Director's Domain June 27, 2022
Boardspan Inc.
Better boards create better outcomes | Board governance digital solutions | Trusted by leading boards in all sectors
Trouble ahead? A majority of CEOs surveyed believe a recession is nearing or, in some locations, already here. The tech sector seems to concur: 95 companies in what had been a high-growth industry have laid off some 48,000 people so far this year. As the economy slows down, so too has investor support for ESG efforts, with shareholders voting down a greater percentage of sustainability-related proposals this year than last. Elon Musk dominates the news this week, as Tesla shrinks its board with the departure of Oracle founder Larry Ellison; SpaceEx fires employees who aimed to bring criticism of Musk to management; and the Twitter board recommends that shareholders vote in support of Musk’s acquisition of the social media platform.
BOARDS ADD VALUE: At Boardspan, we spend a lot of time talking to board members about the ways they add value and the many challenges they’re facing. Check out this?two-minute video?that highlights what we’ve learned.
In the Spotlight
Survey: Most CEOs Expect a Recession
“Most top executives say they think a recession is looming or already here, according to a new survey, reflecting a rapid deterioration of the economic outlook among business leaders. More than 60% of CEOs expect a recession in their geographic region in the next 12 to 18 months, according to a survey of 750 CEOs and other C-suite executives released Friday by the Conference Board, a business research firm. An additional 15% think the region of the world where their company operates is already in a recession.”?WALL STREET JOURNAL
Tech Sector Layoffs Accelerate
“Once the nation's fastest-growing sector, the number of technology companies laying off employees has increased every month since January, reaching 95 in June, affecting more than 48,000 people, according to data from Trueup…. During last week's Federal Open Market Committee meeting, the median projection for real GDP growth in 2022 was downgraded from 2.8% to 1.7%. Additionally, while the national unemployment rate has hovered around 3.6% for the last three months, economists at the US Federal Reserve now expect that number to reach 3.9% by 2023.”?NEWSWEEK?
_______________________________________________________
Across the Board
Shareholder Support Falls Short for Sustainability Proposals
“U.S. companies faced a record number of shareholder votes on environmental and social issues this year, but investor support was lukewarm for proposals calling for more ambitious climate targets…. Shareholders have so far voted on a record 274 sustainability-related proposals this year, up 41% from last year… About three dozen more votes are expected by the end of the year…. Despite the record number of proposals going to a vote, average support fell to 27% from 32% last year, the Sustainable Investments Institute said.”?WALL STREET JOURNAL?
Larry Ellison to Exit Tesla Board
“Tesla said it would ask shareholders to approve its second stock split in less than two years at its upcoming annual meeting, after teasing a split earlier this year…. Tesla also revealed billionaire Larry Ellison, co-founder and executive chair at Oracle, would step down from the company's board at the annual meeting, and that it won't seek to replace him, reducing the number of board seats to seven.”?FORBES?
SpaceX Fires Employees Involved with Letter Criticizing Elon Musk
“SpaceX has fired at least five employees who were involved with circulating a letter around the company that was critical of CEO Elon Musk, according to… an internal email from President and COO Gwynne Shotwell…. Shotwell, in a company wide email Thursday, said SpaceX ‘terminated a number of employees involved’… The letter was addressed to company executives, according to media reports, and described the billionaire’s public behavior as ‘a frequent source of distraction and embarrassment’ for SpaceX employees.”?CNBC
Twitter Board Recommends Shareholders Approve Sale to Musk
“Twitter’s board of directors has unanimously recommended that the social media company’s shareholders vote to approve its sale to Elon Musk, according to a regulatory filing… The board said in the filing that it determined ‘none of the possible alternatives to the merger,’ including staying independent or pursuing a different acquirer, were likely to be better for shareholders than the Musk deal.”?CNN
Report: Women CEOs Earn Less Than Male Counterparts
“…female CEOs are paying themselves even less compared with their male counterparts, according to the latest report from San Francisco-based accounting firm Kruze Consulting. The report analyzes 250 seed and venture-funded startups in America and finds that the salary gap between female and male startup CEOs grew four times wider in 2022 from what it was in late 2019. The differential clocks in at $20,000 in 2022, up from $5,000 in 2019. Compared with 2021, 2022 saw an increase of only $1,000 annually for female CEOs, while male CEOs saw a $5,000 salary increase.”?INC?
Could Starbucks’s Next CEO Come From Its Board?
“Starbucks' hunt for a new chief executive officer has no shortage of complications: The coffee giant’s crucial China business is sputtering and its US stores are grappling with unionization efforts, potential turnoffs for plum candidates. The company lacks natural internal successors after the departure last year of two C-suite leaders…. The complex demands suggest the company is likely to tap a director as its next CEO… Schultz is set to stay on as interim leader until a handoff in the first quarter of 2023….”?YAHOO FINANCE?
Successfully Navigating the “G” in ESG
"Class actions alleging the board of directors breached its fiduciary duties have become increasingly prevalent, as shareholders seek to hold companies liable for operations management, even across multiple corporate layers…. These cases implicate governance factors, the 'G' in 'ESG,' which are focused on executive compensation, shareholder rights, and how a company is managed and holds itself accountable, such as through audits and internal controls.... Companies should maintain a detailed record of the board’s oversight and compliance efforts, especially for operations that (1) could allow for embezzlement or other asset diversions; (2) deal with safety; and (3) that drive revenue."?NATIONAL LAW REVIEW
WWE Board Probes Allegations of CEO Misconduct
“Vince McMahon, the longtime face of and force behind the WWE and the company’s chairman and CEO, is stepping aside pending an investigation into ‘alleged executive misconduct’ by a special committee of the board of directors…. The Wall Street Journal earlier this week surfaced allegations that McMahon had secretly paid $3 million to a former female employee with whom he had conducted an affair…. The board started looking into the matter in April, the WSJ report says.”?DEADLINE
DocuSign CEO Steps Down
“DocuSign CEO Dan Springer is stepping down, the company announced Tuesday. The decision comes after the e-signature software maker lost more than 60% of its value year to date…. Chairman of the Board Maggie Wilderotter will serve as interim CEO as the company begins its search for the next executive.”?CNBC
From the Boardspan Library
Crisis Management in The Era of No Normal
“While people are hoping for a ‘new normal’ corporations may need to prepare for an era of ‘no normal’ reflecting the ever-evolving health impact of the COVID-19 pandemic, the associated economic and social disruptions, and the tectonic shifts underway in the role of corporations in addressing environmental and social issues as well as the shift from stockholder to stakeholder capitalism….The good news is that at many companies, the pandemic helped to increase the level of transparency and trust between management and the board….That trust and transparency will also go a long way to helping boards and CEOs manage prolonged periods of crisis amid fundamental business changes.”?THE CONFERENCE BOARD via BOARDSPAN
_______________________________________________________
Seat at the Table
Boardspan congratulates?Karl Deily, former SVP and COO of food packaging company Sealed Air, on his appointment to the board of food processing equipment supplier Bettcher Industries. Boardspan is delighted to have advised Bettcher Industries on this placement.?
We offer our congratulations to all recent placements:
_______________________________________________________
About Boardspan
Learn more about?Boardspan?and schedule a complimentary strategy call with our team.
Boardspan?is the leading provider of digital governance solutions for boards across all sectors. Our cloud-based assessments, dashboards, benchmarking analytics, and governance education programs complement our board search and advisory services to deliver a holistic approach to governance. Boards of all sizes and stages rely on Boardspan to deliver analytics, insights, and outcomes that improve their effectiveness and performance. Clients include KKR, The Kellogg Foundation, Ingersoll Rand, Farfetch, McAfee, Beyond Meat, Box, e.l.f. Beauty, Satellite Healthcare and the U.S. Olympic & Paralympic Committee.