How to structure the leadership of large corporations – and specifically whether to split or combine the roles of Chairman and CEO – remains an active and often controversial question.
Under recent shareholder pressure, Walt Disney Company preemptively amended its corporate governance guidelines to require the board of directors to provide annual justification whenever the roles are combined, as they currently are. At Disney and an increasing number of major corporations, the board is obligated to revisit the structure question on a regular basis.
This year has seen a traditional mix of profiles and ages. Traditional categories of investors, CEOs/COOs, and CFOs. There were surprisingly few executives that were pure CFOs, and an increasing number of executives that have CIO/CTO backgrounds.
Microsoft appointed activist shareholder president of ValueAct Capital, a firm that owns $2b of Microsoft Stock.
Splitting Roles to Appoint CEO
Most corporations that split the role did so as to promote a candidate to the CEO role, five of the six for internal candidates and one external candidate. In one case for the internal candidate, TIBCO, the change was precipitated by Vista Equity Partners. The TIBCO case is the only one where the former CEO does not stay.
Satya Nadella’s Great First Year as Microsoft CEO
Microsoft appointed company veteran Satya Nadella, 46, as CEO and board member. Bill Gates, 59, assumed a new role on the Board as Founder and Technology Advisor. John W. Thompson, 64, formerly CEO of Symantec, was named Chairman.
Trend 1 - Activist Shareholders & Protecting Star Execs
Happy New Year!
2014 saw many changes in technology company boards and executive ranks. This newsletter summarizes some of these changes and identifies some patterns and potential trends we observed. The sections are as follows:
Boards with high turnover are as a result either of disappointing results, shareholder pressure, or outstanding results and strategic re-positioning.
Vell Executive Search examined board appointments 83 major technology companies in 2013. We looked at 83 companies in the software, digital media, telecom and tech services sectors. For he patterns of these appointments, and more details, please refer to the entire study, per below.
Happy New Year!
This newsletter summarizes Board of Director changes in major technology companies in 2013. We looked at 83 companies in the software, digital media, telecom and tech services sectors.
Vell Executive Search has summarized Board of Director changes in major technology companies in 2013. We looked at 83 companies in the software, digital media, telecom and tech services sectors.
The characteristics of the boards who completed the survey were dramatically different, even among companies doing business in the same industry. Perhaps one of the most insightful differences is the make up of the board members’ professional backgrounds and industry experience. For example, there were large variances among companies in the proportion of board members who are company officers, venture capitalists, major investors and independent outsiders.
The average board represented in the survey hosts six members. This mirrors the NACD’s survey of entrepreneurial boards. The finding suggests that boards of small technology firms are substantially smaller than boards at most public corporations. For example, a 2006 study conducted by Spencer Stuart, a global executive search firm headquartered in Chicago, showed that the average S&P 500 firm has 10.7 members on its board. That same study shows a mere 15% of S&P 500 firms have eight or fewer board members.
The evidence is in and the overarching conclusion is this: Entrepreneurial companies are flying solo, with little in the way of best practices for their boards. The Entrepreneurial Boards Composition Survey reports a wide variance in board practices, such as a broad range in the frequency of board meetings (from 4 to 12). It is clear that small- to midsized companies must take action to develop and incorporate best of breed practices for their boards of directors in order to derive the maximum benefit from members and to attract world-class talent.
There is little research to help companies develop best practices for attracting, retaining, rewarding and drawing value from their boards. Often, chief executives are unsure of the appropriate: intervals for board meetings, compensation, and diversity of the board’s members.