August 18, 2016 - Issue 2.33 - 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.
The latest news to get diversity advocates riled up? A study showing that companies with women in the CEO seat are more likely to be targeted by activist investors. The latest news to, perhaps, energize them? A report from the Wall Street Journal suggesting that some companies are aggressively recruiting female directors, sometimes narrowing the field to just women candidates. For a pragmatic discussion about diversity—why it matters and how your board might reasonably achieve it—take a look at the Conference Board article, “How Much Difference Does ‘Difference’ Make.”

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The Hot Seat

Do Activist Investors Target Female CEOs?

“Indra Nooyi. Ellen Kullman. Meg Whitman. Irene Rosenfeld. What do they all have in common? Each woman runs, or has run, a Fortune 500 company—PepsiCo, Dupont, Hewlett-Packard, and Mondelez, respectively—and each one has been a target of shareholder activism. According to a new study from Arizona State University’s W.P. Carey School of Business, that activist connection is no coincidence. Indeed, researchers found that, all else being equal, female CEOs have a 27% likelihood of facing activism at some point in their careers. Practically speaking, that means one out of every four women who take the helm of a major public company will have to deal with an activist investor. For male CEOs, on the other hand, the likelihood is basically zero, said ASU lead researcher Christine Shropshire.” FORTUNE

Across the Board

Curated news and insights from the world's boardrooms.

It’s One Way to Increase Diversity on Boards…

“A small but growing number of U.S. companies have intensified their push to increase the ranks of women on their boards as businesses pay greater attention to gender parity at all levels. These initiatives are bearing fruit as companies revamp the way they recruit female directors. Some companies have begun to restrict initial searches to women, while others insist on interviewing at least one woman for director spots. …. ‘The system produces white male candidates unless board leaders deliberately do something different,’ said Karen Horn, chairman of the National Association of Corporate Directors.” WALL STREET JOURNAL

What a Viacom Board Settlement Might Look Like

“Talks have accelerated to end the bitter boardroom dispute between Sumner and Shari Redstone and Viacom’s top officers, with Chief Executive Philippe Dauman expected to leave with a generous exit package, according to three people close to the situation.… In addition to Dauman’s departure, the Redstone family is determined to see the Viacom board get an overhaul. The two sides are near an agreement that Viacom’s existing board members would continue to serve for several months before five new directors take seats on the board, according to another person familiar with the talks. One issue still being debated is whether to allow Viacom board’s to vote on Dauman’s plan to sell 49% of Hollywood movie studio Paramount Pictures to an outside investor.” LOS ANGELES TIMES

Barnes & Noble Board Ousts CEO

“Barnes & Noble just unceremoniously ousted Ronald Boire as CEO, saying that the board has deemed him ‘not a good fit for the organization and that it was in the best interests of all parties for him to leave the Company.’ Executive Chairman Leonard Riggio will put off his planned retirement next month and, with other managers,  ‘assume Mr. Boire’s duties.’ Meanwhile the board will ‘immediately begin an executive search for a new CEO.’” DEADLINE HOLLYWOOD

Note to BofA Board: Look Out for Activists

“Activist investor ValueAct Capital Management LP took Wall Street by surprise when it disclosed Monday that it had bought a stake in Morgan Stanley, flouting conventional wisdom that activists don’t engage in banking because there are too many regulations to make a big difference in a company’s strategy. But the Morgan Stanley stake, worth about $1.15 billion Tuesday, prompted a flurry of discussions about who might be next. Some Bank of America investors, frustrated by years of low returns, had reached out to activist investors, ValueAct included, to gauge their interest in getting into BofA, according to people familiar with the matter.” WALL STREET JOURNAL

New Directors in the Works for Gas Pipeline Co.

“U.S. oil and gas pipeline company Williams Cos Inc said on Monday it intends to add three new independent directors to its board, nearly two months after six of its directors quit. The six directors, including the company's chairman, resigned from the 13-member board in June, after a failed attempt to oust Chief Executive Alan Armstrong.  The resignations came a day after Energy Transfer Equity walked away from its more than $20 billion deal to buy Williams after months of heated disagreement. Williams Cos' fourth-biggest shareholder, Corvex Management LP, earlier in August urged the company to revamp its board with a majority of new directors within one year's time.” REUTERS

Decision-making: 5 Questions Leaders Should Ask Themselves

"The most important decisions, whether in work or in life, never really seem to fall in the black or white. They linger in the gray, where they can remain for a dangerously long time. The journalist Hunter S. Thompson once wrote, ‘A man who procrastinates in his choosing will inevitably have his choice made for him by circumstance.’ Instead of letting circumstance make your next vital decision, Joseph L. Badaracco, the John Shad professor of business ethics at Harvard Business School, believes that the answer will reveal itself after answering five important questions...” FAST COMPANY

From the Boardspan Archives

How Much Difference Does "Difference" Make

"In recent years, increasing attention has focused on the influence of gender and racial diversity on boards of directors. More than a dozen countries have implemented quotas to increase women’s representation on boards, and many more have adopted voluntary quotas in their corporate governance codes. In the United States, support for diversity has grown in principle, but progress has lagged in practice, and controversy has centered on whether and why diversity matters. We believe that increasing diversity should be a social priority, but not for the reasons often assumed. The 'business case for diversity' is less compelling than other reasons rooted in social justice, equal opportunity, and corporate reputation.” CONFERENCE BOARD via BOARDSPAN

A Seat at the Table

  • Jacqueline (Jackie) Hourigan Rice, EVP and chief risk and compliance officer for Target, joins the board of ADTRAN, a maker of open networking solutions.
  • Apparel maker Gap, Inc. elects to its board Brian Goldner current chairman, president and CEO of Hasbro, Inc.
  • Daniel R. Hesse, former president and CEO of Sprint, joins the board of Akamai Technologies, a provider of content delivery network services.
  • Peter McCormick, co-founder of ExactTarget (now Salesforce Marketing Cloud), joins the board of Emma, a provider of email marketing software and services.
  • Food-and-beverage packaging supplier the Ball Corporation elects Cynthia A. Niekamp, retired SVP at PPG Industries, Inc., and Daniel J. Heinrich, former EVP and CFO of The Clorox Company, to serve as directors.
  • Herb Cunitz, former president of Hortonworks, joins the board of DataRPM, a company that automates data science for the industrial Internet of Things.
  • ChannelAdvisor, a provider of cloud-based e-commerce solutions for retailers, appoints to its board Joe Cowan, president and CEO of Epicor Software, provider of business software solutions for manufacturing, distribution, retail and services organizations.
  • Nasdaq vice chairman Meyer (Sandy) Frucher and private investor Robert Friedman, former chief investment officer of Savannah-Baltimore Capital and the Franklin Templeton Mutual Series Funds, join the board of Sirius International Insurance Group.
  • Leidos Holdings names three new directors in conjunction with the closure of its $5 billion merger with Lockheed Martin’s information systems and global solutions business: Gregory Dahlberg, former SVP for Washington operations at Lockheed Martin; Surya Mohapatra, former chairman, president and CEO of Quest Diagnostics; and Susan Stalnecker, former VP and treasurer at E.I. du Pont de Nemours & Co.
  • General Larry Spencer, a retired four-star general in the United States Air Force, joins Whirlpool Corporation's board.
  • Hidden-object game developer G5 Entertainment appoints to its board Chris Carvalho, former COO of gamemaker Kabam.
  • Brian Niccol, CEO of Taco Bell, and Maryrose Sylvester, president and CEO of General Electric Co.'s Current business, are the newest members of motorcycle maker Harley-Davidson's board of directors.
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