March 5, 2020 - Issue 6.08 - Your weekly news on all things board.
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Crisis management is on many minds this week as the coronavirus puts the global economy through its paces, and boards consider their role in assessing and limiting risk. Meanwhile, activist investors are raising their voices: one aims to replace Twitter CEO Jack Dorsey and claim as many as four seats on the Twitter board, another is pressuring Barclays to fire its American CEO over his relationship to sex offender Jeffery Epstein. More CEO turnover is in the news, with both Amtrak and Harley-Davidson announcing departures from the corner office. Hawaii's legislature, following the lead of California and others, sends a bill to the state senate that would require the boards of public companies based on the islands to include at least one woman.

In the Spotlight

Coronavirus: Business In The Era of Disruption

“Companies have endured financial meltdowns, civil wars and natural disasters. Now they are confronting a different kind of menace: a fast-spreading virus that has abruptly dented demand and supply across industries and continents. The novel coronavirus, which has infected more than 85,000 people, has swept through Asia and Europe, disrupted global travel and hobbled supply chains that churn out everything from smartphones to pharmaceuticals … The epidemic’s widespread nature and related uncertainty will put a hold on large corporate investments, mergers and hiring, said Stanford University economist Nicholas Bloom, who has researched the impact of uncertainty on business cycles.” WALL STREET JOURNAL

What Boards Can Do To Mitigate Risks During The Virus Outbreak

“As infections and deaths from the coronavirus continue to spread around the globe, it might be time for corporate boards to assess the impact a prolonged fight to contain the illness will have on their business … It will be important for boards to attack this problem by anticipating how the spread of the coronavirus will affect its stakeholders and then communicate how the company plans to deal with those issues. Companies will want to get out in front of any potential shortages that could anger customers and any bad news that could spook investors. Boards will want to remember that this is an emergency situation that could last for months, so any plans to deal with the impacts of the coronavirus must be able to change at any moment.” CORPORATE BOARD MEMBER

Across the Board

Activist Investor Aims to Remake Twitter Board, Find Full-Time CEO

"Activist investor Elliott Management Corp. has taken a sizable stake in Twitter Inc. and plans to push for changes at the social media company, including replacing Chief Executive Officer Jack Dorsey, according to people familiar with the matter. The New York-based firm has nominated four directors to Twitter’s board, said the people, who asked to not be identified because the matter isn’t public." BLOOMBERG

Amtrak Names New CEO

“Amtrak, the national railroad that is caught in a political stalemate over its pleas for help saving century-old infrastructure in New York City, has chosen its next leader. William J. Flynn, 66, will succeed Richard Anderson, 65, as Amtrak’s chief executive on April 15, the company announced on Monday. Mr. Flynn is the chairman and former chief executive of Atlas Air Worldwide Holdings, which operates cargo airlines and other airfreight businesses. Mr. Flynn would be the third veteran executive from the transportation industry to run Amtrak in the last three years.” NEW YORK TIMES

Erik Nordstrom Becomes Sole CEO of Nordstrom

“Nordstrom said Tuesday it is changing its leadership structure to retire its co-presidency, and naming Erik Nordstrom as its sole CEO. It announced the changes as it reported fourth-quarter earnings and sales that missed analysts’ estimates, sending shares tumbling.… Nordstrom also said it will be shrinking its board to 10 directors from 11, and establishing a new 10-year limit for members. Both of its former co-presidents, Erik and Pete Nordstrom, will remain on the board. Pete will become president of Nordstrom Inc. and chief brand officer, the company said.” CNBC

DoorDash Added Woman Director Ahead of IPO Filing

"Before DoorDash Inc. filed to go public, its board of directors first needed a change. The food delivery company with a historically all-male board of directors announced on Thursday that it filed for an initial public offering, the same day a new study found women are increasingly winning seats on the boards of top IPOs. DoorDash had eight men on its board of directors before August, when it added a woman without fanfare. The addition of Google alumna Shona Brown to its board wasn’t announced by DoorDash for another five months.... The disclosure came on the same day that Goldman Sachs Group Inc. Chief Executive Officer David Solomon said his bank will no longer take a company public if it lacks a director who adds to the board’s diversity. Goldman is underwriting the DoorDash IPO..." BLOOMBERG

Harley-Davidson CEO Departs, As Sales Decline

“Harley-Davidson CEO Matthew Levatich is leaving the struggling motorcycle maker. The Milwaukee company announced Friday that Levatich will leave his post and seat on Harley’s board of directors. Board member Jochen Zeitz will become acting president and CEO while a board search committee is formed and Harley hires an outside search firm to fill the job … Harley has been struggling with declining sales in the U.S., its biggest market, as it tries to adapt to an aging customer base while looking to expand markets overseas.” WASHINGTON POST

Barclays Pressured to Replace CEO Over Ties to Epstein

“Barclays PLC Chief Executive Jes Staley came under renewed pressure Monday after an activist investor called on the bank to withdraw its support for its American CEO because of his professional relationship with the late financier and convicted sex offender Jeffrey Epstein … Mr. Staley’s interactions with Mr. Epstein date to at least 2000, when Mr. Staley led JPMorgan Chase & Co.’s private bank and Mr. Epstein was a client. They remained in contact after Mr. Epstein pleaded guilty in 2008 in a Florida state court to soliciting prostitution from an underage girl.” WALL STREET JOURNAL

GE's Former Long-Time CEO Jack Welch Dies

“Jack Welch, who led General Electric through two decades of extraordinary corporate prosperity and became the most influential business manager of his generation, died on Sunday at his home in Manhattan. He was 84.” NEW YORK TIMES

Hawaii’s Women-On-Boards Bill Advances to State Senate

“A bill that would require publicly traded corporations based in Hawaii to include women on their boards of directors has advanced in the state Senate, but it is facing resistance from business advocates … The bill would require public corporations with its principal executive offices in Hawaii to have at least one female director on their boards by the end of 2020.” HAWAII PUBLIC RADIO

$1.28 Trillion UK Pension Fund To Hold Directors Accountable for Climate Risks

“In its updated annual stewardship and voting guide, the UK’s Pensions and Lifetime Savings Association (PLSA), whose members are responsible for approximately £1 trillion ($1.28 trillion) in pension assets, said plan investors need to hold the directors of the companies they invest in accountable for the way they manage climate change risks … The PLSA said the guide is particularly relevant this year because of new regulations introduced in October that require trustees to disclose how they include financially material environmental, social, and governance (ESG) factors in their investment decisions.” CHIEF INVESTMENT OFFICER

Not Whether, But How, Does A Board Consider Stakeholders’ Interests?

“The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and investor associations, but also the aspirational 'best practices' that have come to have equivalent influence on board and company behavior … The focus on stakeholder governance has shifted from the question of whether a board of directors should take into account the interests of other stakeholders, to how a board should do so.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE

From the Boardspan Library

The Board’s Role in Crisis Management (9 Recommendations)

“A prompt, definitive and well-thought out response to an emerging crisis is critical in successfully managing the crisis, particularly in today’s sound bite-driven world, which equates silence with guilt. Stockholders, customers, suppliers, employees and regulators all need to be reassured that the matter is being handled in a timely and efficient manner. Given the array of important and more immediate items that are competing for a board’s attention, advance crisis management and planning is not often a priority. However, given the potential costs of a mismanaged crisis, a well-planned response to a crisis is a low-cost, high-reward endeavor. Such a response can only come from a company that has a plan in place prior to the crisis.” ALSTON & BIRD via BOARDSPAN

Seat at the Table

Boardspan offers congratulations to Shveta Mujumdar, VP of corporate development at Intuit, on her appointment to the board of mortgage firm Mr Cooper. Boardspan is delighted to have advised Mr. Cooper Group on this appointment.
We extend our congratulations all new board members on their appointments:

  • GE elects to its board former U.S. Secretary of Defense Ashton (Ash) Carter 
  • Susan Hockfield, former president of the Massachusetts Institute of Technology (MIT),  joins the board of pharmaceutical company Pfizer
  • Technology company Neustar elects to its board Patrick Jabal, SVP of Google
  • Home audio company Sonos welcomes two directors: Deirdre Findlay, CMO at publisher Conde Nast; and Joanna Coles, former chief content officer at Hearst Magazines
  • Gokul Rajaram, executive at food delivery service DoorDash, joins the board of social media company Pinterest
  • Pamela Thomas-Graham, former chief marketing and talent officer at Credit Suisse, joins the board of real estate technology firm Compass
  • Allan Leinwand, SVP of software manufacturer Slack Technologies, joins the board of software company Anaplan
  • Gibraltar Products, a building materials manufacturer, appoints two directors to its board: Linda K. Myers, partner at Kirkland & Ellis; and Atlee Valentine Pope, CEO of consulting firm Blue Canyon Partners
  • Transportation company Schneider National appoints to its board Robert M. Knight, CFO of Union Pacific
  • Pharmaceutical company Sanofi appoints two new members to its board: Rachel Duan, former SVP of GE, and Lise Kingo, CEO of the corporate sustainability program UN Global Compact
  • Media company Corus welcomes three new directors to its board: former Google executive Alex Carloss; Stephanie Coyles, director at financial services company SunLife Financial; and Sameer Deen, executive at communications company Univision
  • Annabelle Bexiga, former executive at insurance company American International Group (AIG) joins the board of financial services company NTL FCStonehas
  • Former CFO of General Motors Charles K. Stevens III joins the board of manufacturing company Tenneco 
  • Oil and gas company ConocoPhillips appoints two new members to its board: David T. Seaton, CEO of engineering company Fluor Corporation; and Al Walker, former president and CEO of oil and gas company Anadarko Petroleum
  • Icelandair nominates to its board five new directors: Guðmundur Hafsteinsson, former head of product at Google Assistant; John F. Thomas, senior adviser at consulting firm McKinsey & Company; senior adviser at aviation consultancy firm Plane View Partners, Nina Jonsson; Svafa Grönfeldt, founding member of MIT’s innovation accelerator DesignX; and CEO of Toyota in Iceland, Úlfar Steindórsson
  • National Public Radio (NPR) elects to its board Maria O'Mara, executive director of radio station KUER and PBS Utah
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