgment calls. The leaders who resolve paradoxes follow a predictable path: they accept them, confront them, and figure out how to transcend them.” HARVARD BUSINESS REVIEW

Hoffman Likely to Get a Seat on Microsoft Board

“LinkedIn co-founder and Executive Chairman Reid Hoffman is likely to be named to the board of Microsoft once the $26 billion acquisition deal closes later this year as expected, according to several sources.  No official offer has been made to Hoffman as yet, due to fiduciary issues, and the many-step process has not been set in motion either…. The addition of the high-profile and well-liked investor and entrepreneur would be a coup for Microsoft, which has had an up-and-down relationship with Silicon Valley over the decades.” RECODE

From the Boardspan Archives

Conflicts in the Boardroom

"In the boardroom, disagreements are often unavoidable—especially when the board is composed of independent- minded, skilled, and outspoken directors. This is not a bad thing. There should be a debate in the boardroom, and decisions should result from a process in which directors consider all reasonably available information. A board that never argues or disagrees is most likely to be an inactive, passive, or inattentive board — in other words, an ineffective board that is neither fulfilling its oversight function nor carrying out its duty of care. Yet, if boardroom disagreements and/or shareholder conflicts are not dealt with properly, they can devolve into acrimonious disputes that undermine a company’s operation and performance." IFC CORPORATE GOVERNANCE via BOARDSPAN

A Seat at the Table

  • Erika Rotenberg, former general counsel of LinkedIn, joins the board of cloud-communications platform Twilio. 
  • Margaret M. (Peggy) Smyth, CFO of public utility National Grid USA, joins the board of online retailer Etsy.
  • Kathleen Murphy, president of personal investing at Fidelity Investments, joins the board of the Markle Foundation, which aims to solve national health and security issues through new technologies.
  • Athenahealth, provider of electronic health records and billings systems, appoints to its board Tom Szkutak, former SVP and CFO at
  • Packaged food giant Kellogg welcomes to its board former CEO and chairman of Dollar General Richard W. Dreiling.
  • Mortgage financing firm Fannie Mae adds three new directors to its board: Hugh Frater, former chairman and CEO of Berkadia Mortgage; Renee Glover, founder and managing member of the consulting firm Catalyst Group; and Michael Heid, former president of Wells Fargo Home Mortgage.
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