April 6, 2017 - Issue 3.14 - Your weekly news on all things board.
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Director's Domain: Today's perspective from the boardroom. Brought to you by Boardspan.
Moving the dial. Slowly but surely, women are making their way onto larger company boards, yet as they do, some observers note that surprisingly few are in the influential chair seats for executive, compensation, strategy or audit committees. Meanwhile, board member Arianna Huffington is again in the spotlight for her outspoken support of Uber CEO Travis Kalanick and her attempts to resolve widespread claims of a sexist culture at the company.  At Snap, Inc., however, the lone woman on the board is likely in the same situation as her male colleagues: pondering what leverage the board has  in a case where the founders have retained 90 percent of voting rights in the now public company. And, given the ongoing concerns about cybersecurity in all facets of life, you may want to learn about some common myths that, if not debunked, could undermine your company's ability to protect itself.

In the Spotlight

More Women on Boards, But Not in Most Influential Seats

“Women now hold about a fifth of board seats at big U.S. companies…. But what kind of roles and responsibilities are these women getting? This question occurred recently to Deb Henretta, a former top Procter & Gamble Co. executive who is now a senior adviser at G100 Companies and serves on several corporate boards (Corning Inc. and Staples Inc. among them), and Kimberly A. Whitler, a marketing professor at the University of Virginia's Darden School of Business. ‘We felt all the focus was on getting women on boards,’ Henretta said, ‘but we realized that just getting women on boards isn't necessarily going to give women the voice they need in the boardroom.’” [See story for chart, which shows percentage of women chairing committees at Fortune 500 companies. Less than 5% of executive committees have female chairs.] BLOOMBERG

Across the Board

Curated news and insights from the world's boardrooms.

UK Government Takes Tough Stance on CEO Pay

“British businesses must crack down on excessive pay for bosses and improve boardroom diversity to restore public trust after scandals at Sports Direct and collapsed retailer BHS, MPs have warned. Among their wide-ranging recommendations, the MPs’ committee called for a ban on long-term investment plans, complex multi-year pay deals that have been criticised for masking the true extent of huge awards to executives and for encouraging short-term thinking.” THE GUARDIAN

10 Cybersecurity Myths that Must Be Debunked

“There are many cybersecurity myths, but an accurate understanding of these 10 is critical to your cyber posture as an individual, as a business, or as a government. Myth 1. ‘Cyber risk’ is a separate category of risk. There’s no such thing as 'cyber risk' – it’s risk. It’s the same risk that encompasses everything from protecting intellectual property to competitiveness and safety of personnel, and needs the same level of attention from the board of directors and the executive team. The concept of cybersecurity risk isn’t useful by itself, and treating it as a separate form is a distraction you can’t afford.” FORBES

Snap: What Role Will Board Play If Founders Retain Control?

“Companies that go public on the New York Stock Exchange usually celebrate by ringing the opening bell from a balcony crowded with executives and employees. Snap Inc. had only two: co-founders Evan Spiegel and Bobby Murphy, who control about 90% of the voting power in Snapchat’s parent. Snap was the first major company since at least 2000 to do an initial public offering in the U.S. that gave shareholders no voting rights….” WALL STREET JOURNAL

Oprah Earns Highest Fee for Lowest Meeting Time on Board

“Oprah Winfrey collected the biggest compensation among the directors of Weight Watchers International Inc. last year, despite skipping several board gatherings and not attending the company’s annual meeting Winfrey, who agreed in 2015 to buy a stake in the weight-loss company and join its board, received $264,753 for her services last year, according to a regulatory filing Monday. That’s more than twice the amount given to the second-highest-paid director, Denis Kelly. Winfrey’s pay included a benefits-plan contribution tied to her promotional work for the company that no other director received. Weight Watchers also disclosed that Winfrey was the sole director to attend fewer than 75 percent of the board’s 10 meetings in 2016. The 63-year-old also was a no-show at the Weight Watchers annual meeting, and Winfrey won’t attend this year’s shareholder meeting on May 9.” BLOOMBERG

News Corp.’s Board Draws from Republican Party

“Former New Hampshire Sen. Kelly Ayotte is joining the board of Rupert Murdoch’s News Corp. The media company announced Ayotte’s addition to the board Monday. Murdoch, the company’s CEO, is praising Ayotte’s addition to the board, saying she’ll bring ‘invaluable leadership and strategic planning skills.’ Ayotte says News Corp. plays an ‘important role’ in keeping people informed and delivering value for investors. Ayotte, a Republican, lost her seat in the U.S. Senate last fall to former Gov. Maggie Hassan, a Democrat. She’s since been helping President Donald Trump’s Supreme Court nominee, Neil Gorsuch, through the confirmation process. Ayotte is replacing Elaine Chao, the new U.S. Secretary of Transportation, on the board.” THE BOSTON GLOBE

Women at Uber Question Arianna Huffington’s Partiality

“Some Uber employees are frustrated by board member Arianna Huffington’s role overseeing the ride-hail giant’s internal investigation into sexism allegations, citing her close relationship with CEO Travis Kalanick and recent comments to the media. Huffington, who joined Uber’s board last year, on Friday afternoon met with a group of female engineers who planned to raise concerns about whether she can lead an impartial review of the company’s workplace practices, particularly after remarks she made on CNN. CNN posted an interview last Monday that quoted Huffington saying sexism was not a ‘systemic problem’ at Uber.” BUZZFEED

Shareholders Urged to Vote Directors Off Wells Fargo Board

“Wells Fargo shareholders should sweep away almost half the board of directors at the forthcoming annual meeting, in protest at the fake accounts scandal, according to an influential advisory group. Glass Lewis has recommended against the reelection of four long-standing members of the Wells board’s governance committee, whose responsibilities include protecting the bank’s reputation and making sure it does right by customers. The list of the committee’s duties, Glass Lewis said, ‘appear to us to be a near-perfect encapsulation of a list of the company’s shortcomings.’” FINANCIAL TIMES

Credit Suisse Director Pay Proposal Called ‘Excessive’

“Glass Lewis & Co. is advising Credit Suisse Group AG shareholders reject the bank’s proposal to pay 26 million Swiss francs ($26 million) in short-term bonuses to its executive board. The amount appears ‘wholly inappropriate given the loss suffered by shareholders in the last two fiscal years,’ the proxy adviser said in its recommendations for the bank’s annual meeting on April 28. Proposed compensation for the board of directors is ‘excessive,’ it said.” WASHINGTON POST

Be Ready for Activist Investors

“For many boards, it is their worst nightmare. Activist investors have a long and not always distinguished history. At best, activist approaches have been seen as battles.… Les dramatic, but no less impactful, an activist campaign can easily feel like a rebuke. An outsider with no knowledge of your company thinking they can do a better job. Who are they to know? The travails of Pershing Square and ValueAct Capital at US pharmaceutical firm Valeant show that the activists aren’t always right. But, the truth is that the majority of today’s activists are genuinely targeting improvements in strategy, operational performance or financial results. The old stereotypes of asset-stripping corporate raiders are rarely accurate today.” MANAGEMENT TODAY

Sticky Issues for GM Board, if Activist Had His Way

“Hedge fund manager David Einhorn's unusual plan to divide General Motors Co's shares into two classes poses a potential corporate governance minefield for GM board members. The shareholder proposal, quickly rejected by the company this week, is aimed at boosting a lagging stock price, but did not appear to catch fire with other existing or prospective shareholders, who see it as an odd mix of hybrid security schemes. One obstacle cited by legal and financial advisers is the probable conflict it presents for GM's directors, who under Delaware law are required to be loyal to all shareholders. That could get tricky under Einhorn's plan as directors would oversee two classes of stock that each have voting powers but competing ambitions for use of company capital.” REUTERS

From the Boardspan Archives

Cyber-Threats: The Board's Role

"Board members are being advised to assess cyber-security exposures at their companies. But how is a board member to tackle this topic when it is clearly management’s job to handle operational issues like cyber-security? And does the board have the knowledge required to conduct such an assessment? The board’s role, as always, is to ask the right questions, help set priorities, demand accountability, and serve as a strategic resource. A process-oriented, systematic approach to surfacing cyber-threat issues is consistent with this role." WOODRUFF & SAWYER via BOARDSPAN

 Seat at the Table

  • Ellen Levy, former VP of strategic initiatives and head of corporate & business development at LinkedIn, joins the board of RallyPoint, an online network for service members and veterans
  • Financial services company UBS nominates for election to its board Julie G. Richardson former partner at global private equity firm Providence Equity Partners and former vice chairman of JPMorgan Chase & Co.’s investment banking division
  • Mimecast, which provides cloud-based email management, appoints to its board Aron Ain, CEO of Kronos Incorporated, a leading global provider of workforce management and human capital management cloud solutions, since 2005
  • Wendy L. Yarno, former CMO at Merck & Co, joins the board of Alder BioPharmaceuticals
  • Student loan servicing company Navient appoints to its board David L. Yowan, EVP and corporate treasurer for American Express
  • Mobile communications company InterDigital appoints to its board Joan Gillman, former EVP of Time Warner Cable and president and COO of Time Warner Cable Media
  • Auxilio, a provider of enterprise security and document workflow solutions for the healthcare industry, appoints to its board Theresa Meadows, SVP and CIO of Texas-based Cook Children’s Health Care System
  • Cytori Therapeutics, developer of oncology treatments based on cell therapy and nanoparticle platforms, welcomes to its board Gregg Lapointe, co-founder and CEO of Cerium Pharmaceuticals
  • Following the ouster of two long-term directors earlier this year amid an SEC Investigation, the Banc of California appoints to its board Mary Curran, former EVP and corporate banking chief risk officer for MUFG Union Bank; and Bonnie Hill, president of B. Hill Enterprises a consulting firm focusing on corporate governance, board organizational, and public policy issues
  • Clean energy company Ballard Power Systems appoints to its board Janet Woodruff, a financial leader in executive roles with companies in the energy, utility, transportation and life sciences sectors, and former acting CEO of the Transportation Investment Corp
  • Plated, a premium meal kit service, adds a director to its board: Cathy Graham, CFO of education technology company 2U
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