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January 12, 2017 - Issue 3.2 - 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.
We talk frequently about the increasing pressure boards feel, as everyone from regulators to shareholders holds directors accountable for a company’s actions. This week, we see that consumers, too, can take aim at boards for behaviors they don’t agree with. Witness the boycott called against L.L. Bean after one of its board members was reported to have contributed to the Trump campaign. There's not much directors can do about increased scrutiny, besides ensuring we act with integrity and consider decisions carefully, knowing they might be perceived differently by others. As Harvard Business Review suggests, we can all get better at identifying ethical decisions and perhaps seeing the potential consequences before we make a move. Meanwhile, Yahoo announced this week that many directors—including CEO Marissa Mayer— will be leaving the company’s board once the deal with Verizon closes. And a dispiriting new report shows that at many companies, “diverse directors,” i.e. women and people of color, are paid less than their white, male counterparts.

The Hot Seat
 

L.L. Bean, the Board Member, and the Boycott

“L.L. Bean found itself under threat of boycott from activists after Linda Bean, granddaughter of founder Leon Leonwood Bean and a member of the company’s board of directors, donated to a pro-Donald Trump political action committee. It’s the latest brand to drift into a blizzard of political vitriol over a perceived stance on the Republican president-elect’s politics. Linda Bean, who owns a chunk of the closely-held maker of clothing and outdoor recreational goods, is a longtime political donor who twice ran unsuccessfully for Congress as a Republican. She contributed $60,000 to the Making America Great Again LLC, according to the Federal Election Commission…. After news of the donation emerged, anti-Trump group Grab Your Wallet called for a boycott of L.L. Bean’s products. Founded last October, Grab Your Wallet publishes a list of companies and individuals who support Trump and urges consumers to punish them by withholding their cash.… Shannon Coulter, a co-founder of Grab Your Wallet, [said], ‘It would be naïve for any brand to believe that in this day and age, a board member can participate in these kinds of activities and not think it’ll affect the bottom line in any way.'” BLOOMBERG

Across the Board

Curated news and insights from the world's boardrooms.
 

Marissa Mayer to Step Off Yahoo Board

"Yahoo Inc. said Monday it will whittle down its board after completing its deal with Verizon Communications Inc., and several longtime directors, including Chief Executive Marissa Mayer and co-founder David Filo, will step down as directors. After the sale of its core internet business, the company will change its name to Altaba Inc. from RemainCo, Yahoo said in a regulatory filing. Altaba’s remaining assets include Yahoo’s stake in Alibaba Group Holding Ltd. and Yahoo Japan. The name is a combination of the words ‘alternate’ and ‘Alibaba,’ a person familiar with the matter said. Eric Brandt, who joined Yahoo’s board last March and is the former chief financial officer of Broadcom Corp., will become chairman of Altaba, according to the filing…. Six Yahoo directors will be leaving after the Verizon sale, including Ms. Mayer, Mr. Filo and Maynard Webb Jr.... Also leaving the board will be Jane Shaw, a former pharmaceutical industry executive who joined in 2014, as well as media executive Eddy Hartenstein and Richard Hill, former CEO of Novellus Systems Inc.’ WALL STREET JOURNAL
 

White Male Directors Earn More Than "Diverse" Peers

“Beyond diversifying their boards, corporations across the United States now have another issue: Paying women and minorities the same as their white male peers. A new study by researchers at the University of Missouri and the University of Delaware finds that ‘diverse’ people (women and minorities) on the boards at more than 1,800 companies are paid about 3% to 9% less than their ‘non-diverse’ (white and male) counterparts. The researchers also concluded that it’s uncommon for women and minorities to chair or serve on important committees, too.” FORTUNE
 

Chan Zuckerberg Initiative Builds Team & Advisory Board

“The Facebook founder Mark Zuckerberg and his wife, Dr. Priscilla Chan … have hired a top political operative to lead the next phase of their philanthropic work at the Chan Zuckerberg Initiative, the limited liability company they set up in 2015 to conduct charitable efforts. David Plouffe, who managed Barack Obama’s 2008 presidential campaign and is chief adviser and a board member at Uber, is leaving the ride-hailing company to join the Chan Zuckerberg Initiative as president of policy and advocacy. In addition, Mr. Zuckerberg and Dr. Chan are forming a public policy advisory board of former government officials and other experts in the fields of education, science communications and advocacy. The new board will be led by Kenneth Mehlman, who managed President George W. Bush’s 2004 re-election campaign and is now head of global public affairs at Kohlberg Kravis Roberts, the private equity firm. Mr. Mehlman will volunteer part of his time to the new board, which is recruiting other members who will also serve in a part-time capacity.” NEW YORK TIMES


Can You Train Yourself to Make Ethical Decisions?

“One of the conundrums of ethical decision making is that many moral decisions that are quite straightforward—even easy—to resolve in a classroom or during training exercises seem far more difficult to successfully resolve when confronted during actual day-to-day decision making…. To appreciate how significant simply identifying an ethical dilemma is, consider the choice of Rajat Gupta, the former managing director of McKinsey & Company, to call a billionaire hedge fund trader after a Goldman Sachs board meeting. Gupta had spent decades successfully protecting client confidences and was widely applauded for his thoughtful and careful decision making. The breach of divulging confidential information from a board meeting to a trader ought to have been trivially easy to identify. Yet amid all the decisions he was making, he didn’t seem to identify the ethical nature of the consequential decision that he faced that day.” HARVARD BUSINESS  REVIEW
 

When to Listen to that Activist Investor

“Every business leader fears getting a certain kind of letter. It comes from an activist shareholder who has acquired at least 5 percent of the company’s stock and wants to have a meeting. You can’t just tell the investor to take a hike; that might lead to a battle to take over the company’s board and C-suite. And anyone who doesn’t want to hear what he has in mind should rethink that idea. We are living in a time when an activist just might have some good ideas for an operational overhaul — even if the advice is painful to hear.” STRATEGY+BUSINESS
 

6 Regulatory Issues UK Boards Should Keep In Mind

“You don’t need us to tell you that last year was full of surprises. The EU referendum, followed by the US election result, has created huge uncertainty and widespread anxiety among businesses. As we ponder the true meaning of Brexit and what contribution Donald Trump will make to American and world politics, one thing we can be sure of is that we would all like more certainty and less risk. At BLP, we’ve identified six regulatory themes every Board needs to keep on its radar in 2017. And unlike so many other things in the world at present, we’ve made sure nothing is open to interpretation. 1. Regulation is getting more personal”  LEXOLOGY

From the Boardspan Archives

9 Do-or-Die Questions Boards Should Ask About Technology

"Some organizations are creating new technology forums, building the expertise of corporate directors, and strengthening IT governance—all with the aim of allowing boards to guide management by asking the right questions about technology. But what are the right questions at a time when digital technologies are beginning to disrupt industries and mastering these technologies may be the key to long-term survival and success?" MCKINSEY & COMPANY via BOARDSPAN 

 Seat at the Table

  • Lilian Tomovich, chief experience officer and CMO of MGM Resorts International, joins the board of DineEquity, the parent company of the Applebee’s and IHOP restaurant chains
  • Kidney care provider DaVita welcomes to its board Pascal Desroches, CFO for Turner Broadcasting
  • Karole F. Lloyd, a vice chair and managing partner of the Southeast for Ernst & Young, joins the board of insurance company Aflac
  • Former Genentech CEO Ian Clark joins another biotech board: Redwood City-based Guardant Health, maker of bloodtests designed to replace biopsies
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