March 24, 2016 - Issue 2.12 - 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.

Entering Bizarro World: Valeant Pharmaceuticals, reeling for months amid accusations of financial misconduct, this week loses its CEO, gains a new director in activist investor Bill Ackman, and finds that its former CFO, who has been implicated in its troubles, refuses to leave the board. Meanwhile a board-approved comp plan requiring officers to maintain large stock holdings has cost current Valeant CFO more than $4 million. At United Airlines, activists continue to wage a proxy battle for six board seats, even as the stock price soars. And, in news that seems a good deal saner, Salesforce carries on building a powerful board with the addition of a prominent former European tech regulator.

The Hot Seat


Valeant Says Goodbye to CEO…

“Drugmaker Valeant Pharmaceuticals International said on Monday its chief executive officer is leaving and billionaire investor William Ackman would join the board as it tries to clean up accounting problems and save its business. The Canadian company, whose operations include prescription drugs, consumer products, and Bausch & Lomb eye care, has lost nearly 90 percent of its value as it came under public scrutiny for its pricing and distribution practices, including investigations by Congress and various government agencies. Valeant blamed accounting issues on "improper conduct" by top finance executives.” REUTERS

…While Former CFO Won’t Go

“Valeant Pharmaceuticals International Inc.’s former chief financial officer and current board member Howard Schiller has been accused by the embattled drugmaker of misconduct, and yet the one thing the company can’t get him to do is quit. Schiller’s unusual step of refusing to resign from the board, despite Valeant’s request that he do so, could lead to fractures among directors. Valeant’s bylaws specify that board members can be removed by a supermajority vote of other directors if he or she “ceases to be qualified to act as a director of the company.” BLOOMBERG BUSINESS

... And Current CFO Loses Sleep and Money

“Robert Rosiello spent 30 years building a successful management consultant career at McKinsey & Co. The Harvard MBA helped healthcare technology and consumer companies make acquisitions and improve financial performance, rising to become senior partner in charge of the global merger practice for a decade. He is on the board of Catholic Charities of New York and the Pew Research Center. But at the age of 57, Rosiello made a decision that has not worked out so well. He became chief financial officer of Valeant Pharmaceuticals….” FORBES

Across the Board

Curated news and insights from the world's boardrooms.


Salesforce: Lessons in Building a Power Board

“One of the most powerful regulators in European tech in the last decade has found a landing place outside of the halls of Brussels. Today, CRM giant Salesforce announced that Neelie Kroes — a former vice president of the European Commission, European Commissioner for Competition, and European Commissioner for Digital Agenda — is joining its board of directors. She is the second high-profile ex-government figure to join the board in as many years, following the appointment of General Colin Powell almost exactly two years ago — a sign of how the company continues to eye up the public sector for lucrative service contracts.” TECH CRUNCH

Imagine United Airlines as a Reality Show

“Even by the insane standards for corporate drama that have prevailed in the airline industry since the days of Charles Lindbergh, what’s happening these days at United qualifies as bizarre. Throw in the fact that the proxy fight to replace six of the company’s directors with a minority slate that includes a successful, self-aggrandizing former airline CEO is happening at a time when United’s stock is on a tear – up nearly 25% in 45 days – and you’ve got the makings of a potboiler of a TV show. Only Hollywood script writers wouldn’t dare present such a story to producers. Nobody would believe it.” FORBES

Farewell, Andy

“While much has been written about [Andy Grove’s] time at Intel and his rise to the CEO and Chairman positions, very few know about his work over the past 15 years in remaking Intel into a model of corporate governance and improving diversity inside Intel. He remade Intel's board of directors, making sure it was truly independent, and packed with diversity. Grove's influence is seen in Intel's separation of CEO, President and Chairman positions -- which is atypical in tech companies.” ZDNET

Madame, Please Take Your Seat!

“French companies are up against a deadline: They have until 2017 to meet new quotas for female representation on their boards…. Competition for women candidates is becoming fierce as corporations try to close that gap. The scarcity of qualified women is forcing companies to look abroad—more than half of this year’s female board appointees are foreign. It’s also prompting them to go after the same candidates. Clara Gaymard, the former head of General Electric in France, has been appointed to three new boards this year and she already sits on another. That’s not exactly the picture of diversity.” FORTUNE

Insiders Make Better CEOs

“My research on succession … revealed that CEOs brought in from outside the company succeeded less often than insiders even when the company’s poor performance would seem to have justified going outside for a new leader. The reasons were straightforward: An outsider often did not know the industry or its suppliers, customers, or competitors, nor did they know the capabilities of the company and its people. While they might be good at cutting costs, they rarely knew enough to manage growth and innovation. Often outsiders would ‘clean up the company’ and then sell it. While shareholders might benefit, the company was lost as a competitive force in its field.” HARVARD BUSINESS REVIEW

Hey Twitter, What’s Shakin’?

“Last year, amid a cratering stock price, slowing user growth, and a spate of executive departures, Twitter Inc.'s board decided to put co-founder Jack Dorsey in as chief executive. Ten months later, all the same problems remain. But Dorsey has a clearer message about what he wants to change and how he wants to change it. As investors speculate about who will buy Twitter and when, Dorsey has allowed himself to think years down the road….” BLOOMBERG BUSINESS

From the Archives

A Better Governance Model?

“‘Despite significant recent progress in the area of governance, work remains to be done if the many governance needs of large, complex institutions are to be met,’ notes Bob Contri, vice chairman, Deloitte LLP, who leads the U.S. Financial Services industry group and U.S. Banking and Securities sector. A governance operating model, which defines the mechanisms and interactions through which governance is put into action, can be an important tool for boards to enhance their oversight capabilities while enabling management to implement governance initiatives. ‘A governance operating model supplies the “how” that board members seek and can reveal gaps or shortcomings in board or management committee charters,”’Mr. Contri adds.” DELOITTE via BOARDSPAN

A Seat at the Table

Ann Marie Fudge, former chairman and CEO of Young & Rubicam Brands at WPP Group, joins the board of defense contractor Northrop Grumman. Tax-service firm H&R Block adds new director Angela N. Archon, COO for the Watson Health business unit of IBM. The board of Angie’s List welcomes Mike Sands, CEO and co-founder of Signal, supplier of real-time, cross-channel marketing technology. Former AOL CFO Karen E. Dykstra becomes a member of the board at VMware, a cloud infrastructure and business mobility company. Shutterfly’s new CEO Christopher North, former managing director of Amazon UK, takes a seat on the board of the Internet-based photo publishing service. Evolving Systems, a provider of real-time activation, analytics and marketing for connected mobile devices, welcomes new director Matthew Stecker, former VP of mobile entertainment for RealNetworks. Standard Life CEO David Nish joins the board of HSBC Holdings, Europe’s largest bank.  USA Technologies, a payment technology service provider appoints to its board Robert L. Metzger, who is on the faculty of the University of Illinois at Urbana-Champaign’s College of Business as the Director of the Investment Banking Academy.  Meg FitzGerald, EVP of strategy and policy at Cardinal Health, joins the board of biotech firm Concert Pharmaceuticals., an online destination for finding and managing family care, appoints Chet Kapoor, managing partner of Tenzing Global Management to its board.XPO Logistics, a supply-chain solutions supplier, appoints to the board Gena L. Ashe, former chief legal officer of The Brickman Group, a commercial landscape maintenance company.
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