NACD's custom, facilitated board evaluations have helped hundreds of boards confidentially assess their composition, their group’s dynamics, and the individual and collective engagement and performance of their members. Our unique approach serves as the foundation for building and maintaining a strategic-asset board. To discuss how NACD can customize an evaluation for your board, please contact Steve_Walker@NACDonline.org, or call 202-572-2081.
Check Board Performance, Not Just the Box
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Delta Air Lines Targets Normal Operations for Midday Wednesday
"Delta Air Lines Inc. said about 90 flights would be canceled Wednesday in a continued spillover from a computer system failure that caused travel havoc Monday," states the Wall Street Journal (Aug. 10, Wall). The cancellations would occur early, with normal operations projected hopefully by midday, reports the nation's No. 2 carrier by traffic. Delta was forced to cancel 775 flights Tuesday after nearly 1,000 were annulled a day earlier when a systems failure occurred in the early hours of Monday. Delta COO Gil West explained yesterday that a "power control module" at the Atlanta-based company's technology center malfunctioned "causing a surge to the transformer and a loss of power." Backup systems failed to kick in as designed. "Delta said it would continue its policy of allowing some passengers to rebook without a fee for another day," notes the newspaper.
NBC News (Aug. 10, Jamieson) is further reporting that Delta is offering $200 in compensation to grounded passengers. Travel experts, though, are advising many to reject the offer because they are entitled to more than triple that amount. The airline said a $200 voucher was available to anyone whose flight was canceled or who was delayed by more than three hours. "However, strict European Union regulations mean that anyone delayed getting across the Atlantic to the United States from one of Delta's dozen or more EU destinations is entitled to claim a cash payment of 600 euros (or $670) per passenger," notes NBC. "European regulation EC261 means passengers can claim 300 euros ($335) if their arrival at the final destination was delayed by between three and four hours." They can seek twice that amount if the delay was more than four hours or their flight was canceled altogether. Additionally, they can submit receipts for the cost of lodging and meals if the carrier didn't provide either of those.
According to USA Today (Aug. 10, Onyanga-Omara), Delta confirms that it has canceled more than 1,700 flights in the wake of the computer systems outage at its Georgia base early Monday. Thousands more flights have been delayed. "We continued today to steadily recover from the events of earlier this week that grounded our system, and are working hard to achieve a normal operation," Dave Holtz, Delta's senior vice president for operations and customer center, wrote in an official statement late yesterday.
Abstract News © 2016 INFORMATION, INC.
NBC News (Aug. 10, Jamieson) is further reporting that Delta is offering $200 in compensation to grounded passengers. Travel experts, though, are advising many to reject the offer because they are entitled to more than triple that amount. The airline said a $200 voucher was available to anyone whose flight was canceled or who was delayed by more than three hours. "However, strict European Union regulations mean that anyone delayed getting across the Atlantic to the United States from one of Delta's dozen or more EU destinations is entitled to claim a cash payment of 600 euros (or $670) per passenger," notes NBC. "European regulation EC261 means passengers can claim 300 euros ($335) if their arrival at the final destination was delayed by between three and four hours." They can seek twice that amount if the delay was more than four hours or their flight was canceled altogether. Additionally, they can submit receipts for the cost of lodging and meals if the carrier didn't provide either of those.
According to USA Today (Aug. 10, Onyanga-Omara), Delta confirms that it has canceled more than 1,700 flights in the wake of the computer systems outage at its Georgia base early Monday. Thousands more flights have been delayed. "We continued today to steadily recover from the events of earlier this week that grounded our system, and are working hard to achieve a normal operation," Dave Holtz, Delta's senior vice president for operations and customer center, wrote in an official statement late yesterday.
Abstract News © 2016 INFORMATION, INC.
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U.S. Productivity Unexpectedly Falls for Third Straight Quarter
"The productivity of American workers unexpectedly declined for a third straight quarter, deepening efficiency woes that have characterized the economic expansion,” Bloomberg (Aug. 9, Jamrisko) states. Employee output decreased at an annualized rate of 0.5 percent from April to June despite a forecast calling for a 0.4 percent gain, according to the latest Labor Department data. Expenses per worker rose 2 percent after declining in the previous period. Uncertainties stemming from flat global economic growth have prompted companies to scale back investment plans and hiring, adds the publication.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Google Ventures CEO Bill Maris Quits
Reuters (Aug. 10) has learned that Bill Maris, the founder and CEO of Alphabet Inc.'s venture capital arm GV, is leaving the company. Maris, who exits this Friday, will be succeeded by GV managing partner David Krane. "GV, previously known as Google Ventures, was founded in 2009 and has invested in more than 300 companies including Uber Technologies Inc. and online retailer Jet.com," according to the wire service.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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ComScore Names New CEO, CFO Amid Accounting Investigation
ComScore Inc. on Wednesday replaced its CEO and CFO as the board of directors' accounting probe dragged into its sixth month, confirms Bloomberg (Aug. 10, Barbagallo). Co-founder Gian Fulgoni has been named CEO, replacing Serge Matta, who will now serve as executive vice chairman and advise his successor. Chief Revenue Officer David Chemerow replaces CFO or Melvin Wesley III, who will exit the company altogether following a transition period. The Internet and entertainment research firm's stock has plummeted ever since it disclosed back in March that its audit committee received a message regarding the company's accounting. "That disclosure was just weeks after ComScore used a stock swap to acquire Rentrak in a deal valued at more than $800 million," recalls the publication.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Activist Pressures Ratner Family to Relax Control of Forest City
"Investors are pressuring the Ratner family to loosen their grip on their nearly 100-year-old property empire, which owns high-profile urban properties such as the New York Times headquarters," reports the Wall Street Journal (Aug. 10, Benoit). Activist investor Scopia Capital Management LP has urged board members of Forest City Realty Trust Inc. to eliminate its dual-class stock structure, which gives the Ratners voting control over the REIT. This was the latest move in a long debate among Forest City executives, investors, and analysts over how to boost the $6 billion company's flagging share price. The stock trades below the value of its underlying commercial real estate. Scopia has a 7.4 percent ownership interest in Forest City. The Ratner family's voting control would block any effort to unseat Forest City's board, but Scopia could call for a nonbinding vote on the structure.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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U.S. Intelligence to Help Companies Avert Supply-Chain Hacking
"U.S. intelligence officials are planning to provide information including classified threat reports to companies about the risks of hacking and other crimes tied to the supplies and services they buy," confirms Bloomberg (Aug. 10, Strohm). The campaign is part of an effort by the National Counterintelligence and Security Center to raise awareness that vulnerable supply chains give China, Russia, and other foreign governments -- not to mention hackers and disgruntled employees -- the opportunity to disrupt operations or steal sensitive data. William Evanina, director of the center, said, "The supply chain threat is one that's the least talked about but is the easiest to manipulate for all aspects of our daily lives." The program will be targeted toward U.S. energy, financial, and telecommunications companies, so government threat reports may soon be offered to companies like Bank of America, Duke Energy Corp., and Verizon.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Valeant Reportedly Under Criminal Investigation
"Federal prosecutors are investigating whether Valeant Pharmaceuticals International Inc. defrauded insurers by shrouding its ties to a mail-order pharmacy that boosted sales of its drugs," Wall Street Journal (Aug. 10, McNish, Matthews are reporting. Lawyers in the U.S. attorney's office in New York City are said to be pursuing an unusual legal theory that Valeant and Philidor Rx Services LLC, a closely linked mail-order-pharmacy, allegedly defrauded insurers by keeping their close relationship secret. The investigation could lead to criminal charges against former Philidor executives and Valeant as a company. "The investigation could conclude as soon as this year," one Journal source stated, "adding that the timetable could also slip."
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Exelon to Invest $25 billion in Infrastructure, Smart Grid Technology in Next Five Years
Exelon Corp. plans to invest $25 billion in infrastructure, smart grid technology, and other improvements at its utilities over the next five years, reports MarketWatch (Aug. 10, Linnane). The company announced the plan in a statement released ahead of an investor day.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Samsung Acquires High-End Stove Maker Dacor
The Los Angeles Times (Aug. 10, Dave, Li) has learned that Samsung Electronics America announced late Wednesday that it agreed to purchase California-based kitchen appliance maker Dacor, which competes on the very high end of the market. Terms of the deal were not disclosed, but the Korea Economic Daily is reporting that the arm of the South Korean conglomerate paid $150 million. A Times source familiar with the transaction said the actual amount was higher. "Dacor's line of ovens and stoves -- a regular sight in expensive homes and, in 2014, the first to be recommended by master chefs at famed cooking school Le Cordon Bleu -- widens Samsung market share in one of the few product categories where it's not the best or second-best seller," notes the newspaper.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Intel Is Paying More Than $400 Million to Buy Deep-Learning Startup Nervana Systems
"Intel is snapping up deep learning startup Nervana Systems," reports ReCode (Aug. 9, Fried), "in a huge bet that artificial intelligence represents the next big shift inside corporate data centers." The chip giant has yet to disclose how much it is paying for the firm, but a ReCode source has valued the deal at around $408 million. According to Intel vice president Jason Waxman, the shift to artificial intelligence could dwarf the move to cloud computing. Machine learning is becoming a must as the world transitions from one in which people control a couple of devices that connect to the Internet to one in which billions of devices are connecting and talking to one another.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Activist Investor Marcato Urges Goodyear to Return $4.5 Billion to Investors
Marcato Capital Management LP is pressuring Goodyear Tire & Rubber Co. to return $4.5 billion to investors over the next three years in a bid to boost the tire giant's flagging share price, reports MarketWatch (Aug. 10, Benoit, Copeland). In a letter to Goodyear's board of directors, the activist investor wrote that it is "impressed" by the company's management and recent performance. However, it lamented Goodyear's shares being down 15 percent year to date, even as rising truck and SUV sales and falling gas prices boosts demand for its products. "We believe if the company targets this magnitude of capital return, it would create significant shareholder value, and we would not be surprised to see the share price increase by as much as 50 percent to 100 percent as a result," Marcato's Richard McGuire wrote in the letter.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Reasons Why Your Company's Board Still Isn't Very Diverse
Fast Company (Aug. 10) columnist Valerie Frederickson presents several reasons why a company's board of directors, despite its best intentions, is still not very diverse. One, most new board members are either CEOs or CFOs, two positions in which women and minorities are still underrepresented. Two, many new board members are retirees. Three, too many new board members come from other board members' networks. Frederickson cites a National Association of Corporate Directors survey, which found that "almost 70 percent of respondents acknowledged that their boards used personal networking or word of mouth to identify the candidate pool from which their newest director was chosen." Finally, low board turnover leads to slower change. Currently, the average board tenure among S&P 500 directors is eight and a half years.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Board Lens
Board Lessons From Uber’s Course Correction in China
Ridesharing company Uber didn’t have much choice but to back out of China—where it was losing about $1 billion per year—or merge with its major competitor, Didi Chuxing, Fortune reports. While neither Didi nor Uber have been able to turn a profit in China—though Didi’s market share has certainly outpaced Uber’s—the combined company will own 95 percent of the Chinese ridesharing market and hopes to become profitable. The Chinese government’s policies have prevented many foreign companies from dominating the marketplace. The road to success has been particularly difficult for Uber and other companies that require data to operate, as the Chinese Communist Party has a tight grip on information flow. Boards should carefully scrutinize major company bets on international markets, such as China, in an environment of increased protectionism and economic volatility. For practical advice on M&A oversight, review the blog “Beating the M&A Odds: Three Big Risks and Key Questions for Directors” and download NACD’s Director Essentials: Strengthening Oversight of M&A. Our recent blog on board oversight in an uncertain world offers important considerations on navigating today’s global economy.
Ridesharing company Uber didn’t have much choice but to back out of China—where it was losing about $1 billion per year—or merge with its major competitor, Didi Chuxing, Fortune reports. While neither Didi nor Uber have been able to turn a profit in China—though Didi’s market share has certainly outpaced Uber’s—the combined company will own 95 percent of the Chinese ridesharing market and hopes to become profitable. The Chinese government’s policies have prevented many foreign companies from dominating the marketplace. The road to success has been particularly difficult for Uber and other companies that require data to operate, as the Chinese Communist Party has a tight grip on information flow. Boards should carefully scrutinize major company bets on international markets, such as China, in an environment of increased protectionism and economic volatility. For practical advice on M&A oversight, review the blog “Beating the M&A Odds: Three Big Risks and Key Questions for Directors” and download NACD’s Director Essentials: Strengthening Oversight of M&A. Our recent blog on board oversight in an uncertain world offers important considerations on navigating today’s global economy.
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IEA Sees Oil Markets Slowly Tightening After Months of Oversupply
"Oil markets will begin to tighten in the second half of 2016 but at a slow pace as global demand growth declines and non-OPEC supplies rebound," reports Reuters (Aug. 11, Zhdannikov) in citing the latest International Energy Agency (IEA) research. The IEA's closely watched monthly report forecasts a healthy draw in global oil stocks over the next several months that should help ease a glut that has persisted since 2014 on the back of rising OPEC and non-OPEC supply. Indeed, oversupply helped send oil prices from $115 a barrel in June 2014 to as low as $27 in January 2016. Crude later rebounded to almost $50, but slipped again towards $40 last month. The Paris-based IEA wrote: "Oil's drop . . . has put the 'glut' back into the headlines, even though our balances show essentially no oversupply during the second half of the year. Moreover, our crude oil balance indicates a hefty draw in the third quarter after a lengthy stretch of uninterrupted builds."
According to the Wall Street Journal (Aug. 11, Kantchev), the resulting product stock draw is expected to increase refiners' appetite for crude oil and help lead to a sustained tightening of the crude oil balance. The IEA early Thursday cut its forecast for growth in global oil demand in 2017 by 100,000 barrels a day (b/d) to 1.2 million barrels, citing a dimmer economic outlook following the United Kingdom's historic vote earlier this summer to exit the European Union. The IEA wrote: "Some momentum will be lost in 2017 due to downgrades in economic growth projections, but the forecast expansion of 1.2 million b/d is still above-trend."
Bloomberg (Aug. 11, Smith) adds that refiners around the globe will process record volumes of crude in the current quarter as their intake recovers after decreasing in the April-through-June period by the most since 2009. "That will shrink brimming crude stockpiles even as Saudi Arabia, Kuwait, and the United Arab Emirates pump at all-time highs amid competition between OPEC nations to secure market share," concludes the agency.
Abstract News © 2016 INFORMATION, INC.
According to the Wall Street Journal (Aug. 11, Kantchev), the resulting product stock draw is expected to increase refiners' appetite for crude oil and help lead to a sustained tightening of the crude oil balance. The IEA early Thursday cut its forecast for growth in global oil demand in 2017 by 100,000 barrels a day (b/d) to 1.2 million barrels, citing a dimmer economic outlook following the United Kingdom's historic vote earlier this summer to exit the European Union. The IEA wrote: "Some momentum will be lost in 2017 due to downgrades in economic growth projections, but the forecast expansion of 1.2 million b/d is still above-trend."
Bloomberg (Aug. 11, Smith) adds that refiners around the globe will process record volumes of crude in the current quarter as their intake recovers after decreasing in the April-through-June period by the most since 2009. "That will shrink brimming crude stockpiles even as Saudi Arabia, Kuwait, and the United Arab Emirates pump at all-time highs amid competition between OPEC nations to secure market share," concludes the agency.
Abstract News © 2016 INFORMATION, INC.
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Cypress Names Hassane El-Khoury as Next CEO
Cypress Semiconductor Corp. has named Hassane El-Khoury as its new president and CEO, as well as a member of its board of directors, reports Yahoo! Finance (Aug. 11). Ray Bingham's current role as the company's chairman of the board has been expanded to executive chairman, providing him with a day-to-day role in support of the chief executive focused externally on clients and investment opportunities. "The goal of our comprehensive internal and external executive search was to identify a CEO who would drive the transformation of Cypress," remarks Bingham, a 30-year veteran of the semiconductor industry who sits on numerous high-tech boards of directors in addition to Cypress. "Among the many interested and qualified candidates we interviewed, El-Khoury emerged as the clear executive leader to deliver on Cypress's enormous potential."
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Under Armour Adds Three New Executives, Including Former Amazon Marketing Vet
Under Armour Inc. has appointed three new executives, MarketWatch (Aug. 11, Garcia) reports. Kip Fulks, who has filled various leadership positions at the company, will serve as chief product officer and oversee marketing and merchandising strategy. Colin Browne joins Under Armour from VF Corp. to serve as president of global sourcing, and Andy Donkin, previously head of Amazon worldwide mass and brand marketing, has joined as chief marketing officer.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Intel's Diversity Stats Flat Despite Ambitious 2020 Goal
Despite efforts in the past six months to improve diversity within its ranks, Intel’s mid-year diversity report released Wednesday shows primarily flat metrics, reports USA Today (Aug. 10, della Cava). The company has committed $300 million to ensure that by 2020 its staff reflects the diverse U.S. workforce. Currently, Intel is comprised of 53 percent white employees and 32 percent Asian, and female staff inched up to 25.4 percent from 24.8 percent in December 2015. Underrepresented minorities, including African Americans and Hispanics, decreased from 12.4 percent to 12.3 percent. The company acknowledges its need to improve retention efforts and hiring practices.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Retiring Lilly CEO Donates $5 Million to United Way for Pre-K
The Indianapolis Star (Aug. 11, Gilmer) has learned that "Eli Lilly and Co. CEO John Lechleiter and his wife, Sarah, are donating $5 million to United Way, to be matched by the Eli Lilly and Co. Foundation." Of the total commitment of $10 million, $8 million will be directed to United Way of Central Indiana. It will be the biggest gift from an individual donor in the organization's 98-year history. "A significant portion of the donation is designated for improving and expanding early childhood education and also for the expansion of the Center for Working Families network in Central Indiana," states the Star.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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Climate Risk Is Poorly Represented in Company Financial Filings
Scientific American (Aug. 11, Hulac) cites a recent ClimateWire study of corporate documents, congressional audits, and independent reports, which shows a disparity in what companies say about climate change and where they say it. "Often companies will put information out in news releases or sustainability reports," notes Warren Lavey, a law professor at the University of Illinois, "and yet that information doesn't find its way into the SEC filings." Because the SEC has done little to extract information about climate change from the companies it oversees, shareholders are not getting a full picture of their holdings. "The SEC is aware of the information gulf," the publication assures. "The commission announced in April that it was considering changing a key rule that governs environmental disclosure, Regulation S-K." Business groups like the U.S. Chamber of Commerce and the National Association of Manufacturers oppose any SEC move to tighten climate disclosure rules.
Abstract News © 2016 INFORMATION, INC.
Abstract News © 2016 INFORMATION, INC.
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