2023 Corporate Governance Year in Review

Corporate Governance 2023 A Year in Review.

A Message from the CEO of BoardProspects BoardProspects.com is pleased to share with you our “Corporate Governance 2023 – A Year in Review.” This unique publication captures the year’s most significant corporate governance news stories and topics as told through the weekly polls of our Members – representing the most prestigious community of board members and c-suite executives in the entire world.

Whether it was the collapse of Silicon Valley Bank, the OpenAI - Sam Altman fiasco, or the (ongoing) saga involving the Board of Trustees at Harvard University and the resignation of President Claudine Gay, there was no shortage of corporate governance news stories in 2023.

On the pages that follow, you will see how these stories were viewed by our Members through their participation each week in the polls on our platform.

Please enjoy this complimentary publication of BoardProspects!

Mark Rogers Founder and CEO BoardProspects.com

BOARDPROSPECTS.COM

January 5, 2023 The L.A. Times published an Op/Ed this week claiming the board of Southwest Airlines is the main party at fault for the airline's holiday meltdown because those individuals presided over the company's evolution from a focus on customer service to one of shareholder value. Who do you believe is to blame?

Southwest's Board of Directors

Southwest's Management Team

Both

Neither 0%

10%

20%

30%

40%

50%

60%

70%

January 12, 2023 The term "Metaverse" is quickly find its way into today's boardrooms. How strong is your understanding of the Metaverse?

Top TopTier Tier– –I am I ama aMetaverse Metaverseexpert expert

Middle of the Road – I know what averse is but could use a bit more tools and use resources the Metaverse is but could a bit more tools and resources

Not Sure – I have heard the term have heard the term Metaverse but not sure what it is Metaverse but not sure what it is 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

January 19, 2023 What is the most significant issue facing corporate boards in 2023?

Economy

Cybersecurity

Geopolitical Risks

Human Capital

Other 0%

10%

20%

30%

40%

50%

January 26, 2023 As Artificial Intelligence (AI) continues to play a more prominent role in business, would you ever serve on a board with an AI director?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

February 2, 2023 To which industry, if any, would you decline a board appointment because of concerns regarding public perception?

Cannabis

Casinos/Gaming

Cryptocurrency

Firearms

Other 0%

10%

20%

30%

40%

50%

60%

February 9, 2023 A New York Times article this week reported there are concerns regarding potential conflicts around Goldman Sachs CEO David Solomon's "side gig" as a DJ. If you served on Goldman's board would you preclude such external activities for Solomon?

Yes

No 0%

20%

40%

60%

80%

100%

© 2024 BOARDPROSPECTS INC.

February 16, 2023 “Board-Hopping" is the act of leaving one board for another because it is more prestigious or has higher compensation.

Would you vote to approve the appointment of a new board member if that individual is board-hopping in order to accept the appointment?

Yes

No

Depends on the individual 0%

10%

20%

30%

40%

50%

February 23, 2023 If your board was the subject of an activist investor campaign, would you rather the activist investor serve on the board or his/her designee?

The activist investor

The activist investor's designee

There is no real difference 0%

10%

20%

30%

40%

50%

© 2024 BOARDPROSPECTS INC.

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March 2, 2023 An Apple shareholder is seeking to have former U.S. VicePresident Al Gore removed from the company's board of directors at the Annual Meeting on March 10th. Do you agree with the shareholder's statement that Gore has a "limited skill set" which makes him unqualified for the board?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

March 9, 2023 A small investor in Nike raised concerns earlier this week regarding the treatment of workers in the company's supply chain. How serious do you believe corporate boards take this issue?

Very seriously

Somewhat seriously

Not seriously at all 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

March 16, 2023

Does the collapse of Silicon Valley Bank (and the ensuing fallout) make it more difficult to recruit talented directors to the boards of banking institutions

Yes

No 0%

10%

20%

30%

40%

50%

60%

March 23, 2023 SVB's Board of Directors only had one director with a background in banking. Should the SEC and/or the exchanges require banks to have a minimum of 3 or more directors with executive experience in banking?

Yes

No

3 is too many 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

March 30, 2023 Carl Icahn told CNBC this past week that one of the main reasons the U.S. economy is breaking is because we are "one of the worst countries in the world as far as corporate governance." Do you believe the state of corporate governance in the U.S. is a riskfactor to the overall economy?

Yes

No 0%

10%

20%

30%

40%

50%

60%

April 6, 2023 Credit Suisse Chairman Axel Lehmann took the unusual step this week of issuing an apology to the bank's shareholders for the institution's collapse. Should board members be more forthcoming in apologizing to shareholders for failures by their company?

Yes

No

Doesn't make a difference 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

April 13, 2023 There has been significant media coverage regarding AnheuserBusch's decision to partner with transgender influencer and activist Dylan Mulvaney for a new marketing campaign. Would you expect such a campaign to be shared with Anhesuer-Busch's board of directors prior to launch?

Yes

No 0%

10%

20%

30%

40%

50%

60%

April 20, 2023 Friction is building between Amazon and its largest shareholders regarding the board's decision to grant large stock awards to the company's top executives without incorporating specific ESG goals in the vesting of such stock. Is it time to transition Say on Pay votes from non-binding to binding?

Yes

No 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

April 27, 2023 MillerKnoll CEO Andi Owen came under fire this past week after a video surfaced of her telling employees to "leave Pity City" after they expressed concerns about potentially not receiving their bonuses this year. If you served on MillerKnoll's board what actions would you want the board to take after hearing Owen's comments?

Termination of Owen's employment

Request Chair to meet with her

Demand she issue an apology

Nothing 0%

10%

20%

30%

40%

50%

60%

May 4, 2023 As a board member and/or executive, how concerned are you about a recession in the next year?

Very concerned

Somewhat concerned

Not concerned at all 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

May 11, 2023

Would you support a regulation requiring a governmentappointed board member on the boards of corporations with significant impact on the general public (i.e. banks, airlines, pharmaceutical companies, etc.)?

Yes

No 0%

20%

40%

60%

80%

May 18, 2023 3M executive Michael Vale was fired this past week for "inappropriate personal conduct". Vale joins a growing list of executives at large corporations who have recently been terminated for inappropriate behavior. Do you believe boards are doing enough to prevent this type of conduct?

Yes

No

It's not their responsibility 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

May 25, 2023 Is the debt ceiling crisis an issue which should be an "emergency" topic of discussion for boards?

Yes

No 0%

10%

20%

30%

40%

50%

60%

June 1, 2023 As "culture wars" (Bud Light, Target, The North Face, etc.) continue to grow, should boards of consumer goods companies have a standing directive that all marketing campaigns be approved in advance by the board?

Yes

No 0%

20%

40%

60%

80%

© 2024 BOARDPROSPECTS INC.

June 8, 2023 It was reported this week that Laurence Chapman, a board member at Digital Realty Trust (NYSE: DLR), has resigned as a result of "poor governance practices". In his resignation letter to the Chair of the Board, Chapman noted that topics such as CEO succession and appointment of a new Chairman were being decided by a subset of board members in discussions outside of the boardroom. Do you believe that on most boards there is a subset of directors who are making governance plans/decisions outside of the boardroom?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

June 15, 2023 Biogen is under fire this week after the biotech giant announced the upcoming departure of one of its directors but failed to disclose that the proposed replacement for that director was his live-in romantic partner and mother of his child. Do you believe Biogen's failure to disclose this information calls into question the company's entire corporate governance approach/operations?

Yes

No 0%

20%

40%

60%

80%

© 2024 BOARDPROSPECTS INC.

LEADING THE DEFENSE OF THE WORLD’S PUBLIC COMPANIES

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June 22, 2023 Should nominating committees still be soliciting board candidate suggestions from their fellow board members?

Yes

No 0%

20%

40%

60%

80%

100%

June 29, 2023 An article in Fortune this week raised the issue of "interlocked" board members creating conflicts of interest and potentially inflated director compensation. Is limiting the number of corporate boards an individual may sit on at one time the best way to address this issue?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

July 6, 2023 The Wall Street Journal this week listed several CEOs of companies outside the S&P 500 who earned more than Apple's Tim Cook in 2022. Do you believe the contempt of the general public in response to these reports is directed more to the CEO or the Board?

CEO

Board of Directors 0%

10%

20%

30%

40%

50%

60%

July 13, 2023

Should a nominating committee consider an individual’s history of political campaign contributions as part of its board candidate assessment?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

July 20, 2023 Tesla's board members are returning $735m in cash and equity to the corporation as part of a shareholder settlement reached earlier this week. Will this settlement have a chilling effect on board recruitment at all public companies?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

July 27, 2023 Last week Southwest Airlines announced the appointment of former U.S. Senator Roy Blunt to its Board of Directors. What do you believe is the primary intended value to Southwest from such an appointment?

Name recognition

Lobbying congress on its behalf

Regulatory insight 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

August 3, 2023 Many corporate governance experts equate corporate boards to U.S. Congress -- an older demographic making decisions which are felt far beyond their walls. Do recent cognitive concerns with older members of Congress (Senators McConnell and Feinstein) heighten the need for term limits and age restrictions for members of corporate boards?

Yes

No 0%

10%

20%

30%

40%

50%

60%

August 10, 2023 It was reported this past week that 3M is grounding its corporate jet operations. 3M's CEO had been authorized to use the company's corporate jets for business and personal travel.

Should boards allow their executives to use the company's corporate jets for personal travel?

Yes

No 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

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August 17, 2023 Compensation Advisory Partners issued a report this past week on board compensation for directors at the 100 largest U.S. public companies. The report found that 75% of these companies now have a shareholder approved limit (median of $800k) for director compensation. Do you believe these limits will eventually begin to have a chilling effect on recruiting top-level board members?

Yes

No 0%

20%

40%

60%

80%

100%

August 24, 2023 In its continued effort to prevent "interlocking directorates", this week the U.S. Department of Justice's Antitrust Division announced that they had forced the resignation of 2 Pinterest board members from the board of Nextdoor. The DOJ referenced the fact that both corporations are "large social networks". Is the US Government overstepping its boundary or do you believe the boards of Nextdoor and Pinterest failed to identify and prevent a real potential conflict of interest?

DOJ overstepped its boundary

Failure by the boards of Nextdoor and Pinterest 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

August 31, 2023 The Wall Street Journal published an article this week which revealed that Under Armour Founder & Executive Chairman Kevin Plank shared nonpublic financial details about the company with a TV anchor. In addition, it is alleged that Plank shared with the anchor an audio recording he took of a contentious conversation he had with the company's then CFO. If you served on Under Armour's board would you demand that Plank step down?

Yes

No 0%

20%

40%

60%

80%

September 7, 2023

You were just asked to join the board of a publicly traded insurance company whose focus is flood and property coverage in Florida. Would you join the board?

Yes

No 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

September 14, 2023 As a board member, does the resignation of BP CEO Bernard Looney over his failure to disclose past relationships with colleagues make you question the transparency of your own CEO?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

September 21, 2023 Is cronyism between board members and the CEO such a problem that corporations should adopt strict rules to limit their interactions to business only engagements?

Yes

No 0%

20%

40%

60%

80%

© 2024 BOARDPROSPECTS INC.

Different perspectives Different perspectives spark new thinking spark new thinking Change the boardroom conversation around Diversity, Equity & Inclusion Change the boardroom conversation around Diversity, Equity & Inclusion

The KPMG Board Leadership Center engages with directors to explore the critical issues driving corporate andLeadership board agendas.

The KPMGDEI Board Center engages with directors to explore the critical issues driving Learn more atand KPMG.com/us/BLC corporate DEI board agendas.

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© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

September 28, 2023 Do you believe that within 3-5 years it will become a standard for corporate boards to have at least one director with AI expertise?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

October 5, 2023 Under investor pressure, Truist announced earlier this week that it was reducing the size of its board from 21 to 13 directors. Should the SEC and/or the exchanges place a cap on the number of directors a board can have?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

© 2024 BOARDPROSPECTS INC.

October 12, 2023 As a way to address the lack of term limits on corporate boards, should the US adopt the UK rule that after 9 years on a board you are no longer considered independent?

Yes

No 0%

10%

20%

30%

40%

50%

60%

October 19, 2023 You were just asked to join the board of a groundbreaking startup with more than $2B in funding. The equity compensation for the position is significant. The other board members are Elizabeth Holmes, Sam Bankman-Fried, Charlie Javice (Frank) and Adam Neumann (WeWork). Do you join?

Yes

No 0%

20%

40%

60%

80%

100%

© 2024 BOARDPROSPECTS INC.

October 26, 2023 Does the ongoing turmoil in the Middle East underscore the need for corporations to have a board member with geopolitical expertise?

Yes

No -- consultants/advisors are sufficient 0%

10%

20%

30%

40%

50%

60%

November 2, 2023 BoardProspects CEO Mark Rogers recently gave a talk on board recruitment in which he was quoted as saying, "AI expertise should be at, or at least near the top, of every Nominating Committee's director wish list." Do you agree?

Yes

No 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.

November 9, 2023 Is a lack of accountability of board members a significant problem in corporate governance?

Yes

No 0%

10%

20%

30%

40%

50%

60%

70%

November 16, 2023 Would you support a rule (by the SEC or the exchanges) which would require that for the prior ten years, new director appointees cannot have served on a board or c-suite with any current director or c-suite member of that company?

Yes

No 0%

20%

40%

60%

80%

© 2024 BOARDPROSPECTS INC.

Time to Update Your Pay Plan?

As your company responds to these uncertain times, your pay plan should too. Take this diagnostic to see whether you should revise your executive and employee pay programs.

What is your company experiencing?

What external factors are you facing?

Shifting company economics

(e.g., growth, downturn, turnaround situation)

Change in strategy

Shifting industry economics or increased volatility Challenges in recruiting talent in “hot” geographies or critical skill sets

New executive leadership or governance

Pressure from external stakeholders

Change in shareholders or structure

Reacting to changes in accounting, tax, and legal

How is pay perceived?

Are you seeing unintended behaviors?

Out-of-step or inflexible in today's environment

Pay plans or measures are creating unintended

(e.g., combination or divestiture)

regulations

behaviors / results

Misaligned with the goals, time horizon or risk to the firm

Unfair or inequitable

fair and equitable pay levels

Individual “one-off” compensation negotiations occur

Below competitive or, conversely, a windfall to recipients

Either too high or low relative to performance, contribution, or effort

Discretionary payments are needed to produce more

Too complex or not valued by executives or employees

frequently

Turnover is higher than normal or unexpected Pay conversations take a significant amount of time to discuss and resolve

We are ready to help you – from compensation audit to full plan redesign.

Call one of our four offices or email us at info@capartners.com.

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November 23, 2023 What do you believe was at the center of the OpenAI - Sam Altman fiasco?

A bad corporate structure

Concern for A.I. safety over growth/profit

An inadequate board

All of the above 0%

20%

40%

60%

80%

November 30, 2023 Are Disney's shareholders well served by this week's board appointments of Morgan Stanley Chairman/CEO James Morgan and former Sky President Sir James Darroch -- or are these appointments simply a tactic meant to derail Nelson Peltz's activist campaign against the company?

Beneficial board appointments

Activist defense tactic

Both 0%

5%

10%

15%

20%

25%

30%

35%

© 2024 BOARDPROSPECTS INC.

December 7, 2023 Activist investor Bill Ackman has stated on X that the governance of Harvard, Penn and M.I.T. can be judged by how quickly their boards fire their respective presidents as a result of the congressional testimony they provided this week on antisemitism on campus. Do you believe this is the type of issue which college trustees should involve themselves?

Yes

No 0%

20%

40%

60%

80%

100%

December 14, 2023

Given the corporate governance disaster at OpenAI, would you join a board which has a two-tiered governance structure where a nonprofit business oversees a for-profit business?

Yes

No

Depends on the company 0%

10%

20%

30%

40%

50%

© 2024 BOARDPROSPECTS INC.

December 21, 2023 Dan Kaplan, a Senior Partner in Korn Ferry's CHRO Practice, published an article in Fortune last week in which he warned that board members are suffering from overwork and "it's a recipe for disaster". What do you believe is the best way to address this issue?

Limit the number of boards an individual can serve on

Increase the number of directors on a board

Other 0%

10%

20%

30%

40%

50%

60%

70%

December 28, 2023

What was the biggest corporate governance related news story of 2023?

The collapse of Silicon Valley Bank

Conviction of Sam Bankman-Fried

Termination/Rehire of OpenAI's Sam Altman

Other (identify in comments) 0%

10%

20%

30%

40%

50%

60%

© 2024 BOARDPROSPECTS INC.