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July 21, 2016 - Issue 2.29 - 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.
Board politics. While power moves within the board room are hardly novel, the phrase is taking on new meaning as politicians, including Hillary Clinton, Donald Trump, and Britain's Theresa May weigh in on governance issues like board composition and executive compensation. Meanwhile, Facebook finds itself, again, defending the rights of its provocative director Peter Thiel to take actions that don't represent the views of the board, this time as he takes the stage at the Republican National Convention in support of Trump... If this campaign season is giving you—and your CEO—a little agita, you may want to read on to understand how anxiety impacts a CEO's decision making and learn how the board might work with an anxious executive to ensure the best outcomes.

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The Hot Seat

CEO Pay Comes Under Fire From Trump, Clinton, & May

“Presidential candidates once campaigned on taxes, government spending, and foreign policy. But more recently, executive compensation has become a hot topic for winning the public’s approval. In the U.S., Donald Trump has called high CEO pay ‘a total and complete joke’ and ‘disgraceful,’ arguing that CEOs stack boards with their buddies who rubber-stamp excessive pay. Hillary Clinton has lamented that ‘There’s something wrong when the average American CEO makes 300 times more than the typical American worker.’ And in the UK, Theresa May launched her ultimately successful campaign to become Prime Minister with a speech that proposed to curb executive pay.” HARVARD BUSINESS REVIEW

Across the Board

Curated news and insights from the world's boardrooms.


Facebook OK With Director's Speech at GOP Convention

“Facebook said that the upcoming speech by board member and investor Peter Thiel at the GOP convention is ‘personal.’ ‘Peter Thiel is attending and speaking at the RNC in his personal capacity. He is not attending on behalf of Facebook or to represent our views,’ said Facebook in a statement. A Facebook spokesperson also noted that Thiel did not need the company’s permission to speak at the GOP event, when asked by Recode if he had cleared the appearance in support of presumptive Republican nominee Donald Trump.” RECODE
 

Thiel Joins Board of Stealth Startup Zenreach

"If you’ve used free wi-fi in San Francisco, there’s a good chance you’ve used Zenreach and just don’t know it yet. The company, until now, has flown largely under the radar, because they wanted to amp up their business quietly for competitive reasons. And they’re finally ready to announce themselves and their new $30 million Series B funding. (Their previous $20 million in funding was super hush-hush). They are also welcoming billionaire investor Peter Thiel to their board." TECH CRUNCH
 

Britain's Theresa May Takes Aim at Elitist Boards

“Britain’s new prime minister, Theresa May, is the leader of the Conservative Party there. Yet when it comes to the corporate world, she can sound more like Bernie Sanders than Margaret Thatcher. …To wit, she criticized companies that are run by directors drawn from too ‘narrow’ social classes. Graduates of Eton, Harrow, Oxford and Cambridge should not dominate corporate boards. Instead, she called on corporations to cater more to their stakeholders. This means not just adding consumers to the board but employees, too, as is done in Continental Europe.” NEW YORK TIMES


10 Trends Changing Board Conversations...

In just 2 minutes! WOMEN CORPORATE DIRECTORS


Viacom Board Saga Continues

“Viacom CEO Philippe Dauman and chief operating officer Tom Dooley were given ‘good reason’ to resign when Sumner Redstone summarily removed Dauman and four other directors from the corporation’s board last month, the two executives charged in letters to the conglomerate’s top attorney. Both said in letters from their lawyer Friday that they are prepared, if necessary, to invoke clauses that allow them to resign under certain circumstances, which include changes in the company’s board that do not comport with guidelines laid out in their employment agreements.... Dauman’s contract would pay him as much as $83 million when he exits, according to a Bloomberg report. Dooley stands to get $63 million...” VARIETY
 

Theranos Advisory Board Member Continues to See Promise

“Blood testing company Theranos may be under federal investigation and its CEO banned from operating a lab for two years, but it still has at least one believer. On Tuesday, Dr.William H. Foege, who is part of Theranos’ Scientific and Medical Advisory Board, published an op-ed on political news site TheHill.com outlining his reasons for joining and continuing to support the embattled company. 'In my opinion, the very foundation of Theranos’ inventions—and its hundreds of patents—is incredible,' writes Foege. 'The company’s intellectual property is clearly robust, and many potential partners still request meetings to learn more about the technologies.'" FORTUNE

 
Should You Worry About That Anxious CEO?

“Psychology research has shown that anxiety influences decision making—for example, job anxiety can cause people to fixate on potential threats, thus missing big opportunities. This made us wonder whether boards or employees should be worried about anxiety influencing their CEO’s strategic decision making in ways that might hold back their firm. We interviewed 84 CEOs and other top executives of major corporations to find out...We found that more-anxious leaders (those that were described as experiencing job anxiety ‘to some extent,’ ‘to a considerable extent,’ or ‘to a great extent’) took fewer strategic risks than their less anxious peers in order to avoid potential losses. Job anxiety reduced the attractiveness of big strategic bets for the company, despite their potential to drive large gains.” HARVARD BUSINESS REVIEW
 

Think Twice Before Responding to An Activist Investor

“After years of support for companies that hand board seats to activists to avoid a bruising public fight, some of the world's largest institutional investors are pushing back. BlackRock Inc, the world's largest asset manager, and Norges Bank Investment Management, Norway's $872 billion sovereign wealth fund are among the major funds resisting, encouraging companies to consult them before responding to an activist. These investors argue that in certain cases, giving board seats to frustrated shareholders with a shorter-term investment horizon could jeopardize the company's long-term performance.” REUTERS
 

United Continental  Staves Off Proxy Fight

“United Continental Holdings Inc. completed the last step in an April agreement with two airline investors that  staved off a proxy fight by appointing a mutually agreed 15th member to its board of directors. Edward ‘Ted’ Philip, chief operating officer of the global nonprofit health care organization Partners in Health, was appointed to the airline’s board on July 14, United said Tuesday in a federal filing. Mr. Philip, 51, is a former investment banker, Walt Disney Co. executive and founding member of internet search company, Lycos Inc.” WALL STREET JOURNAL

From the Boardspan Archives

Why Getting Directors on Board with Risk Management Matters

"When the idea of corporate risk management was only related to financial risks, it was simple to see where on the org chart responsibility for it should fall. In today’s business world, it’s much more complicated, and regulators have been pushing boards to do more oversight. Wharton accounting professor Christopher Ittner has been researching the results of these changes: Do they make a real difference to internal behavior or the bottom line, or are companies just going through the motions? In this interview with Knowledge@Wharton, Ittner talks about who should be monitoring risk, who shouldn’t, and what the right choices can do for a business." KNOWLEDGE@WHARTON via BOARDSPAN

A Seat at the Table

  • Alternative asset management firm Blackstone Group appoints to its board venture capitalist Jim Breyer,  also a director at 21st Century Fox and formerly on the boards of Facebook, Marvel Entertainment, Etsy, Dell, and Wal-Mart.
  • Publishing company Houghton Mifflin Harcourt appoints to its board Tracey Weber, former president and COO of the online shopping site Gilt Groupe.
  • Commercial printing company Quad/Graphics welcomes two new board members: Steve Fuller, former SVP and CMO of clothier L.L. Bean, and John Fowler, who will soon retire from his role as EVP of global strategy and corporate development at Quad/Graphics.
  • Foodservice distributor US Foods Holding elects two new directors: David Tehle, former CFO of bargain retailer Dollar General, and Court Carruthers former group president, Americas for industrial supply company W. W. Grainger.
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