July 28, 2016 - Issue 2.30 - 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.
How common is common sense?  This week, the governance narrative turns to a discussion that should not be very contentious; however when the definitions of “common” and “sense” are in the eye of the beholder, controversy abounds. Are VC’s paying enough attention, are government leaders paying too much attention, are corporate board members paying the right level of attention? All that, and a board paying its CEO to create the right “tone at the top” while another board fires its CEO for missing the numbers. Lots of opinions this week: from Sacramento to Washington, New York to London, Philadelphia to Stockholm. So we ask, where is the common in common sense?

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The Hot Seat

Are Silicon Valley’s VCs Behind The Times?

“Memo to those who believe that corporate governance efficacy isn’t directly linked to shareholder value: those who manage trillions of dollars disagree with you. That is, unless you’re one of the legendary venture capital (VC) funds on Sand Hill Road around the corner from Stanford University. Attitudes towards corporate governance within the VC ecosystem haven’t appreciably evolved over the years, titanic upheaval in the capital markets notwithstanding.” Yahoo Finance

Across the Board

Curated news and insights from the world's boardrooms.

America’s Corporate Titans Try To Lead The Way...

“A handful of the most powerful names in business and finance have joined up to try and improve the way American corporations are governed, putting a collective stake in the ground for what they see as ‘commonsense’ standards for corporate governance at a time when activist investors have ramped up the pressure on corporate boardrooms.” The Washington Post 

…or Are They Already Behind The Times?

"There was nothing innovative about Buffett and Dimon’s list. Although it includes the idea that directors might speak with shareholders, that was something the Business Roundtable outlined in principles it produced over a decade ago. So too was the call for a review of earnings guidance practices, which the CFA Institute and a panel of the Business Roundtable advocated ending 10 years ago…[The] U.K. has produced a much heftier list of requirements in recent years, including six years ago.” Fortune

For Those Who’d Like to Decide For Themselves

If you’re curious what the hubbub is all about, take a look here to see the Common Sense Corporate Governance Principles for yourself. 

Market Leader CalSTRS Setting Standards of Their Own

"The California State Teachers' Retirement System last Thursday, July 14, approved policy changes to the Corporate Governance Principles which establish the high-level framework, proxy voting activities and shareholder priorities. ‘These principles guide our proxy voting, which is one of the most important tasks we undertake as a long-term shareholder in support of our fiduciary duty to our members,’ said CalSTRS Director of Corporate Governance Anne Sheehan.”  Market Wired

Creating Waves Across the Pond...

“British Prime Minister Theresa May has been in office for less than two weeks, but she’s already rattled the country’s business community with a series of proposed changes to how companies are managed. Ms. May has taken particular aim at corporate governance and proposed two significant reforms: requiring companies to add employee representatives to boards, and make annual shareholder votes on executive pay binding.” The Globe and Mail

…With Immediate Pushback From The Big Fish

“More concerning is [May’s] proposal to require companies to appoint employee-directors (EDs) and consumer-directors (CDs) to help ask ‘the difficult questions, think about the long-term and defend the interests of shareholders’. It may be a policy she is genuinely keen on, but it is also quite possible that it is just a stick to use to beat the City if it fails to produce radical change on pay in the UK.” The Telegraph

A New Way For Boards To Measure Executives?

“With corporate culture under increased scrutiny by regulators, shareholders and the general public, it was only a matter of time before management responsibility for maintaining the ‘tone at the top’ for compliance entered the executive compensation scoreboard. CIT Group Inc., provider of financing and leasing to middle market companies, made “tone at the top” for compliance a qualitative measure in the scorecard for the performance of its chief executive, in what some governance experts say could become a trend as corporations continue to explore ways to instill a culture of compliance and effective risk management.” The Wall Street Journal

Unexpected Results Cause Ericsson’s Board To Make Unexpected Change

“Swedish telecom equipment maker Ericsson on Monday abruptly ousted CEO Hans Vestberg just days after announcing disappointing second-quarter earnings and amid dissatisfaction with the executive's turnaround plan. Ericsson chairman Leif Johansson said that ‘in the current environment and as the company accelerates its strategy execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson's development.’ ” The Street

More Common Sense: UC Regents Enact New Conflicts Rule

“Senior executives at the University of California who want to serve on corporate boards, consult for companies or otherwise moonlight must first explain how UC would benefit from the work, under conflict-of-interest rules that the system’s Board of Regents approved Thursday." SF Gate

Cleaning Up That Chocolate Mess

"Through their spokesman Saturday, members of the Hershey Trust board of directors had little to say about a pending agreement with the Pennsylvania Attorney General's Office over how the board operates — other than to confirm that an agreement exists. Word of that agreement, however, has renewed speculation that a pending change in board governance could make a sale possible. The Hershey Trust controls the largest block of Hershey Company stock and has rebuffed offers in the past, including one in June…The Chicago Tribune reported Friday that Mondelez was considering a second try before another company could knock it out of the running.” Penn Live

A Seat at the Table

  • William E. Albrecht, Non-Executive Chairman of the Board of California Resources Corporation joins Halliburton's board.
  • Eagle Pharmaceuticals adds two new members of their board of directors, Doug Braunstein, co-founder of Hudson Executive Capital and former Vice-Chairman and CFO at JPMorgan Chase & Co as well as Robert Glenning, President Financial Services Division and CFO at Hackensack Meridian Health.
  • Judy Bruner, former CFO at SanDisk, joins Applied Materials board and will serve as a member of the audit committee.
  • Mondelez International Names Charles E. Bunch to its board of directors.
  • David Constable, former President and CEO of Sasol Limited, will join Anadarko Petroleum Corporation as a director of the company.
  • Helen Deeble, CEO of P&O Ferries Division Holdings, will join Carnival Corporation's board of directors.
  • Charter Communications, Inc. announced that Kim Crawford Goodman has been elected to its board of directors and will serve on the audit committee. 
  • PulteGroup adds three new independent directors to its board, Joshua Gotbaum, a Guest Scholar in the Economic Studies Program at the Brookings Institution; John Peshkin, Founder and Managing Partner at Vanguard Land; and Scott Powers, former president and chief executive officer of State Street Global Advisors.
  • Dennis Nally, former Chairman of PricewaterhouseCoopers International, will join the board of Morgan Stanley.
  • Padmasree Warrior, U.S. CEO of NextEV and joins Zendrive.
  • AspenTech appoints R. Halsey Wise to its board of directors
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