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August 4, 2016 - Issue 2.31 - 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.
Disappointed. How else to feel when reading that the latest research reveals that women and minority corporate directors make less than their fellow directors serving on the same boards? Rather than letting discouragement set in, though, why not focus on what you can do to make a difference? You might start by reading MIT Sloan Management Review’s ideas for promoting greater diversity in the boardroom. Meanwhile, critics of the “Commonsense Principles of Corporate Governance,” (issued last week by a group of prominent corporate leaders), say the guidelines need to go farther to ensure that non-executive directors have a larger role in engaging shareholders, that boards take seriously their responsibility for enterprise risk management, and that director tenure and age limits become commonplace.
 
Do you have a reaction to the Commonsense Principles of Corporate Governance? (Click here to review the document.) Share your thoughts about the principles or anything else board-related with us: newsletter@boardspan.com

The Hot Seat


Why Do Women and Minority Board Members Earn Less?

“Researchers at the University of Missouri have found that among nonemployee corporate directors, women and minorities make less than their nondiverse counterparts. Female directors earn on average $7,000 less a year than fellow board members, while minorities come up $5,000 short, according to the research, published in a working paper…. After controlling for the directors’ qualifications and experience, minorities and women still earned 1% to 4% less than other directors serving on the same board. Women and minority board members, typically, had deeper resumes compared with male and nonminority counterparts when it came to qualifications like academic and consulting experience, and won more shareholder votes during director elections.” WALL STREET JOURNAL

Across the Board

Curated news and insights from the world's boardrooms.


Governance: What Could Be More Sensible...

“A group of prominent corporate leaders and institutional investors— including Warren Buffett, Jeffrey Immelt, and Larry Fink — recently unveiled the Commonsense Principles of Corporate Governance…. I find it extremely troubling that these luminaries — particularly the participating institutional investors — see such a limited role for non-executive directors to engage directly with shareholders on ‘governance and key shareholder issues,’ leaving the job largely to the CEO. What could be more sensible than to have outside board members — particularly a non-executive chairman and lead independent director — directly engage those who elected them to oversee governance and other matters of shareholder concern?” HARVARD BUSINESS REVIEW
 

…Than Addressing Risk Management, General Counsel, and Tenure

“The principles also reflect some missed opportunities — important governance topics that arguably deserve note. These include the critical nature of the board’s responsibility for enterprise risk management and, in particular, compliance oversight. They do not address the growing movement toward assuring the general counsel a prominent position within the senior leadership team, or acknowledge the oft-referenced role of the general counsel as ‘lawyer-statesman.’ Also, the principles decline to take sides in the often-contentious debate on director tenure and mandatory retirement age.” NEW YORK TIMES


Viacom Suits Open Pandora's Box

“The fight over Viacom is digging in for years of litigation as each side holds on to its own self-righteous claim to the poorly performing media company. That was made clear by two court rulings last week in Massachusetts and Delaware… Both courts found that the issues raised required a trial to examine whether [Sumner] Redstone, 93, was competent to remove Philippe P. Dauman and George Abrams from the trust that will control Viacom and CBS on Mr. Redstone’s death or incapacity. Also at issue is the removal of Mr. Dauman, Mr. Abrams and three others as directors of Viacom. The trial will open up something of a Pandora’s box. For years, the trust that controls Viacom and CBS — its workings and operations — was shrouded in mystery. This failure of disclosure suited all the parties in the current mess, at the expense of the minority shareholders.” NEW YORK TIMES


5 Ideas for Strategic Leaders

"When crisis strikes, leaders are often quick to blame things not in their control—a sagging market, new regulations, upstart competitors or unpredictable natural disasters. But the fact is—they’re usually wrong. They shouldn’t look elsewhere. They should look in the mirror. The single greatest reason companies get into trouble is because CEOs are bad at strategy. Consider these two rather shocking statistics: 81% of the time when major shareholder value is destroyed it’s because of bad strategy decisions. And only 8% of all executives are good at both strategy and execution—that is, betting on the right strategy and doing the right things to make it happen....But the good news is, there are five things companies and CEOs can do to help close this strategy-to-execution gap. And interestingly—they’re the opposite of what most companies and leaders think." WALL STREET JOURNAL
 

Apple Exec Joins Board of Gene Sequencing Firm

“Phil Schiller, Apple's marketing chief, is now a director of Illumina, one of the most important companies in gene sequencing. Illumina has an enormous presence in the life science industry. It makes the machines and develops technology used for genetic testing, and counts companies like 23andMe as customers. It has a market capitalization of $25 billion…. Apple executives talk about simplifying health care as a major focus and mission.” BUSINESS INSIDER

From the Boardspan Archives

In Boardrooms, the Same Is a Shame

“Corporate boards and executive teams are self-regenerating: They largely hire their own replacements. And like all human beings, board members and executives have cognitive biases — blinders that affect how they view the world. So when boards consider the backgrounds, skill sets, and experience that make someone suitable to join their ranks, they tend to look no further than themselves to find the archetype. To overcome the mighty dose of institutional bias that favors more of the same, we need to get pragmatic: Instead of focusing on the benefits of diversity, let’s fix our attention on the growing risks of uniformity.” MIT SLOAN MANAGEMENT REVIEW via BOARDSPAN

A Seat at the Table

  • Office Depot welcomes to its board Kristin Campbell, EVP and general counsel for the hotel group Hilton Worldwide, and formerly SVP and general counsel for the office supply retailer Staples.
  • James Miller, VP of global operations and former VP of supply chain operations at Amazon and Cisco, joins the board of Wayfair, an e-commerce home furnishings company.
  • Huffington Post CEO Jared Grusd joins the board of educational technology startup Newsela.
  • Electric vehicle charging network ChargePoint elects to its board former Michigan governor Jennifer Granholm, a law professor and clean energy advocate.
  • Callidus Software, maker of cloud-based sales effectiveness solutions, appoints to its board James D. White, former CEO of juice retailer Jamba, who was previously an executive at Safeway Stores, the Gillette Company and Nestle Purina.
  • Flex Logix Technologies, a developer of chip making technology, appoints to its board semiconductor industry veteran and Eclipse Ventures general partner Pierre Lamond.
  • Media company McClatchy welcomes to its board Maria Thomas, former head of NPR Digital, who was previously CEO of Etsy and an early product manager at Amazon.
  • Johnson Controls announces that Barb J. Samardzich will join the board of directors of its spin-off automotive seating and interiors business, Adient, when it launches in October; Samardzich previously served as VP and COO of Ford of Europe.
  • Uniform and supply company Cintas adds a new director to its board: Robert E. Coletti, an attorney and partner at the law firm of Keating Muething & Klekamp.
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