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March 19, 2020 - Issue 6.10 - Your weekly news on all things board.
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Support, resilience and action in the face of adversity.  As the reality of the coronavirus crisis sets in and upends everything, there is a growing consensus among business leaders that the challenges should be met with bold decisions and sacrifices. This is the time to intelligently rewrite the rules so that our collective health and wellbeing is assured. From a plea for businesses to invest in ventilator manufacturing to the offer of free videoconferencing services to K-12 schools, CEOs across all sectors are stepping up to lead. Harvard Business School professors offer multiple perspectives on how executives can use this moment to pave the way to a better future. Offering sage advice to support executives as they manage through the crisis, Boardspan CEO Abby Adlerman and Board Member Mary Cranston pen an open letter to the board community. All of these ideas are worthy of your consideration. And for those eager to hear of other news, Bill Gates steps off the boards of Microsoft and Berkshire Hathaway, while Kenneth Chenault leaves the Facebook board and takes Gates's seat at Berkshire Hathaway.

In the Spotlight

 

Five Ways Board Members Can Help Right Now

“As a board member, your leadership has never been more needed. In this spirit, we share our collective wisdom to help our community of board members be the beacons of leadership and support their management teams on the front lines …  Guide executives … Probe the ‘scariest’ issues … Don't let the most obvious challenges blind you to other possible problems...” BOARDSPAN
 

Opinion: The Business Community Must Step Up to the Plate

“… How our businesses, chief executives and other corporate leaders respond now will play a large part in determining whether we can defeat the coronavirus without paying a huge price in lives and national wealth. Already, many companies across the economy have pitched in to help. But more needs to be done. That’s why we are calling on chief executives and other leaders to commit to a series of concrete steps. A government stimulus is in the works to support our businesses; in the meantime, our businesses need to support our people … This, put simply, is the moment when American business must step up. Wherever we can, however we can, we must meet this unprecedented challenge as generations of business leaders have before us — with the drive of innovation, the spirit of endeavor and a sense of shared sacrifice. What is called for is nothing less than the full strength of our capital, our ideas and our leadership.” NEW YORK TIMES
 

Rewriting The Rules of Business During a Pandemic

“We asked professors of Harvard Business School how the coronavirus pandemic is likely to change how companies do business. Here’s what they said ... Organizations will develop trust-based cultures with employees ... Remote work will become strategic ... The best leaders will break out of silos and improve workplace culture ... In-person meetings will be less important ... Supply chain strategy will be rewritten…” HBS WORKING KNOWLEDGE

Across the Board


Microsoft Founder Bill Gates Leaves Company's Board

"Bill Gates is taking another step back from the company he left Harvard to co-found 45 years ago. Microsoft announced on Friday that Gates is stepping down from the company's board of directors to focus on his philanthropic endeavors.  Gates wants to spend more time dedicated to tackling global health, development, education, and climate change, according to a company statement. He will continue to serve as technology advisor to CEO Satya Nadella." CBS
 

Chenault Steps Off Facebook Board ...

“Kenneth Chenault leaves Facebook's board of directors following disagreements with Mark Zuckerberg over the agency's governance and administrative rules … The declaration that Mr. Chenault won't run for another term on Facebook's board adds to huge turnover [of] many of the tech giant's administrators. The social media company announced the departure of four independent directors last year. They were replaced with people who have preexisting social or business relationships with Mr. Zuckerberg.” TECH TIMES


... And Takes Seat On the Berkshire Hathaway Board, Previously Held By Gates

"Warren Buffett’s Berkshire Hathaway Inc said on Friday that former American Express Co Chief Executive Officer Kenneth Chenault has been nominated to the conglomerate’s board of directors, replacing Microsoft Corp co-founder Bill Gates … Chenault, 68, led New York-based American Express from January 2001 to February 2018, and became one of the most prominent black CEOs in corporate America." REUTERS


Carol Tomé Named New CEO At UPS

“United Parcel Service Inc on Thursday named former Home Depot executive Carol Tomé as chief executive officer, effective June 1. Tomé will replace outgoing Chairman and Chief Executive Officer David Abney, who takes on the executive chairman role before retiring from the UPS board on Sept. 30. Tomé was previously executive vice president and chief financial officer at Home Depot Inc.” CNBC


JUUL Co-Founder Leaves Board

“Juul Labs Inc. co-founder James Monsees plans to leave the e-cigarette maker, stepping down as an adviser and board member, the company said in an email to employees on Thursday. Monsees and Adam Bowen created Juul after working together on their graduate thesis at Stanford University in 2005. The two designed what has become the most successful e-cigarette in the U.S., but it has generated controversy over the potential health risks of vaping and teen use of such products.” BLOOMBERG


Directors Respond to Crisis: Delaying Investments, Reviewing Risks

"Corporate directors, after spending weeks in crisis mode, have begun to plan for the long-term fallout from the coronavirus pandemic on their operations. Thirteen percent of directors said their companies have delayed a planned investment for 2020 because of the outbreak, according to a survey by the National Association of Corporate Directors. The survey was based on a poll last week of 190 directors in a range of industries who mostly serve on public-company boards.... Additionally, 14% of directors said they have reviewed insurance policies and risk-transfer mechanisms that cover supply chains and property." WALL STREET JOURNAL


Norwegian Cruise Line Sued by Investors Over Coronavirus Misinformation

“Amid the coronavirus-induced shock waves that have rocked the cruise industry, a group of investors has sued Norwegian Cruise Line after news articles exposed the company's alleged practice of lying about the severity of the disease in order to keep bookings, which caused the cruise line's stock to tumble.The class action lawsuit, filed in U.S. District Court for the Southern District of Florida, claimed that the class members took financial hits due to the exposure of Norwegian’s alleged false statements to passengers that coronavirus wouldn’t affect their trips.” LAW.COM


New Bidders Appear In Battle to Control Broadcasting Company Tegna

“Private-equity firm Najafi Cos. and faith-based broadcaster Trinity Broadcasting Network have offered to buy Tegna Inc. for cash consideration of $20 a share, adding their bid to a crowded field of suitors … Tegna, one of the biggest broadcasters in the industry, has been in the crosshairs of the activist investor Standard General LP, which owns about 9.7% of the company, according to a securities filing. In January, the hedge fund nominated four candidates to the company’s board, setting up a proxy fight.” WALL STREET JOURNAL


BlackRock Demands Progress On ESG

“BlackRock has pledged to punish the directors of companies that are failing to meet the $7.4tn investment powerhouse’s expectations on issues from executive pay to managing environmental risk in 2020, even as businesses globally grapple with the fallout of coronavirus … Michelle Edkins, global head of BlackRock’s investment stewardship team, said the asset manager wanted to see progress from companies on these issues regardless of the coronavirus outbreak, which has put swaths of businesses under unprecedented pressure. ‘We are looking at these [issues] long term. These are not new issues,’ she said. ‘Companies can still demonstrate that they have effective leadership. In times of crisis that becomes more apparent, not less apparent.’” FINANCIAL TIMES


Lockheed Martin CEO Marilyn Hewson Steps Down

"Lockheed Martin Corp. said Chief Executive Marillyn Hewson is stepping down after six years in the role, and will be succeeded by James Taiclet, effective June 15. Taiclet, 59, a Lockheed board member since 2018, has served as CEO of American Tower since 2003. Hewson, 66, will become executive chairman of Lockheed." MSN


Wells Fargo Board Claws Back $15 Million Of Former CEO’s Compensation

"Timothy Sloan, the Wells Fargo chief executive who left last year after failing to turn around the troubled lender, lost $15 million in compensation after he exited. The company’s board of directors decided to claw back that money, which had been granted to him in early 2019, according to a regulatory filing released late Monday. The disclosure also said he left with no severance. In making its decision, the board took into account the timing of his resignation, the company’s performance and the status of its outstanding regulatory matters, according to the filing." WALL STREET JOURNAL


Massachusetts Pension Board Proposes Board Diversity Requirement for Investing

“Massachusetts’ Pension Reserves Investment Management (PRIM) Board will have new proxy voting guidelines to follow when it’s time for members to provide their opinion as shareholders in their portfolio companies. The guidelines, proposed by Treasurer Deborah Goldberg, represent the latest step in an increasingly stringent pattern of rules set forth by PRIM in proxy voting. Companies are now expected to have 35% of their board comprised of women and people of color, an increase from a 2017 rule that required companies to have 30%. The board passed an initial requirement of 25% in 2015. PRIM will vote against board nominees if the 35% level is not reached.” CHIEF INVESTMENT OFFICER


As California Adds More Women to Boards, Latinas Get Very Few Seats

“Latina candidates are being left behind as California boardrooms add more women, even though Hispanics are the largest and fastest-growing ethnic group in the state. Latina directors were appointed to only 3.3% of new board seats over the last 17 months as the companies scrambled to add women to meet a new state requirement that public boards have at least one female director by the end of last year, according to an analysis released Monday by the Latino Corporate Directors Association. White women gained the largest share, at 78%, the data showed.” FINANCE AND COMMERCE 

From the Boardspan Library

What Boards and Executives Can Learn from Government Crisis Management

"Today - at a time when the well-being of multinational companies can elevate or depress entire economies - corporate executives and boards of directors are facing the same intense pressure the public places on government leaders in Washington, DC: respond to the crisis with transparency, responsiveness and accountability. The public demands that leaders tell people about the problem early on, tell them how you’re going to solve it and demonstrate how it will never happen again. Doing this is a simple formula for crisis management, but it can be a near-impossible one to follow when the pressure is on: Recognize that you’re in a crisis... Form a team... Develop a plan... Understand your reporting obligations...” CROWELL AND MORING via BOARDSPAN

Seat at the Table

  • Software manufacturer BlackLine elects to its board Sophia Velastegui, CTO of operation applications at Microsoft
  • Penny Pritzker, former U.S. Secretary of Commerce, joins the board of payment software manufacturer Finix
  • Cloud security provider Akamai Technologies elects to its board Marianne Brown, former COO of financial services technology provider Fidelity National Information Services
  • Debra Sandler, former chief consumer officer of chocolate for Mars, Inc.,  joins the board of discount retailer Dollar General
  • Health care company NantHealth appoints to its board Deanna L. Wise, SVP and CIO for healthcare company Banner Health
  • Jane E. Kiernan, former CEO of pharmaceutical company Baxter Labs,  joins the board of biotech company Endologix
  • Circuit manufacturer Power Integrations appoints to its board Anita Ganti, former SVP of information technology company Wipro
  • Government services provider Perspecta appoints to its board Betty Sapp, former director of the National Reconnaissance Office, a joint Defense Department-intelligence community organization
  • Judy Cotte, CEO of consulting firm ESG Global Advisors, joins the board of oil company Gibson Energy
  • Cloud-based software manufacturer PayScale, appoints to its board Marc Brown, VP of corporate development at Microsoft
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