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February 20, 2020 - Issue 6.06 - Your weekly news on all things board.
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Leadership takes many forms. Nissan's new CEO asks for just a little patience from the board and angry shareholders alike, saying he will accept the consequences if he doesn’t succeed at making the company profitable. Elon Musk demands more regulation for all organizations using AI, including for his own company OpenAI. Multinational investment bank UBS unveils a CEO succession plan: the head of ING will step into the role later this year. PG&E's leader, meanwhile, could be replaced by the state, or the utility could simply lose its operating license if it continues to endanger lives if a proposal by California's Public Utilities Commission is taken up. Meanwhile, six trustees resigned from the Cooper Hewitt, Smithsonian Design Museum in protest of the CEO's dismissal by the Smithsonian after she was investigated for allegedly violating a conflict of interest policy when making wedding plans.

In the Spotlight


Nissan’s New CEO to Angry Shareholders: Fire Me if I Don’t Succeed 

“Nissan’s new chief executive said on Tuesday he would accept being fired if he fails to turn around Japan’s second biggest automaker which is grappling with plunging sales in the aftermath of the scandal surrounding ex-chairman Carlos Ghosn. Makoto Uchida, who took over the top job in December, put his job on the line at a raucous shareholders’ meeting, where he faced demands ranging from cutting executive pay to offering a bounty to bring Ghosn back to Japan after he fled to Lebanon. Nissan’s worsening performance has heaped pressure on the 53-year-old Uchida, formerly Nissan’s China chief who became its third CEO since September, to come up with aggressive steps to revive the company.” REUTERS

Across the Board


UBS Names New CEO: ING's Ralph Hamers

“UBS has appointed ING boss Ralph Hamers as its next chief executive, replacing Sergio Ermotti at Switzerland’s largest bank. Mr Hamers will take over on November 1 from Mr Ermotti, who has spent almost nine years turning round the Swiss lender after it was bailed out during the financial crisis. The 59-year-old won plaudits for reviving earnings, cleaning up the balance sheet and making UBS the world’s largest wealth manager with $2.6tn in assets. ING and UBS confirmed the appointment late on Wednesday evening, after the Financial Times first reported the plans. The news came as a shock to many insiders and investors of both companies who were not expecting an announcement on succession so soon.” FINANCIAL TIMES


Media Company Tegna Rejects Investor’s Board Nominees, Appoints Its Own

“Tegna Inc. has rejected all four director nominees put forth by one of its largest investors, heightening the tension in their simmering proxy fight. The company has instead appointed Karen Grimes, a former partner at Wellington Management Co. to its board, according to a statement Wednesday. Standard General LP, Tegna’s third-largest holder with a 9.7% stake, nominated four directors last month after its calls for board representation and a strategic review hit an impasse. Tegna said at the time it would evaluate three of the nominees, having already determined it would not appoint Standard General’s Chief Executive Officer Soo Kim to the board.” MSN


Tesla’s Musk Calls for Greater Regulation of AI

“While artificial technology or AI is cited as magic that will solve most of humanity’s problems, its usage in many areas has also worried many tech leaders ... And now Tesla and SpaceX founder Elon Musk has once again called for a more stringent regulation on AI. In response to the findings of an MIT study, Musk in a tweet said that he wants to see all organisations using artificial intelligence to [be] regulated, even at his own company OpenAI. Notably, the study had highlighted that OpenAI has turned into a secretive for-profit company instead of an entity which it was earlier thought to be, working towards developing and distributing AI safely and equitably.” INC42 


Cooper Hewitt Museum Trustees Resign After CEO's Removal

“Six trustees, among them the prominent designer David Rockwell, have resigned from the board of the Cooper Hewitt, Smithsonian Design Museum to protest the removal of the museum’s director, Caroline Baumann, following an investigation into issues including her 2018 wedding. Ms. Baumann was forced to resign on Feb. 7 after an investigation by the Smithsonian’s inspector general into how Ms. Baumann procured her dress and the venue for the ceremony.” NEW YORK TIMES


CEO Sues Board That Fired Him

"The battle for control of a Russian-backed aluminum project in Kentucky has landed in court, with the ousted CEO filing a lawsuit to fire the board members who fired him. About two weeks ago, Braidy Industries said it removed and replaced Craig Bouchard with a new chief executive officer -- a move Bouchard immediately disputed. On Tuesday, Bouchard said he filed a suit in Delaware against the aluminum company’s directors, arguing that as the largest shareholder he is exercising his rights to remove board members because 'they are no longer showing proper judgment.'" BLOOMBERG


Officials Propose Rules That Could Strip PG&E of Its Leader or License

“California officials would be able to appoint someone new to control Pacific Gas and Electric Co.’s operations or reconsider the investor-owned company’s operating license, under a new enforcement process that the state’s top utility regulator proposed on Tuesday. Marybel Batjer, the president of the California Public Utilities Commission, laid out a six-step set of increasingly extreme consequences PG&E could face if it continues endangering the public after emerging from bankruptcy protection.” SAN FRANCISCO CHRONICLE


Japan’s Overhaul of Corporate Governance Seems to be Succeeding

“... the latest spotlight is illuminating one of the most positive developments to have occurred in Japanese business in decades: the first signs of improvements in corporate governance. The government of prime minister Shinzo Abe has been pushing an overhaul of corporate governance since 2014, when it introduced Japan’s first stewardship code, which — among other things — required transparency on voting records at fund managers. A year later, the government introduced a corporate governance code as part of a broader effort by the Abe administration to make Japanese companies more competitive.” STRATEGY+BUSINESS


JetBlue Board Sets Tenure Guidelines to Promote Independence

“JetBlue today announced changes to its board of directors aligned with the company’s new governance guidelines … ‘including limits on tenure and an age-based retirement threshold, to assure the independence and objectivity of our board,’ said Joel Peterson, chair of JetBlue’s board … Consistent with the new guidelines, Joel Peterson, Frank Sica and Stephan Gemkow will retire from the board at the end of their current term. Peter Boneparth will succeed Peterson as chair. Robert Leduc has been nominated as an independent director and will stand for election at the annual meeting of stockholders in May.” AVIATION PROS


Board Diversity Sounds Great, But How Do You Actually Get There?

“Various measures have been taken in recent years to improve board diversity, especially by more visible companies such as those included in the S&P 500 ... There is a complementary strategy that would address near-term obstacles, accelerate diversity and, therefore, improve governance quality for organizations of all sizes and with various missions. This approach recognizes the value of all groups, and the interests of all entity stakeholders. Implementation has two steps, neither of which reduce standards: (1) Revising specific board membership policies and the selection process to increase their relevance; and (2) Critically assessing how, why, where, and when all groups add value in today’s governance ecosystem.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

From the Boardspan Library

Corporate Culture, Not Lip Service, Counts

"... Everyone knows that talk is cheap, and so, it seems, is corporate culture. But if that were true, why would any company bother to establish it at all, even as mere lip service? 'As much buzz as there is around corporate culture, nobody has looked inside institutions to see what the consequences are of having one culture versus another,' says Paola Sapienza, a professor of finance at the Kellogg School of Management. Sapienza set out to do just that in research coauthored with Luigi Guiso of the Einaudi Institute for Economics and Finance and Luigi Zingales of the University of Chicago. To preview, the research team found that companies perceived by their own employees to value ethics—but not necessarily those that advertise their ethical culture to outsiders—showed higher profits and other indicators of strong performance." KELLOGG INSIGHT via BOARDSPAN

Seat at the Table

  • Jane Holl Lute, president and CEO of SICPA, a Swiss company that is the worldwide leader of security inks for currencies and sensitive documents, and the former Deputy Secretary for the U.S. Department of Homeland Security, joins the board of risk and strategy consultancy Marsh & McLennan Companies
  • Dame Inga Beale, former CEO of insurance company Lloyd’s of London, joins the board of insurance company Crawford & Company
  • Media ratings company Nielsen Holdings appoints two new directors to its board: former media industry executive and current founder and CEO of El Dorado Capital Tom Castro; and former Walt Disney executive Janice Marinelli
  • Musician John Legend joins the board of Vox Media
  • Jennifer Dulski, former head of groups & community at Facebook, joins the board of consumer weight loss products company WW International (formerly Weight Watchers)
  • Online marketplace Groupon appoints two new directors to its board: Valerie Mosley, former SVP of investment company Wellington Management and Helen Vaid, global chief customer officer at Pizza Hut
  • Stephen Ray Mitchell, M.D., dean of medical education at Georgetown University School of Medicine, joins the board of Vanda Pharmaceuticals
  • Timber company Weyerhaeuser appoints to its board Al Monaco, former CEO of energy company Enbridge
  • Semiconductor manufacturer Ichor Holdings welcomes to the board Dr. Wendy Arienzo, former VP of Operations at Fujifilm
  • Joseph D. Rupp, former board chair of Olin Corporation, a chemical and ammunition manufacturer, joins the board of steel manufacturing company Nucor
  • Data platform provider Splice Machine appoints to its board Phil Fasano, former VP at insurance company American International Group (AIG)
  • Restaurant industry analyst Janice L. Meyer joins the board of The Cheesecake Factory
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