January 28, 2016 - Issue 2.4 - 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.

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And now, back to this week's board news...

All eyes are on the boardroom. From activist investors wanting access, as United Airlines is hearing about this week, to the SEC wanting to know the diversity profile of public company boards, the board is under more pressure than ever to open its clubby doors to greater visibility as well as to a whole new breed of director. Right on cue, this week’s newsletter comes with helpful advice for dealing with all this attention, including pointers for cultivating independence and trust, for creating a “mindful board,” and for boosting performance by increasing gender diversity and improving recruiting practices. And here’s a little layman’s advice: Apply that mindfulness to compensation guidelines and avoid the fate of Facebook, which this week settled a suit against it alleging that it substantially overpaid its directors, by some 43% above industry peers.

The Hot Seat


Facebook Settles Suit on Outsize Director Pay

“Investor Ernesto Espinoza sued Facebook and controlling shareholder Mark Zuckerberg saying a 2012 pay plan improperly allowed directors to set their own pay and that Zuckerberg exceeded allowable compensation for some senior officials. Facebook’s board in 2013 paid non-employee directors an average of $461,000 in stock, exceeding industry peers by as much as 43 percent, Espinoza said in the Delaware Chancery Court lawsuit. In a settlement agreement filed Monday, the company agreed to conduct annual compensation assessments, hire an independent compensation consultant, have the board monitor compensation changes and consider stockholder approval of the compensation program at this year’s annual meeting.” BLOOMBERG BUSINESS

Across the Board

Curated news and insights from the world's boardrooms.

How Diverse Is Your Board? SEC Wants to Know

“Securities and Exchange Commission Chairman Mary Jo White outlined on Tuesday a busy agenda for what is likely to be her final full year at the helm of the SEC, with a range of initiatives focusing on boardroom diversity and executive compensation. One new priority: possibly requiring companies to provide more details about the diversity of their directors.”  NASDAQ

More Changes In Store for Twitter Board

“… To grapple with Twitter’s problems, Mr. Dorsey is turning to a bigger slate of directors. The San Francisco-based company plans to announce the appointment of two new board members soon, said the people familiar with the plans. While the names of the new directors could not be learned, one of them was a high-profile media personality, the people said.” NEW YORK TIMES

United Airlines' Investors Eye Board Seats

“United Continental Holdings Inc said on Tuesday two investment firms raised their stakes in the airline to engage it on issues ranging from board composition to capital structure and enhancing shareholder value. United, the second largest U.S. airline by capacity, said Altimeter Capital Management LP increased its ownership to 3.1 percent, while PAR Investment Partners LP had taken a 2.4 percent stake. The companies have had smaller stakes in United for months and have already engaged the airline on such issues, the filings said.” REUTERS

Faster Than You Think: AI Comes to the Boardroom 

“The first Artificial Intelligence machine on a corporate board of directors — Expected date: 2026. Beyond driving cars, AI can learn from previous situations to provide input and automate complex future decision processes, making it easier and faster to arrive at concrete conclusions based on data and past experiences. An artificial intelligent system using natural language processing, ontologies and reasoning can be effective in gathering and extracting information from large data sources and has the ability to identify the cause and effect within data.”  ~From the Technological Tipping Points Report of the WORLD ECONOMIC FORUM

Want a Better Performing Board? Change the Way You Recruit

“Q: What are the main challenges globally to having more women on company boards? A: First of all, there is a lack of understanding that having more diverse boards is really an issue about having better quality board oversight and substantial performance… The second driver is that there have not been any notable changes in how searches occur when a board seat opens up. From a cultural and institutional inertia point of view, if you don’t change the way you do searches and where you’re looking, you’re always going to end up with the same kind of candidates.” IR Magazine

An Outspoken Director Resigns ... and Talks

“The CenturyLink Inc. director who resigned after fellow board members said he was ‘creating an environment that was unproductive’ had been pushing for changes to the board to help the telecommunications provider compete, he said in an interview. Some board members have been around too long and should be replaced with new people who can help the company compete with cable providers and Google Inc., which offers its own high-speed Internet service in some markets, Joseph Zimmel said by telephone Tuesday.” BLOOMBERG BUSINESS

Mindfulness Finds Its Way to the Boardroom

“Mindfulness in the boardroom refers to the capacity of a group of people to think in a deep way together. In assessing a current challenge, the mindful board looks to the past, present, and future. Deliberations encompass the impact of a decision not only on the enterprise, but on industry, society, and the planet. And the board considers how the decision will play out in both the short term and the very long term. Mindful boards intentionally look out at the world through multiple windows — technology, politics, sociology, environment, and economics. To leverage the power of using multiple windows, members of the mindful board hone their individual capabilities while practicing three interdependent disciplines as a governing body: leadership by the group, expanded consciousness, and fearless engagement.” STRATEGY+BUSINESS

Get on Board: Ideas for Bolstering Trust and Independence

“Corporate boards today confront one blockbuster challenge after another, from corruption to product defect to employee mistrust to cybercrime. As a result, they and their turbulent performance stand at center stage - this new reality check calls for a disruptive governance blueprint that generates measureable trust and independence.  Institutional investors, consumers, NGOs, and other influential constituencies increasingly are holding boards accountable for company performance. They're demanding high-performing boards with genuinely independent boards. And a scorecard exists both to help directors achieve that expected level of leadership execution and measure their performance.” HUFFINGTON POST

From the Archives

You, Yes You, Have a Role to Play in Data Analytics

“In recent years, data science has become an essential business tool. With access to incredible amounts of data—thanks to advanced computing and the ‘Internet of things’—companies are now able to measure every aspect of their operations in granular detail. But many business leaders, overwhelmed by this constant blizzard of metrics, are hesitant to get involved in what they see as a technical process. For Florian Zettelmeyer, a professor of marketing and faculty director of the program on data analytics at the Kellogg School, managers should not view analytics as something that falls beyond their purview. ‘The most important skills in analytics are not technical skills,’ he says. ‘They’re thinking skills.’” KELLOGG INSIGHTS via BOARDSPAN

A Seat at the Table

Mark Templeton, who, as CEO, grew mobile workspace provider Citrix from $10 million to $3 billion in revenues, joins the board of Adaptive Insights, a provider of cloud corporate performance management. Mark Fields, CEO of Ford Motor Company, is the newest member on IBM’s board of directors. Peter Grauer, CEO and chairman of business information provider Bloomberg, takes a seat on the board of the Blackstone Group, the world’s biggest manager of alternative assets.Cosmopolitan editor-in-chief Joanna Coles joins the board of social messaging app maker Snapchat. Roberta Bowman, former Duke Energy chief sustainability officer takes on the chair role at the LPGA.Unilog, a technology company specializing in e-commerce and enriched product catalogs for the B2B marketplace, welcomes to its board Ram Gupta, formerly an executive and technologist at PeopleSoft, WebMD and IBM.The Tupperware board welcomes Meg Crofton, former president of Disney Parks and Resorts.
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