September 1, 2016 - Issue 2.35 - 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.
How boards think and “feel” about issues makes a difference: The board of Mylan, critics say, should have demanded that the company curb its price increases to keep the EpiPen affordable—and to spare the firm the media bloodbath of recent days. Others are wondering if the board of the Tronc media company is wise to continue rebuffing the acquisitive advances of Gannett. And new research suggests that boards packed with industry experts may actually have a harder time making the best future-looking strategic decisions. This and the latest news on women in the boardroom, “undesirable” CEOs, and the Uber-Alphabet boardroom breakup in this week’s Director’s Domain.

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The Hot Seat

Mylan’s Board to Blame for EpiPen Scandal! (A Rant)

“Together with … Mylan's esteemed board of real estate developers, bankers, lawyers, medical educators, and corporate executives, [Mylan CEO Heather Bresch’s] leadership has steered the company into the maelstrom of public controversy around the insanely expensive EpiPen…. But let's get real. If we don't want our kids to die from a bee-sting or a peanut, we should demand accountability where it's really due – the Patent Office that granted an unjustified and unpatentable monopoly, the FDA which props up the illusion, and a board of directors at Mylan who don't take the time to inform themselves of their own company's misdeeds.” CNBC

Across the Board

Curated news and insights from the world's boardrooms.

Women on Boards More Likely to Have Tech Experience

“If you want a director with plenty of tech experience on your board, hire a woman. According to new Accenture research, female members of corporate boards are nearly twice as likely as their male counterparts to have professional technology experience, which the study defined as either holding a key tech position at a previous employer—such as CTO or CIO—or having senior-level responsibility at a technology firm…. This study helps to debunk the commonly held belief that the paucity of female directors—women held one in every five board seats at S&P 500 companies last year—is due to a lack of qualified women.” FORTUNE

Boardroom Breakup: Uber and Alphabet, Too Close for Comfort

“Uber Technologies Inc. on Monday said a longtime Alphabet Inc. executive has left its board as the two tech companies increasingly clash over the future of transportation and logistics. David Drummond, senior vice president of corporate development of Alphabet, stepped down several weeks ago as concerns over conflicts of interest between the two companies mounted…. Mr. Drummond joined Uber’s board in 2013 when ride-sharing was still nascent. His departure from the board now signals how important of a player Uber has become in Silicon Valley.” WALL STREET JOURNAL

BlackRock Hits Back at Exxon Directors Who Gagged Board

“BlackRock Inc withheld support from two high-profile directors at Exxon Mobil Corp, securities filings show, a rare spat apparently driven by a board communications policy at the world's largest energy company….While spokesman for BlackRock and Exxon declined to comment, BlackRock's reasoning for the votes appears to be spelled out in a recent governance report on its website. The report describes how BlackRock executives tried to discuss strategy and capital allocation with independent directors of an unnamed ‘large oil and gas corporation,’ but were rebuffed because of a policy against such talks. As a result, BlackRock said it withheld support from the company's lead independent director and the chair of the committee that set the policy.” REUTERS

How Many Experts Can Your Board Handle?

“We conducted a study, recently published in the Academy of Management Journal, to learn more about a neglected dimension of board composition: the proportion of domain experts. That is, the percentage of directors whose primary professional experience is within a firm’s industry.… Common sense might suggest that the more experts, the better. Domain experts know the ins and outs of an industry and are highly skilled at assessing risks and opportunities. But our interviews with board members and CEOs in the banking industry—and decades of research on experts and teams—point to three factors that can compromise the effectiveness of expert-dominated boards, at least in some circumstances…” HARVARD BUSINESS REVIEW

Is Tronc Board Right to “Just Say No?”

“Gannett’s battle to acquire Tronc, the newspaper publisher formerly known as Tribune Publishing, raises the question of whether a board should continue to ‘just say no’ or give in to a hostile acquirer.” NEW YORK TIMES

Monsanto Bids Farewell to Director Accused of Sexual Harassment

“William Parfet, a longtime Monsanto board member who is facing sexual harassment allegation in a civil lawsuit, resigned from the company's board of directors Wednesday. Creve Coeur-based Monsanto disclosed Parfet's resignation in a regulatory filing but did not give a reason for his departure. 'The board has elected to not immediately fill the vacancy on the board arising as a result of Mr. Parfet’s resignation,' Monsanto's filing states. Parfet, an heir to Upjohn Co. founder W.E. Upjohn, was the top executive at MPI Research in Mattawan, Mich., until earlier this year.” ST. LOUIS POST DISPATCH

Boards Rarely Fire CEOs

“Every day, some tech startups are surpassing their numbers while others are struggling to keep going… There’s no shortage of ways things go wrong. Markets change. Companies underestimate the cost of doing business. Sometimes, too, the CEO isn’t getting the job done. In fact, you might feel very certain that your CEO is one of these people, and you may be tempted to complain to your company’s board members about it. You might be disappointed if you do. However well-intentioned they may be, most board members won’t push a CEO out the door unless they have no other choice. Though VCs in particular talk up the help they provide to startups, when it comes to trouble within a company’s executive ranks, it’s, well, complicated.” TECH CRUNCH

From the Boardspan Archives

Do CEOs Really Make The Best Directors?

“'The popular consensus is that CEOs make the best board members because of their current strategic and leadership experience,' says David Larcker, professor at the Stanford Graduate School of Business. In the 2011 Corporate Board of Directors Survey, when asked about potential problems a full 87% of respondents said that active CEOs are too busy with their own companies to be effective directors. A third of the respondents said that active CEOs were 'too bossy/used to having their own way.'" ROCK CENTER FOR CORPORATE GOVERNANCE via BOARDSPAN

A Seat at the Table

  • PepsiCo elects to its board Darren Walker, president of the Ford Foundation, (the second largest private foundation in the United States), and chair of the United States National Advisory Board on Impact Investing.
  • Global pharma company Eli Lilly welcomes to its board Jamere Jackson, CFO of the information and measurement company Nielsen Holdings
  • Andreas Fibig, chairman and CEO of International Flavors & Fragrances  and former president of Bayer HealthCare Pharmaceuticals, joins the board of the agribusiness company Bunge Limited
  • Pliant Therapeutics, a company focused on breakthrough treatments for fibrotic diseases, welcomes to its board Suzanne Bruhn, Ph.D., former president and CEO of Promedior, a clinical-stage immunotherapy company
  • InfoGPS Networks, a provider of cybersecurity and compliance management services, welcomes to its board Greg McCray, former CEO of Aero Communications, of ACAL Energy Ltd., and of Antenova
  • Oclaro, a provider of optical communications solutions based in San Jose, CA, appoints to its board Denise Haylor, CHRO at Royal Philips, based in The Netherlands
  • Castlight Health, a health benefits platform provider, welcomes to its board Kenny Van Zant, former head of business at Asana, provider of cloud-based SaaS project management tools
  • Miramar Labs, a company focused on medical devices and treatments for aesthetic issues, appoints to its board Patrick F. Williams, former SVP and CFO at ZELTIQ Aesthetics, a medical technology company
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