June 9, 2016 - Issue 2.23 - 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.
An activist board?! The business press is brimming with tales of activist investors reshaping companies to be more profitable, and also with advice columns pushing boards to be more strategic. But it’s rare to find stories that shed light on just how a strategy-focused board can reshape a company. This week’s Bloomberg Business article about the Microsoft board offers a rare glimpse of an experienced group of directors pushing a company to make strategic and life-assuring changes. Facebook’s board, meanwhile, shows it is serious about succession planning. And a new study shows that a "nice CEO" may not be the one you want.

There are lots of board appointments to take stock of this week. If you know of any we missed, please drop us a line:

The Hot Seat

Concerned Board Pushes Microsoft to Shift Strategy

“Board members at Microsoft Corp. are grappling with a growing concern: that the company’s traditional software business, which makes up the majority of its sales, could evaporate in a matter of years — and Chairman John Thompson is pushing for a more aggressive shift into newer cloud-based products…. The board members’ concern was born from experience. Thompson recounts how fellow director Chuck Noski, a former chief financial officer of AT&T, watched the telecom carrier’s traditional wireline business evaporate in just three years as the world shifted to mobile. Now, Noski and Thompson are asking whether something similar could happen to Microsoft.” BLOOMBERG BUSINESS

Across the Board

Curated news and insights from the world's boardrooms.

Facebook Board Prepares for Eventual Passing of Torch

“Facebook cofounder and CEO Mark Zuckerberg has a tight grip on the company, thanks to special shares he owns that give him majority voting control. But even absolute power doesn't last forever. And Facebook is changing its rules so that if Zuckerberg ever leaves the company, his control of it will vanish into thin air… ‘These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company,’ Facebook's board wrote in its proxy filing.” BUSINESS INSIDER

The Art of Succession Planning

“Lawrence E. Kurzius laid out plans to replace himself as chief executive of McCormick & Co. when he met with the company’s board in late January at its headquarters here. The timing was unusual: It was the week before the 58-year-old had even started the top job at the world’s largest spice maker. Succession planning gets discussed early and often at the 127-year-old manufacturer, a lesson learned in part by the unexpected death of a previous CEO and heart problems that forced the subsequent chief’s premature exit.” WALL STREET JOURNAL

Hint: If You're Looking for Women Directors...

“When women hold key leadership posts like chief executive officer or board chairman, companies have women in more than 27 percent of director seats, compared with less than 18 percent when men are in charge, according to a study released Monday by the advocacy group 2020 Women on Boards. The group wants women to hold at least 20 percent of all board seats at U.S. companies by 2020, up from 17.9 percent now. Almost 90 percent of businesses led by women already meet that goal.” BLOOMBERG BUSINESS

"Nice" Is Nice, But "Decisive" Is Key

“A CEO we’ve worked with – let’s call him ‘Gary’ – prides himself on being a collaborative leader who invests in consensus and builds relationships. Gary cares deeply about his employees and is eager to deliver. When he was first hired a couple of years ago, the board was deeply impressed by Gary’s values, trustworthy demeanor, and his collaborative approach. Unfortunately, by the time we met Gary, his habits as a ‘nice CEO’ were about to cost him his job…. While being amicable is correlated with being hired as a CEO, ghSMART’s CEO Genome Study with SAS Institute reveals that CEOs with high decisiveness are 12 times more likely to deliver strong performance…” HARVARD BUSINESS REVIEW

Older, Long-Term Directors: A Blessing or a Curse?

“Mutual-fund board members are getting older and staying longer, raising questions about whether extended tenures improve or harm the oversight of trillions in savings…. Boards of several funds have members in their 80s and 90s who have served for decades.” WALL STREET JOURNAL

Are You Ready to Tango with Activist Investors?

“Whether they are seen as ruthless corporate raiders or a much-needed wake-up call for management teams often depends on no more than your perspective of the situation at hand, but as activist investor funds surpass $100 billion in assets under management, the landscape grows more complex by the day… This means that the focus of this activism increasingly goes beyond a call to firms to hike up their dividends or share buyback programs and is now often more about strategy, governance, and environmental issues...“ CEB

Burger King and Its All-Male Board

"The brash bro culture of Burger King that plays to young male consumers craving fiery chicken fries isn’t so welcome in the boardroom, especially in Canada. Burger King’s parent needs to add women to its all-male board, says a Vancouver-based investor who became a shareholder when the company took over the Canadian doughnut chain Tim Hortons in 2014." BLOOMBERG BUSINESS

A 27-percent Stake, and No Board Seat for Now

“Elevate Credit's updated IPO prospectus includes the online lender's latest financials, as well as a new revelation: Sequoia Capital no longer has a partner on the board. Former Sequoia partner Michael Goguen was an Elevate director until news surfaced in March of a sexual abuse lawsuit filed against him. When Sequoia fired Goguen, the storied Silicon Valley venture firm was expected to replace him on the board. But in Elevate's filing on Friday, which said Goguen was removed from the board on March 11, the list of directors didn't include a Sequoia partner. The firm remains the largest investor with a 27 percent stake. Sequoia's seat is now occupied by the first female on Elevate's nine-person board.” CNBC

From the Boardspan Archives

Assessments: More Value Than You Realized

"When designed thoughtfully and accurately, an assessment can be thought of as a two-way street: In one direction, it communicates organizational expectations and evaluates cultural fit, and in the other direction, it seeks to understand personal competencies, experiences, preferences, and personal fit. Board assessments can be particularly valuable when the issues they address call directors’ attention to the organization’s needs and expectations, while also soliciting directors’ feedback on ways to make the board more effective. Rather than an invitation to be tested or judged, an assessment of this type becomes an opportunity to increase your understanding of the board on which you serve and the role you play on it." BOARDSPAN
A Seat at the Table

★ Nolan Bushnell, founder of the Atari Corporation and Chuck E. Cheese, joins the board of MGT Capital Investments, a cyber-security technology portfolio company headed by John McAfee. ★ OnDeck, an online lending platform for small business, elects to the board Daniel S. Henson, former CMO of GE and CEO of a number of GE Capital's commercial lending businesses. ★ SpringCM, a cloud-based sales contract management platform, welcomes to its board Dan Dal Degan, a former VP of sales at ★ Vincent Roche, president and CEO of semiconductor maker Analog Devices Acacia Communications, joins Acacia Communications, maker of high-speed coherent optical interconnect products. ★ Matthew J. Espe, former CEO and chairman of Ricoh Americas and previously of IKON Office Solutions, joins Veritiv a supplier of print, publishing, packaging, and facility solutions as well as logistics and supply chain management services. ★ William Smithburg, former CEO and chairman of the Quaker Oats Company joins the board of ChromaDex, a supplier of patented ingredients for dietary supplements, skincare and pharmaceuticals. ★ Christina Morrison, former SVP finance for Aramark joins the board of InVivo Therapeutics Holdings, a biotech company focused on treatments for spinal cord injuries. ★ Signal, a real-time, people-based marketing company, appoints to its board Jai Shekhawat founder and former CEO of Fieldglass, a cloud-based procurement system acquired by SAP. ★ Kristine Stewart, VP of media for Twitter, joins the board of theScore, maker of mobile apps for sports fans. ★ The non-profit Sustainability Accounting Standards Board, which provides sustainability accounting standards for use by publicly listed corporations, welcomes two new directors: Alan Beller, senior counsel at Cleary Gottlieb Steen & Hamilton and Ken Mehlman, member & global head of public affairs, KKR. ★
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