'THE DAILY CORPORATE GOVERNANCE REPORT’ (for public company boards, the C-suite and GCs)

? ? ? ? ?Please see the items below with the related links (NOTE: access to link content may be metered, require a no-charge registration or require a paid digital subscription)?

? ? ? ? ? ? ? (i) PwC on board composition: Last month, PwC posted on its?Governance Insights Center?webpage this memorandum, "Board Composition: Building Your Dream Team ", noting in the introductory note that:

? ? ? ? ? ? ? ? ? ? "Board effectiveness begins with and depends on who’s in the boardroom. Management looks to the board for oversight and counsel, and it’s critical that the directors evaluating information and making key decisions be the right people for the company and for the moment. As companies’ operating models shift and the business landscape changes, boards need to adapt in tandem, regularly assessing whether they have the right skills, experience and diversity of thought for the future direction of the company, and refreshing the board as needed.

? ? ? ? ? ? ? ? ? ?"Directors should regularly examine who sits on the board.....Boards today are feeling pressure to make refreshment a priority. Shareholders are increasingly scrutinizing board composition — asking whether the current makeup is best suited for today’s strategy — and some will even vote against individual directors if they feel they have seen too little progress toward reshaping the board. Nominating/governance committees, who often take the lead in assessing and managing refreshment, should assess board skills, consider board refreshment, identify gaps and plan for succession,?ensuring that these processes are robust and occur at least annually. The full board also needs to be engaged and weigh in?so that there is an overall agreed-upon plan to achieve the optimal board composition."

? ? ? ? ? ? ? ? ? The memorandum identifies and discusses six actions boards should take to improve their effectiveness. Below are excerpts from two of them, "Assess board skills and attributes", which includes a link to this board composition matrix , and "Tackle director tenure":

? ? ? ? ? ? ? ? ? "Assess board skills and attributes: ......The board is an assemblage of skills, experience, personalities and perspectives that must continuously adapt to the changing business environment and the company’s shifting strategy.....The board should consider not only skills and expertise but other attributes such as diversity of perspectives. Diversity goes far beyond gender — it can mean race, ethnicity, age and even geography......

? ? ? ? ? ? ? ? ? ? ? ? ?A board composition matrix ?can help lay out the board’s knowledge, skills and backgrounds — and can be helpful in determining what’s lacking and/or missing on the board today. With investors increasingly asking for transparency and disclosure on the board’s composition, many boards voluntarily offer this information in their proxy statements.

? ? ? ? ? ? ? ? ? ? ? ? Does the board need deep, technical expertise??Since boards have a finite number of seats, the question of whether a seat should be filled with someone who has only deep, technical skills but not broader business acumen is one that is determined by each board based on the company’s industry, strategy and risk profile. The board must strike the right balance of the skills it needs based on the various topics it oversees. Adding a director with deep but narrow skills poses two key risks:?

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?-- The director may struggle to contribute to other board agenda topics. In this case, the candidate should have both specialist knowledge and broad business and leadership experience to contribute meaningfully to other areas of board oversight.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? — With an expert on the board, other directors may be less willing to voice their opinions on the subject. Ultimately, board decisions are the responsibility of the entire board, so all directors need to consider how they are upskilling themselves to gain understanding and actively engage in decision-making.

? ? ? ? ? ? ? ? ? ? ? ?An alternative to adding a director with specialist skills is to upskill the existing board or committee members. This can be done by having management deliver board education sessions as well as by hearing from external parties or organizations on the topic and attending external training programs.

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? ? ? ? ? ? ? ? ? ? "Tackle director tenure: Many boards look to mandatory retirement ages to spur refreshment. A smaller number of boards use term limits.?But the keys to successful board refreshment are fostering a healthy attitude toward board tenure, guiding director expectations, and conducting effective board, committee and individual director assessments.?

? ? ? ? ? ? ? ? ? ? ? ? ? ? Board leaders should work to instill a culture that encourages directors to think of tenure as earned.?They should set the tone about the length of director service and make that clear during the nomination process. Board members should not assume they will be renominated for service each year — rather, service must be earned with high performance and continued alignment with the company and board composition strategy.

? ? ? ? ? ? ? ? ? ? ? ? ? ? Nominating/governance committees should consider overall director tenure on the board. This is an area in which investors may be particularly interested.?The committee should seek to balance fresh perspectives with institutional knowledge, looking to stagger board member turnover. A leading practice is for leaders to think of the board as one-third recently arrived directors, one-third with medium tenure and one-third seasoned veterans; this can help with succession planning......"

? ? ? ? ? ? ? (ii) Fortune interview with Eli Lilly's CEO/Nvidia and Airbnb CEOs on one-on-one meetings:?

? ? ? ? ? ? ? ? ? ? ?(a) Dave Ricks (age 57) is chair and CEO of Eli Lilly,?and he was recently interviewed by Fortune?in the latest episode of?its?"Leadership?Next"?series of podcasts, discussing several topics including how he energizes and refreshes himself to perform his role as CEO. Below are excerpts from the transcript :

? ? ? ? ? ? ? ? ? ? ? ? ?"Fortune: ....A lot of CEOs I meet are actually introverts, you know, and that by that I mean taking energy from being having that alone time versus energy from the crowd. I know it’s hard to classify yourself necessarily as one or the other, but do you think of that in terms of how you energize and refresh??

? ? ? ? ? ? ? ? ? ? ? ? ? ?Ricks: Yeah, all the time. I think maintaining energy for CEOs is a really important topic?because when you walk in the door, badge in the building, you’re on and you’re not really off until you’re in your private space, which could be 14 hours later. For some people that’s energizing.?I think probably most CEOs over-represent how energizing that is and underrepresent, how much they have to charge the batteries to get ready for that.?Yeah, whether it be in a media interview like this or just going to the cafeteria, like people make judgments about how the company’s doing as employees or investors every time they look at you. So that’s a responsibility we have. I’m, like on Myers-Briggs, like, I’m like right on the line of an E or an I. So I’m in the middle, right in the middle. And for me, I need a little bit of both. I enjoy being around people who I’ve known before I was here because I feel like I can relax a little bit and there’s less of a kind of that onstage thing. And I like social engagement, of course, with family, but my kids are all out of the house now, so there’s less of that and at the same time, I do need some time, like in my little bubble. Often that’s when I’m working out or sometimes going for a walk with my dogs or, you know, for fun. I like to get really away. Like I go to the woods and like hike through mountains and stuff or ski in the backcountry and those moments give me sort of solitude. That’s good too. So like at work, it has to be a balance.?Yeah."?

? ? ? ? ? ? ? ? ? ? ? ?(b) Below is from this Fortune article last Tuesday on Nvidia's CEO, Jensen Huang?,"60 direct reports, but no 1-on-1 meetings: How an unconventional leadership style helped Jensen Huang of Nvidia become one of the most powerful people in business ":

? ? ? ? ? ? ? ? ? ? ? ? ? ? ".......Huang’s humility and down-to-earth persona have made him an effective salesperson for Nvidia’s GPUs, and allowed him to build critical partnerships with top executives at companies such as OpenAI and Microsoft, as well as networking equipment makers like Broadcom. It has also helped him maintain an unconventional management culture—particularly for a company that employs more than 30,000 people.?

? ? ? ? ? ? ? ? ? ? ? ? ? ? "Huang has 60 direct reports and is known, as Haas put it delicately, for “reaching down into different layers of the organization” (or, to put it less delicately, micromanaging). This flat structure can make Nvidia a tough place to work, but Huang sees it as critical to ensuring the organization is strategically aligned and nimble enough to stay at the cutting edge of rapidly evolving chip development and AI progress.

? ? ? ? ? ? ? ? ? ? ? ? ? "Huang says he is allergic to hierarchy and corporate silos. He doesn’t believe in one-on-one meetings. Instead, he prefers mass gatherings of his leadership team: He says all Nvidia execs should be able to learn from the feedback he provides to any one of them, and they should all benefit from watching him together as he puzzles through a problem......"

? ? ? ? ? ? ? ? ? ? ? ?(c) Below is from this Fortune article last Thursday, "Airbnb CEO refuses to have one-on-one meetings because they often turn into therapy sessions ":

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Airbnb CEO and cofounder Brian Chesky doesn’t consider himself to be meeting-averse. But he abhors bad meetings, which he characterizes as too many people in the room with too few active participants. t’s the primary reason why he rejects recurring one-on-one meetings with his team. "The one-on-one model is flawed. It’s a recurring one-hour one-on-one meeting where the employee owns the agenda. And what happens is that they often don’t talk about the things you want to talk about, and you become like their therapist,”?Chesky said in a?recent interview? with Fortune.

? ? ? ? ? ? ? ? ? ? ? ? ? ??"One of his biggest qualms with one-on-one meetings is that they’re limited to just himself and an employee, meaning the issues they raise aren’t heard by others,?which is a missed opportunity for them to learn, brainstorm, share grievances, and hear from one another. Chesky instead prefers to simply call or text employees to get brief status updates. One-on-ones, Chesky said, are best reserved for when employees have a private problem or concern. However, if employees are too frequently complaining privately about workplace matters or something they don’t feel safe bringing up with the whole group, it is an ominous sign that there is a bigger problem within the organization.??

? ? ? ? ? ? ? ? ? ? ? ? ? ?"Chesky prefers meetings with multiple participants,?noting that most of his work actually gets done during meetings. Such meetings allow more employees to weigh in, but he warns that meetings should not include participants for participation’s sake. “Almost every company has too many people, and they are afraid in the name of being inclusive to uninvite people, but that’s not what inclusion is,” Chesky said.?“That’s a slippery slope. You need as few people in a meeting, not as many people.” Often, these large meetings feature a few people who dominate the conversation and many spectators. In his mind, everyone in the meeting should contribute to the discussion; otherwise, the number of meeting attendees should shrink......

? ? ? ? ? ? ? ? ? ? ? ? "To get the most out of meetings, Chesky believes they must have an agenda, invitees must be well-prepared ahead of the meeting, and most importantly, there must be a final decision-maker.?“A lot of times, there’s no clear decision-maker. There’s a bunch of peers trying to agree,” Chesky said.?'Peers can’t agree quickly, so you end up with this committee vibe where people just talk endlessly without making a decision. There has to be a sense of urgency and action'........."

? ? ? ? ? ? ? (iii) press release/SEC filing of the day:?

? ? ? ? ? ? ? ? ? ?(a) Nasdaq-listed The Wendy's Company announced yesterday in this press release ?the appointment of a new CFO from outside the company,?as follows:

? ? ? ? ? ? ? ? ? ? ? ? ?"The Wendy's Company today announced the appointment of?Ken Cookas Chief Financial Officer,?effective?December 2, 2024. He will report to President and Chief Executive Officer?Kirk Tanner?and serve on the Wendy's Senior Leadership Team. Cook will succeed?Gunther Plosch?who has served as Chief Financial Officer since 2016 and will depart the Company at the end of the year after a transition with Cook. Cook most recently served as Head of Financial Planning and Analysis at United Parcel Service and joins Wendy's with 20 years of experience in roles with increasing responsibility across the Finance organization......";

? ? ? ? ? ? ? ? ? ? ? ? As disclosed in the related Current Report filed with the SEC, the new CFO and the company entered into an Employment Letter, the terms of which, including compensation, are summarized in the said Current Report.

? ? ? ? ? ? ? ? ? ?(b) NYSE-listed Madison Square Garden Entertainment Corp. (MSG Entertainment) announced last Friday in this Current Report filed with the SEC that the CFO and the company had agreed that the CFO would leave the company, to be replaced by an interim CFO, as follows:

? ? ? ? ? ? ? ? ? ? ? ? "On November?13, 2024, Madison Square Garden Entertainment Corp. and Michael J. Grau, the Company’s Executive Vice President and Chief Financial Officer, agreed that he will be leaving the Company,?and effective November?20, 2024, will cease to be Chief Financial Officer. Mr.?Grau will receive severance benefits in accordance with the terms of his employment agreement. His separation is not the result of any disagreement with the Company’s independent auditors or any member of management on any matter of accounting principles or practices, financial statement disclosure or internal controls.?

? ? ? ? ? ? ? ? ? ? ? ??"Lee Weinberg will serve as the Company’s Interim Chief Financial Officer effective November?20, 2024.?Mr.?Weinberg, 52, has served as Senior Vice President, Business?& Financial Operations of the Company since the Company’s?spin-off?from Sphere Entertainment Co. in April 2023......"

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