February 6, 2020 - Issue 6.04 - Your weekly news on all things board.
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Moving on. More high-profile CEO departures are in the works: Jeff Weiner steps aside to become executive chairman at LinkedIn. Ginni Rometty hands the reins to Arvind Krishna at IBM. The CEO of Ocean Spray Cranberries loses his job for violating the company's harassment policy. It's too early to know whether Credit Suisse CEO Tidjane Thiam will survive the spying scandal at the bank, but shareholders are rallying behind him and some suggest that Chairman Urs Rohner should back the CEO or step down himself. Also, WeWork names a new CEO: real estate veteran Sandeep Mathrani. Meanwhile, an executive at  L Brands, the parent of Victoria's Secret, found herself literally locked out of her workplace after trying to alert the board to allegations of harassment.

In the Spotlight

Credit Suisse Shareholders Rally Behind CEO, Challenge Chairman

“The balance of power at the top of Credit Suisse Group AG is shifting in favor of Tidjane Thiam after key shareholders came out to back the chief executive officer in a clash with Chairman Urs Rohner. After a week in which Harris Associates’ David Herro stepped up his rhetoric against any plan to oust Thiam, other major shareholders also came forward to call for an end to the leadership crisis. Silchester International Investors, a secretive U.K. investment firm, joined Herro in demanding that Rohner should step down early if he refuses to back Thiam. U.S. fund Eminence Capital said it was 'imperative' the board affirm its support for the CEO.” BLOOMBERG

Opinion: Bank's Leaders Should Take Responsibility, Change Culture

“The Credit Suisse Group AG spying scandal, where top wealth manager Iqbal Khan was tailed after agreeing to join arch-rival UBS Group AG, has raised deeply uncomfortable questions about the Swiss bank’s governance — and drawn scrutiny from regulators....Whatever the outcome of the [directors'] deliberations — whether they back Thiam or turn to a successor — responsibility for the debacle of the last few months needs to be shared across the leadership team. If not, how will Credit Suisse convince shareholders and clients that it’s genuinely turning the page on this ugly chapter? Repeated failures to oversee key personnel warrants a full accounting; a pervasive culture of acrimonious rivalry between senior figures isn’t one person’s doing.” WASHINGTON POST

Across the Board

Jeff Weiner Steps Down as CEO of LinkedIn

"The last three and a half years haven’t been so great for social media platforms…. Amid this drama, Jeff Weiner, the CEO of LinkedIn, has been like a man whistling as he bikes safely beside the century’s craziest car crash. His company has quietly grown, gained influence, and avoided acrimony. The worst that people generally say is that it’s all been pleasantly boring. And so it’s fitting that on Wednesday, Weiner is stepping into a new role in a calm, sensible transition, seemingly designed to make as few waves as possible. He’s announcing that, after 11 years running the company, he will become executive chair in June. His replacement will be Ryan Roslansky, a senior vice president of product at the company who was the first person Weiner hired.” WIRED

WeWork Names New CEO

“WeWork has taken its first significant step in the post-Adam Neumann era, naming a new chief executive officer to run a company whose challenges abound. Real-estate-industry veteran Sandeep Mathrani is to take over this month, a critical move in the company's bid to rebuild after a failed initial-public-offering attempt and the departure of Mr. Neumann, its co-founder and former chairman and CEO.” MARKETWATCH

L Brands Exec Locked Out After Taking Harassment Claims to Former Board Member

“In the more than two years since Harvey Weinstein was exposed as a sexual predator, the #MeToo movement has wrought a revolution in corporate governance — or so it would seem. Corporations have diversified their boards with experts on inclusion. Board members have attended harassment training sessions and updated codes of conduct. Procedures have been established for handling complaints that reach the board. A key tenet: No one who brings a credible allegation to the board should face retaliation … Which makes L Brands’ recent treatment of one of its highest-ranking female executives, Monica Mitro, all the more troublesome.” NEW YORK TIMES

Ocean Spray CEO Removed for Violating Harassment Policy

“Ocean Spray Cranberries Inc. announced the company has fired their chief executive officer for allegedly violating their policy against harassment. Bobby Chacko, a 25-year veteran in the food and beverage industry, is being succeeded by James D. White, who previously served as President and CEO at Jamba Juice. It is unclear how Chacko violated the company’s anti-harassment policies.” BOSTON 25 NEWS

Rometty Hands Reins to Krishna, IBM's New CEO

“Ginni Rometty is stepping down as CEO of IBM in April after an eight-year tenure that saw the 108-year-old tech company go through a difficult transition to the cloud-computing era, the company said Thursday…  She will be replaced as chief executive by Arvind Krishna, IBM's senior vice president of cloud. That same day, Jim Whitehurst, the CEO of IBM's Red Hat subsidiary, will become president of IBM. IBM bought Red Hat for $34 billion in a deal announced in 2018 that closed in July.” BUSINESS INSIDER

Former Aetna CEO Ousted from CVS Board

“CVS Health Corp.’s  announcement Monday that former Aetna Inc. Chief Executive Mark Bertolini will leave the CVS board exposed tensions underlying one of the biggest U.S. health-care mergers. Mr. Bertolini joined the board after the pharmacy operator paid nearly $70 billion to buy the health insurer in 2018. The two companies promised an ambitious health-care transformation, melding their varied businesses of filling prescriptions, managing drug benefits and providing health insurance to reduce costs and improve customer experience … But afterward, Mr. Bertolini didn’t retain an executive role, instead joining a board dominated by CVS directors, with the company led by CVS Chief Executive Larry Merlo.” WALL STREET JOURNAL  

PG&E Will Overhaul Board to Meet Governor's Demands

“PG&E Corp. pledged to shake up its board of directors and increase its safety focus in a bid to win California’s support for its bankruptcy exit plan, but obstacles remain in appeasing Gov. Gavin Newsom. The company, which filed for bankruptcy protection last year because of its liabilities from numerous deadly wildfires, said Friday evening that it will replace many of its current directors and expand safety positions and performance metrics after it emerges from chapter 11 … The governor has threatened a state takeover of the company if it fails to address his concerns. His aides are exploring the possibility of creating a state power authority or converting the company into a customer-owned cooperative, among other options.” WALL STREET JOURNAL

State Legislator Introduces Bill for Public Takeover of PG&E

“California Governor Gavin Newsom has threatened a state takeover of PG&E Corp. if the bankrupt utility giant doesn’t shape up. Now he has a framework to do it. State Senator Scott Wiener introduced a bill Monday that would kick off a process by which the state assumes control over PG&E by buying its stock, according to his staff. The utility would be run by a municipal board -- enabling access to cheap tax-free financing -- but operated by a public benefit corporation, a private entity that would allow PG&E workers to avoid being subject to government employment rules. Municipal bonds paid back over time by ratepayers would finance the transaction.” BLOOMBERG

The 5 Types of Intelligence You Need To Be A Successful Director

“To better understand what makes a director successful today, we conducted interviews with more than 50 board members representing some of the world’s leading companies. We found that boardroom capital is built on five different types of intelligence: financial, strategic, relational, role and cultural.  The categories might not surprise you, but it is important to understand why all are necessary and to think about how to improve in each area.” HARVARD BUSINESS REVIEW

From the Boardspan Library

How Boards Can Get In Front of Ethical Lapses

“Most corporate boards have learned to act quickly when a scandal breaks…. It is now the rare board that doesn’t launch an independent investigation quickly when misbehavior is reported. But the responsibility of the board to prevent scandals is more important than the responsibility to clean up the mess once it has emerged. Here most boards are still at the starting gate. Recent legislation and guidance embodied in the Federal Sentencing Guidelines clearly require the board to take a key role in preventing ethics failures before they happen. This is more complicated than calling in the outside lawyers once disaster happens.” MARKKULA CENTER FOR APPLIED ETHICS via BOARDSPAN

Seat at the Table

Boardspan extends congratulations to Julio Nemeth, chief product supply officer at Procter & Gamble, on his appointment to the board of The Boston Beer Company. Boardspan is delighted to have advised the Boston Beer Company board of directors on this appointment. 

Boardspan also congratulates three new members of the interim board of directors for USA Table Tennis, the national governing body for the Olympic sport: Richard Char, advisor to digital gift card manufacturer Lazlo 326;  Kristy Connelly Campbell, VP at cybersecurity firm Proofpoint; and Kelly Watson, former partner at KPMG. Boardspan is pleased to have advised the USATT interim board of directors on these appointments.

We congratulate all new board members on their appointments:
  • Drew Houston, CEO of Cloud storage company Dropbox, is appointed to the board of social media giant Facebook 
  • Biotechnology company Moderna appoints to its board Sandra Horning, M.D., former chief medical officer at Genentech 
  • Manufacturing company Materion appoints to the board Emily Liggett, former president and CEO of NovaTorque, an electric motor manufacturing company
  • Dr. Christine "Kricket" Seidman, a professor at Harvard Medical School, and Kathy J. Warden, chairman, CEO and president of defense contractor Northrop Grumman Corporation, join the board of pharmaceutical company Merck
  • Pharmaceutical company Gilead Sciences appoints to its board Dr. Sandra Horning, former chief medical officer and global head of product development for biotech company Roche
  • Lithium battery manufacturer welcomes two new directors to its board: former CEO of battery manufacturer Boston-Power Dr. Christina Lampe-Önnerud; and  founder and president of Argentine mining consulancy Geo Logic Pablo Marcet
  • Carlisle Companies appoints to its board Maia A. Hansen, a senior partner at McKinsey & Company
  • Yael Cosset, SVP and CIO at grocery chain Kroger, joins the board of department store chain Kohl’s
  • Yeti Holdings, an outdoor goods manufacturer, appoints to its board Frank Gibeau, former CEO of gaming company Zynga 
  • Simon Paris, CEO of London-based fintech company Finastra, joins the board of Everbridge, a software company that helps enterprises automate and manage responses to critical events
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