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January 14, 2016 - Issue 2.2 - 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.

People power. Nothing could be more important to a company’s success than those who lead and advise them, and this week’s news is all about finding the right mix of players. From a critique of Valeant’s CFO-heavy board to an Apple shareholder’s proposal to recruit more people of color into senior executive and director roles, board composition is a hot topic. And shareholders are quickly gaining more say in that composition: Some 21 percent of S&P 500 companies now embrace proxy access—up from just 1 percent in 2014. Meanwhile, a tough retail season is playing out in the boardroom, where both Kohl’s and Macy’s face potential activist-investor action.

The Hot Seat

 

Apple to Shareholders: Just Say No to Mandated Diversity

“A controversial shareholder proposal that would mandate Apple increase the racial diversity of its senior management team and board of directors will be up for shareholder consideration at the company's annual meeting in February. Apple's annual proxy statement, published this week by the SEC, reveals that Apple acquiesced to the inclusion of the proposal, submitted by shareholder Antonio Avian Maldonado, II, after the SEC's Division of Corporation Finance published a letter in support of the plan… Apple's Board of Directors … recommends shareholders vote against it.” THE MAC OBSERVER
 

Across the Board

Curated news and insights from the world's boardrooms.

 

How Many is Too Many CFOs for One Boardroom?

“Valeant Pharmaceuticals’s 12-person board is comprised of what experts describe as a strikingly large number of executive-level finance professionals, at least four… That includes [ex-CFO Howard] Schiller, one current CFO of another company, an ex-accountant and the former head of treasury for a big telecommunications company…. The question is whether this abundance of financial acumen is coming at the expense of other skills that may be nearly as important for a well-functioning board.” WALL STREET JOURNAL/CFO JOURNAL (subscription)
 

More Turbulence for United Airlines Board

“One thing is certain. The final chapter of the strange ongoing saga of United Airlines and its ailing CEO Oscar Munoz has by no means been written. But it's now apparent the Chicago-based airline's board of directors hedged its financial bets — by at least a couple of million bucks or more — on whether its heart-attack-stricken CEO will stay at United for the long haul. As recently as last week, the board noted in a statement after Munoz's heart transplant that it is focused on the best interests of United Airlines shareholders.” HOUSTON BUSINESS JOURNAL
 

Can Kohl’s Outsmart Activist Investors?

"Kohl’s board of directors fears the retailer might be next on activist investors’ list, according to the Wall Street Journal. So the department store chain may hire an investment bank to advise it on various alternatives to combat any incursion by such investors, worried that the company’s big stock swoon in the past year could attract unwanted attention. One such option is going private..." FORTUNE
 

Must Board Consider a Macy’s Without Herald Square?

"Activist hedge fund Starboard Value stepped up pressure on Macy's Inc. to squeeze money out of the department-store chain's real estate, which the firm values at $21 billion. Separating the properties into two or more entities would create $10 billion in shareholder value, the investment firm said in a presentation that was sent to Macy's. The idea would be to put the chain's iconic properties, such as its flagship location in Manhattan, into one joint venture, while placing its mall-based real estate into another. An operating company would then continue to run the stores.” CRAIN’S CHICAGO BUSINESS


Boards Give Investors Greater Say

“American businesses are increasingly bowing to investors’ demands for greater boardroom clout, with dozens of companies revising their bylaws in recent weeks ahead of this year’s annual meetings. Proxy access, embraced by 117 U.S. companies during 2015, gives shareholders more power to oust directors and influence corporate strategy by letting them list competing board candidates on ballots for annual meetings. About 21% of S&P 500 companies have adopted proxy access, up from about 1% in 2014…” WALL STREET JOURNAL (subscription)


Secrets of Corporate Governance

“By examining board behavior, it will become apparent how to create a strong culture. The first place to look is the board agenda, which serves as a vehicle for the directors around the table to engage both strategically and productively. Materials with exhibits and executive summaries should be distributed at least five business days in advance, which provides directors with the opportunity to digest the information and come fully prepared to participate in business discussions. This creates the beginning of a culture that sets professional expectations throughout the organization.” FORBES
 

Media-Savvy Board Members Are Your Friend

“A study completed recently at the University of Texas at Dallas – Naveen Jindal School of Management looked at the positive difference made to a firm’s publicity in newspapers and other outlets when there is at least one member of the Board of Directors who is a media professional of some type. “…Specifically, we show that a board member with media expertise enhances the firm’s ability to manage how the firm is portrayed in mass media.” EVERYTHING PR


Who’s Better at Strategy: CFOs or Strategists?

“The 1990s saw the rise of the strategic CFO, and more recently many companies have created a chief strategy officer (CSO) position. For chief executives, developing a good strategy is a management challenge that, at its best, involves maximizing the unique contributions of very different executives and, at its worst, requires managing counterproductive tension and turf wars between CFOs, CSOs and, quite often, business-unit heads. Such friction is destructive — and a huge missed opportunity, because the CFO and the strategy head are far more effective when they collaborate.” HARVARD BUSINESS REVIEW

A Seat at the Table


The Walt Disney Company announces that Nike president and CEO Mark G. Parker is joining the Disney board of directors. Starbucks welcomes Mary Dillon, CEO of Ulta Beauty, to its board of directors; she will serve on the board’s compensation and management development committee. ★  PayPal appoints to its board Wences Casares, CEO of bitcoin company Xapo and recognized next-generation payment and crypto-currency thought leader; Casares will serve on the compensation committee. SGI, a global leader in high performance solutions for compute, data analytics, and data management, welcomes new director Nina Richardson, former COO of GoPro. As previously announced, TiVo CEO Tom Rogers steps out of the executive suite and into the role of non-executive chairman, while Wendy Markus Webb, CEO of Kestrel Corporate Advisors and a former Disney exec, joins the board and its audit committee. Network control company Infoblox appoints Edzard Overbeek, formerly SVP of Cisco’s global services business, to its board. A. Eugene Washington, MD, MPH, chancellor for Health Affairs at Duke University and president and CEO of the Duke University Health System, is named to the boards of directors for Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals. Thomson Reuters Founders Share Company, part of the Thomson Reuters Group, appoints to its board Ronald G. Close, former CEO of Pelmorex Media, and Kim Williams, former CEO of News Corp Australia. The Sustainability Accounting Standards Board, a non-profit organization that provides sustainability accounting standards for use by publicly listed corporations in the U.S., welcomes three new directors: Audrey Choi, CEO of Morgan Stanley's Institute for Sustainable Investing; Arnie Pinkston, JD, former general counsel at Allergan; and Laura Tyson, PhD, professor and director of the Institute for Business and Social Impact at the Berkeley Haas School of Business.
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