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October 1, 2015 - Your weekly news on all things board.
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Director's Notes: News & views for today's boardroom. Brought to you by Boardspan.

This week, “engagement metrics” come to the boardroom: Twitter’s directors, under fire for their slow-motion approach to filling the CEO role, are outed for lackluster participation on the social media network. Large companies across the globe are shown to be forfeiting hundreds of billions of dollars by not engaging women directors. And directors contend that more debate in boardrooms would lead to better decision-making. Meanwhile, there’s no time like the present to ensure you have at least one tech-savvy director and a strategic CFO on your side.

The Hot Seat

 

Analyst to Directors: Tweet or Go Home

“Suntrust analyst Robert Peck squarely put the blame for [Twitter’s] prolonged CEO search on the company’s board … ‘We think that given the company’s turnaround position, it is imperative that the board members show engagement in the product,’ Peck wrote, adding that board members are also more likely to act in the company’s interest if they own a substantial amount of shares. The note went on to show how many shares each current board member owns, and how many times each has tweeted since joining the service." VARIETY

Across the Board

Curated news and insights from the world's boardrooms.

 

Every Board Needs a Techie

“Technology is the most important agent of change today; hardly any industry is immune to both its value-creating and disruptive potential. Yet I perceive a large gap between the direct experience of non-executive directors and the experience required to challenge and support chairmen and CEOs in their quest to bring the best technology to their business.” HARVARD BUSINESS REVIEW


$655B Price Tag for Patriarchy

"In case you weren't already sold on the payoff for companies that prioritize the hiring and promotion of women, a new report shows just how much large, listed companies are losing by not employing female executives on their boards. Last year, publicly-traded companies with all-male boards lost out on a total of $655 billion in potential profits across India, the UK, and the US, research by Chicago, Illinois-based accountancy firm Grant Thornton found." QUARTZ
 

Is Volkswagen's Board Too German

“[Volkswagen’s new CEO Matthias] Mueller was picked by the company’s 20-member supervisory board, 17 of them German or Austrian. Of the nine members of VW’s all-male management board, all but one are German or Austrian. Lack of a broad international mix on that board, especially an executive with U.S. experience, may have compounded Volkswagen’s problems in North America, according to Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany.” BLOOMBERG BUSINESS 
 

When Business Incentives Breed Scandals

“At the root of most corporate scandals lie governance failures. And while the focus of much governance comment and analysis is on the board and the role of institutional shareholders, what happens below board level can be quite as important as behavior in the board room, especially in relation to the incentive structures that mold the actions of employees.” FINANCIAL TIMES (Paywall)


Bringing the Focus Back to Long-term Value

"At their annual meeting this week NACD released its newest report, The Board and Long-Term Value Creation....  Succinctly, the report calls on all boards to help management overcome myopia around short-term results, and increase attention on creating long-term value.... 'Directors need to be active students of the business, seeking out information from multiple sources in preparation for boardroom discussions rather than being passive recipients of data from management. And rather than being dominated by retrospective analysis of past performance, board agendas should provide adequate time for substantive discussion of long-term strategic choices, risks, and opportunities.'” FORBES


Do You Respond Well to Criticism?

“A new boardroom survey conducted by WomenCorporateDirectors (WCD) and Bright Enterprises … found that directors believe that their boards would make better decisions if the board was more open to debate. Over three quarters of the 345 female board director respondents to the survey agreed that their board ‘would reach better conclusions if they were more open to debate and argument,’ and 93% said that succeeding as a board member requires receptivity to criticism.” PR NEWSWIRE


7 Things Audit Committees Should Expect of CFOs

“As a strategist, a CFO can align financial strategy to business strategy for growth, but may also choose to shape growth through finance (for example, finding innovative ways to finance M&A or other investment activity or pricing strategies to grow revenues). Similarly, CFOs can drive change in organizations through levers, such as efficiency initiatives and new ways of measuring and rewarding performance.” DELOITTE/WALL STREET JOURNAL

A Seat at the Table


IBM adds a fourth woman to its board: Hutham S. Olayan, a senior executive at Saudi Arabian conglomerate The Olayan Group, is also on the Morgan Stanley board. Internet radio service Pandora welcomes Mickie Rosen, former SVP of Yahoo's global media & commerce division, to its board. ★  Former Yahoo CFO Susan Decker, who currently sits on the boards of Berkshire Hathaway, Intel Corporation, and Costco Wholesale, becomes Vale Resorts newest director. Encore Capital Group, an international specialty finance company, appoints two new directors: Ash Gupta, chief risk officer for American Express, and Wendy Hannam, formerly of Scotiabank.Storage and IT giant EMC appoints Laura J. Sen, CEO of retail giant BJ’s Wholesale Club as the third new addition to the company’s board this year; the changes are part of a standstill agreement with the activist hedge fund Elliott Management. Southwest Airlines appoints new director Dr. Thomas W. Gilligan of Stanford University’s Hoover Institution. Diane Irvine, former CEO of Blue Nile, takes on the role of non-executive board chairperson at Yelp, after serving as audit committee chair for the company. LPL Financial, a custodian for registered investment advisors (RIAs), elects former U.S. Assistant Attorney General Viet D. Dinh to its board as a member of the nominating and governance committee.
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