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March 3, 2016 - Issue 2.9 - 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.
Powerful people are in demand. Alphabet executive chair and former Google CEO Eric Schmidt will surely seek them to fill the new advisory board on tech innovation that he heads for the Pentagon. Blythe Masters’ new financial services startup, Digital Asset Holdings, is bringing them on board with appointments like former Bank of America exec Sallie Krawcheck. Activist investors are increasingly filling boards like Angie’s List with them, too.  Harvard Business Review, however, strikes a cautionary note about bringing too many leaders together to serve a common cause: Powerful people, who are extremely successful when reigning solo, don’t always work so well together -- perhaps something to consider when you are aiming to compose a truly effective board.

The Hot Seat

 

Beware of Power-packed Boards

“All too commonly, we see groups of leaders fail to accomplish their goals—legislators who cannot agree on a bill, heads of state who cannot broker meaningful peace deals, or boards of directors who make disastrous decisions for their companies. Why do powerful people, when working together, fail as often as they do? This question is particularly vexing because researchers have long found power to boost individual performance in a variety of ways. …. But our research found that power hampers the ability of leaders to work with other leaders.” HARVARD BUSINESS REVIEW

Across the Board

Curated news and insights from the world's boardrooms.

 

Eric Schmidt to Head Pentagon Innovation Board

“Eric Schmidt, the former chief executive officer of Google, has agreed to head a new Pentagon advisory board aimed at bringing Silicon Valley innovation and best practices to the U.S. military, Defense Secretary Ash Carter said on Wednesday…. Carter and Schmidt will select up to l2 individuals to serve on the board, focusing on people who have led large private and public organizations, and excelled at identifying and adopting new technology concepts, the Pentagon said in a statement.” REUTERS


Apple Shareholders Reject Diversity Proposal

“Apple shareholders have overwhelmingly rejected a proposal that would require the board of America’s largest company to adopt an ‘accelerated recruitment policy’ for minorities among company leaders…. Apple’s board had urged investors to vote it down, telling shareholders that the measure would be too restrictive. Speaking afterward, chief executive Tim Cook said: ‘There’s much more work to do on diversity across the company. I can commit to you we are working very hard on it.’ Of Apple’s 18 named executives on its website, Cook is one of the 15 that are both white and male.” THE GUARDIAN
 

Powerful Women Unite on Startup Board

“Former Citigroup Inc. and Bank of America Corp. executive Sallie Krawcheck has joined the board of Digital Asset Holdings Inc., the startup run by Blythe Masters that hopes to revolutionize how financial transactions are processed. The development brings together two of Wall Street’s highest-profile women. Krawcheck, who was previously head of wealth management and chief financial officer at Citigroup and later ran wealth management for Bank of America, currently serves as chief executive officer of Ellevest, a yet-to-open service aimed at helping women invest. Masters, Digital Asset’s CEO, once ran JPMorgan Chase & Co.’s commodities business and helped invent credit-default swaps.” CRAIN’S NEW YORK BUSINESS
 

Eventbrite Boosts Board Ahead of Potential IPO

“Online ticketing service Eventbrite said Friday that it is adding a new board member, former president and CFO of First Republic Bank, Katherine August-deWilde. The financial services executive joins Eventbrite’s board as it tries to achieve profitability, perhaps prior to evaluating a potential initial public offering….. August-deWilde will be Eventbrite’s second female director—former eBay president Lorrie Norrington is also on the board.” FORTUNE
 

Zynga Director Becomes CEO

“Zynga Inc. Chairman and co-founder Mark Pincus is stepping down as chief executive officer of the video-game company for a second time, to be replaced by board member and industry veteran Frank Gibeau, who will start in the new role March 7. The move will allow Pincus, who becomes executive chairman, to focus on game development while having a seasoned manager make daily decisions…. Gibeau, 47, spent more than two decades at video-game maker Electronic Arts Inc. before stepping down last May from his role leading strategy and product development for that company’s mobile unit.” BLOOMBERG BUSINESS
 

How Long Between “Independent” and “Insider”?

“The term “board refreshment” may elicit some giggles—no, we’re not talking about shots of The Balvenie 50-Year Old Single Malt Scotch Whisky, Speyside, Scotland—but the topic of director tenure is increasingly becoming the focus of both academics and investors. Why?  Don’t long-term directors contribute deep knowledge of the company and provide experience and continuity to the board? Or, as some contend, is director independence compromised over the long term: that is, are long-term directors, especially those with C-suite backgrounds, really the ‘new insiders’?” PUBCO @ COOLEY
 

Viacom Shareholders Urged to Oust Comp Committee

“In case you missed it, late Friday, proxy adviser Institutional Shareholder Services (ISS) recommended against the election of six of Viacom's 11 directors. The six are all on the compensation committee…. ISS gave the following reasoning for recommending against these directors being re-elected: ‘Shareholders may be concerned by the number of directors—even those independent under ISS' policy—with ties to the company or the Redstone family. ... These ties, along with ongoing concerns over executive compensation and independent oversight at Viacom, call in to question the board's willingness to represent the interests of minority shareholders.’” THE STREET


3 Tips For Better Strategy Sessions

“Used well, strategy meetings provide clarity and momentum. They align a team around key decisions and create positive energy. Used poorly, strategy meetings irritate people. They waste time and energy, or worse, strengthen entrenched points of view creating frustration and resignation. In my work with companies from large Fortune 500 firms to small startups, I’ve attended hundreds of strategy meetings. I’ve seen leaders make three common mistakes over and over again: 1. Drafting an overly ambitious agenda.… 2. Not doing enough meeting preparation.… 3. Underestimating the need for skillful facilitation....” HARVARD BUSINESS REVIEW
 

A Sliver Lining in Activist Campaigns?

“Activist investors have a PR problem. The coterie of market-savvy financiers— New Yorkers Bill Ackman, Jeff Smith and Daniel Loeb to name a few—are often thought of as profiteers that stir up trouble in board rooms via loud campaigns and scathing shareholder letters. A new report, however, suggests that their involvement in troubled companies is a silver lining, especially when a company such as Yahoo Inc. suffers slow earnings growth. According to Boston Consulting Group, activist interventions tend to improve total shareholder returns.” SILICON VALLEY BUSINESS JOURNAL


Angie’s List Agrees to Activist-backed Directors

“Consumer review Web site Angie's List came to an agreement with activist investor TCS Capital Management, paving a smoother road for a sale. Angie's List said Tuesday it will add three dissident-backed directors to the board.” THE STREET
 

UC Davis Chancellor Pressured to Resign from DeVry Board

“For-profit college company DeVry Education Group announced last week that the Chancellor of the University of California-Davis, Linda Katehi, had joined its board of directors.  Today, after facing criticism from public interest organizations and a California legislator, Katehi quit the DeVry board. The Federal Trade Commission sued DeVry in January for alleged deceptive advertising.  The company also has been under investigation by the U.S. Department of Education and the attorneys general of Illinois, Massachusetts, and New York.” HUFFINGTON POST

From the Archives

Running More Effective Board Meetings (Startups)

“In my first few years of running board meetings I found them frustrating.  I felt that my team and I spent too much time preparing for them and that they were mostly “update” meetings to remind investors what we did and what we were working on.  I got very little value from them despite having very smart and talented people around the table.  I’m sure many of you feel that way…. I think our investors walked away with a very good understanding of our businesses and always complimented us for being their most thorough and prepared board.  But I felt like it wasted too much of OUR time. So I changed things up and became much happier with my results.  Here are some notes on what I did differently and what I’ve learned since then.” BOTH SIDES OF THE TABLE via BOARDSPAN

A Seat at the Table


LVMH Moët Hennessy Louis Vuitton proposes to elect to its board Clara Gaymard, former CEO of GE France, and Natacha Valla, a former executive director at Goldman Sachs and current deputy Director of CEPII, a French economics think-tank.   Capital One Financial Corporation appoints former chief information security officer at Amazon.com Tom Killalea as a new director. xAd, provider of real-time, location-based mobile marketing solutions welcomes two new directors: John Costello, president of global marketing and innovation at Dunkin' Brands and William "Bill" Zerella, CFO of Fitbit. ExtraHop, provider of real-time stream analytics for IT operations and business intelligence, appoints Mark Anderson, EVP of worldwide field operations for Palo Alto Networks, to its board of directors.  Semtech Corporation, a semiconductor maker, appoints as its newest director Ye Jane Li (Jane Li), a strategic advisor to private equity firm Diversis Capital and former COO of Huawei Enterprise USA. Vitamin Shoppe welcomes to its board Guillermo Marmol, formerly an executive at Electronic Data System Corporation. The board of directors of medical diagnostics company Hologic elects Christopher J. Coughlin, formerly COO of Tyco International and current board member at Allergan, Alexion Pharmaceuticals and Dun & Bradstreet; Coughlin was named "Director of the Year" by the National Association of Corporate Directors in December. Duke Energy, an electric power holding company, welcomes Charles “Wick” Moorman, former CEO and executive chairman of Norfolk Southern Corp., as a director assigned to the board’s nuclear oversight committee.   The James Irvine Foundation appoints Maria Anguiano, UC Riverside vice chancellor for planning and budget, to its board of directors. VerifyMe, maker of physical, cyber and biometric technology solutions to prevent identity theft, welcomes a new chairman of the board: Cybersecurity expert Michael Madon, CEO of next-generation learning platform Ataata and former VP at RedOwl, a behavioral analytics software company that addresses insider security risks.  Jive Software welcomes to its board Phil Koen, an expert in running cloud companies and executive chairman of Intermedia.
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