The Informed Board

The federal government has made sizeable investments in several private companies and is steering inbound foreign investment — the most significant U.S. government involvement in the private sector outside of wartime economies. Mick Mulvaney, first-term Trump White House chief of staff and former director of the Office of Management and Budget, joins Skadden M&A partner Ann Beth Stebbins to explain what this means for corporate boards.Although some companies are actively seeking government capital, Mulvaney point to potential dangers as he views the government as “dramatically less disciplined than the private sector.” He predicts the trend of government as a source of private capital will continue regardless of which party controls the White House, representing a fundamental shift in how both Republicans and Democrats view the government’s role in the economy.Mulvaney warns companies to think carefully before taking government money. Do businesses truly understand what it means to have Uncle Sam as a co-owner on their board? What happens when administrations change and policies shift, he asks? Ann Beth points out that none of the deals to date include redemption features, so companies cannot easily buy back government stakes. Even if there were a redemption feature, Mulvaney adds, it could be difficult to exercise that if the government does not want to be bought out. “How would you feel about it — when you have to have a relationship with the government in your business — how would you like to [be] at that point?” he asks.Having policies to promote national and economic security makes sense, Mulvaney says, but there are “other things the government can do that do not involve the actual ownership of the means of production.”Mulvaney supports the Trump administration’s negotiating with countries such as Japan and South Korea to direct investment into the U.S. in exchange for access to the U.S. market. He says that we have only seen the first moves on all these fronts. “They’re going to continue to pursue government ownership of private companies and at the same time are also going to continue to try to encourage more direct foreign investment and then look for places for Americans to invest overseas…. [W]hat you’re seeing now, you’re going to get for the last three years and three months of this administration…. because they are absolutely committed.💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedInFeatured GuestName: Mick Mulvaney Title: Senior Advisor, McLarty AssociatesConnect: LinkedInConnect with Skadden☑️ Follow us on X & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

Kevin Kajiwara, co-president of Political Risk Advisory at Teneo, and Michael Leiter, partner at Skadden’s National Security Practice, delve into the seismic shifts in global economics impacting corporate boards. They discuss the imperative for boards to adapt to the geopolitical landscape, emphasizing that political risks now directly affect business performance. From navigating cross-border reactions to enhancing board composition with international experts, Kajiwara and Leiter highlight essential strategies for boards to ensure long-term viability in a rapidly changing environment.

Delaware is home to more than two-thirds of the Fortune 500, and 1.8 million business entities. “The Delaware General Corporation Law is widely considered to be the most thoughtfully developed corporate law in the country,” explains Hon. Lori W. Will, vice chancellor of the Delaware Court of Chancery. In addition, sophisticated judges, responsive executive and legislative branches and extensive supporting infrastructure have solidified Delaware’s reputation as flexible and business-friendly.Still, a handful of high-profile companies have recently announced plans to reincorporate outside of the state. “I think states like Texas and Nevada are sensing potential market opportunity and are seizing on a moment in time when Delaware is being challenged,” observes Skadden litigation partner Edward Micheletti of the firm’s Delaware office. Recent amendments to the Delaware corporate code show how responsive the state’s governor, legislature and bar are to the need to update corporate law regularly to stay abreast of changes in the business world, Ed stresses.Vice Chancellor Will and Ed join host Skadden M&A partner Ann Beth Stebbins to explore the factors that make Delaware the preferred jurisdiction for incorporation. They discuss the importance of corporate incorporations to the state, and the ecosystem that has evolved over time to support corporations. They compare Delaware’s flexible approach to the more rigid, code-based systems of competing states, and provide insight into how corporations should evaluate a potential reincorporation decision.💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡 Featured Guests💡 Name: Hon. Lori W. WillTitle: Vice Chancellor of the Delaware Court of ChanceryConnect: State of Delaware on LinkedIn | Facebook | X | YouTube | Instagram Name: Ed MichelettiTitle: Litigation Partner, SkaddenConnect: LinkedInConnect with Skadden☑️ Follow us on X & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

How do you know if your company is likely to be a target for activists? And what is the best way to respond when approached by an activist? Skadden M&A partner Ann Beth Stebbins discusses the activist’s playbook with Ted White of Legion Partners Asset Management, a veteran activist investor, and Elizabeth Gonzalez-Sussman, head of the firm’s Shareholder Engagement and Activism Practice. Activists seek to identify companies where value can be increased. Some activists will focus on operational or governance improvements, while others will press for transactions that could release value, Ted and Elizabeth explain. Ted and Elizabeth observe that shareholders are not always forthcoming with management, which may make it difficult of a board to understand shareholder concerns. Ted notes that, as an investor, he has observed cultural misalignment in some companies experiencing underperformance, and stresses that it may be important for board members to hear directly from shareholders. Elizabeth says that, when meeting with activist investors, management and directors should listen to the issues that are raised. Ted says his firm will be trying to gauge if management and the board are aware of the concerns expressed in a meeting, and are willing to address, or at least consider, those. He also notes that directors should assume that the activist has talked to other shareholders about the company and the potential issues that the activist has identified. Companies should be careful about responding defensively to activists, Ted and Elizabeth say. If the company reacts hostilely or dismissively, that may cause other shareholders to perceive that there is a problem. It could also prompt a more aggressive campaign by the activist to replace directors in the future, and cause proxy advisory firms to be more critical of the company. If activists succeed in electing new directors, the existing board should attempt to work with them collaboratively, Elizabeth and Ted say, even though the contentious nature of a proxy fight may make cooperation challenging. Ted notes that board dissonance may encourage shareholders to seek to replace more directors at the next annual meeting. 💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡Featured Guests💡Name: Elizabeth Gonzalez-SussmanTitle: Partner; Head of Skadden’s Shareholder Engagement and Activism PracticeConnect: LinkedInName: Ted White  Title:  Co-founder and a Managing Director of Legion Partners Asset ManagementConnect: LinkedInConnect with Skadden☑️ Follow us on X & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

Investors often believe that companies are too slow to refresh their boards.  Directors and CEOs may also think that their companies do not have the right mix of directors, as strategies change and some directors’ skills become dated. Yet annual board turnover remains low and fairly steady, Spencer Stuart partner Laurel McCarthy tells podcast host, Skadden M&A partner Ann Beth Stebbins. Together with Skadden partner, Elizabeth Gonzalez-Sussman, Laurel and Ann Beth discuss the ways boards should approach refreshment, and the risk that they could be targeted by activist investors if they do not replace directors regularly. Many board policies do not encourage refreshment. The typical mandatory retirement age for S&P 500 directors, has been increasing, and is now at age 75. “We usually don’t see many stats that surprise us in our annual board index, but this one did,” Laurel says. At the same time, the number of boards with mandatory retirement ages has been dropping. Meanwhile, board term limits, when present in a company’s bylaws, are usually generous — 15 or 20 years. Proxy advisory services do not have prescriptive policies on term limits, but they question the independence of directors who have served for more than nine years on a board. As Laurel and Elizabeth explain, age and term limits can encourage turnover, but they should not be the sole mechanism. Boards need to continually analyze the skills required by the board in light of a company’s changing strategies, and develop pipelines of potential new directors to fill those needs.Elizabeth points out that companies that have a number of long-tenured directors may be vulnerable to activist investor campaigns if the company underperforms. Demands that a company appoint new directors to improve performance often figure prominently in activist campaigns.Some investors may favor adding younger board members, particularly where the customer base is young or if technology is central to the business, Elizabeth says. In evaluating potential board members, Laurel and Elizabeth suggest prioritizing candidates who have recent experience, are good cultural fits and ask tough questions that management should be prepared to answer. Ultimately, they advise boards to be proactive, as succession planning and maintaining a pipeline of potential directors is critical to a company’s future performance.  💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡Featured Guests💡Name: Laurel McCarthyTitle: Consultant, Board and CEO Practice, Spencer StuartConnect: LinkedInName: Elizabeth Gonzalez-Sussman Title: Partner, Shareholder Engagement and Activism, SkaddenConnect: LinkedInConnect with Skadden☑️ Follow us on X & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

What do investors think makes a board effective? Skadden M&A partner Ann Beth Stebbins kicks off the discussion with that question with her guests, Allie Rutherford and Adrienne Monley of PTJ Camberview, which advises companies on shareholder relations. It's a board that evolves with the trends, says Allie. It's a board that discloses its composition in a way that conveys how the skill sets and the experiences of particular directors and directors in combination meet the business and strategy needs of the particular company.Companies need to show investors that they have right directors and that those people are doing the right things as a team, following practices and engaging together in a way that supports value creation, says Adrienne. It is incumbent upon companies to be specific and help investors understand, perhaps through anecdotes, the human perspective about what's happening in the boardroom — how they run meetings and bring in outside voices, for example. Being generous with those descriptions, both in written disclosures and in engagement with investors, will help promote where investor support and understanding.In terms of directors' skill sets, not everybody has to have every skill. It's how all of those come together, says Allie. And boards can supplement that by bringing in outside expertise.Investors also want a board to be doing things that improve the efficacy and the functioning of the board as a team, says Adrienne. As a result, today more board self-assessments include things like independent interviews.Because few investors have first-hand boardroom experience, it can be helpful to have direct discussions with your top investors about the board's functioning, says Adrienne. 💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡Featured Guests💡Name: Allie Rutherford   Title: Partner, PJT Camberview    Connect: LinkedIn  Name: Adrienne Monley     Title: Managing Director, PJT Camberview    Connect: LinkedIn  Connect with Skadden☑️ Follow us on X & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

In this episode of the Informed Board podcast, our host, Skadden M&A partner Ann Beth Stebbins is joined by guest, Rebecca Corbin from Corbin Advisors, to explore the critical role that board directors play in shareholder engagement. Corbin stresses that a proactive approach toward shareholder engagement can enhance a company’s value.  In their conversation, Ann Beth and Rebecca discuss how a board can best stay attuned to investor sentiment, the practical actions a company can take to raise the profile of its directors, and the role of the board in spreading the culture and message of the company. Looking at topics that investors are focused on, the episode explains that corporate culture, if communicated effectively, can give a company a competitive edge with investors. Future-readiness is another key theme, highlighting the necessity for boards to have diversified skill sets that align with the company's strategic objectives.This episode serves as an insightful guide to the world of proactive shareholder engagement, emphasizing the role directors can play as value-enhancing ambassadors of a company. 💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡Featured Guest💡Name: Rebecca CorbinTitle: Founder & CEO at Corbin AdvisorsConnect: LinkedInConnect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

“There’s certainly an argument to be made, that the moment you name a new CEO, then you ought to be starting to think about who the next person is,” says Blair Jones. In this episode of the Informed Board podcast, our host, Skadden M&A partner Ann Beth Stebbins, is joined by guests, Blair Jones, a managing director at Semler Brossy Consulting Group LLC, and Erica Schohn, partner and head of the Executive Compensation and Benefits Practice at Skadden, to explore best practices in CEO succession planning. They highlight the importance of preparedness, noting that a well-conceived succession program should serve as a contingency plan for unforeseen events, as well as for orderly retirement of a CEO.The trio emphasize that succession planning should be an annual event, allowing for adjustments as business strategy evolves. They also discuss the necessity of having multiple candidates and keeping them incentivized, including those not selected for the CEO position. A key issue is the current CEO’s role in succession planning. Typically, the CEO will be involved, but ultimately it falls to the board to make the final decision.The guests also highlight emerging trends in succession planning, including the use of external assessments, the role of executive chairs and the development of next-level candidates. They conclude that, while companies lean toward internal candidates during planned successions, external candidates are more likely to be considered in the case of unexpected transitions or  shifts in business strategy.💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡 Featured Guests 💡Name: Erica SchohnTitle: Partner at SkaddenConnect: LinkedInName: Blair JonesTitle: Managing Director at Semler Brossy Consulting Group, LLCConnect: LinkedInConnect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

Skadden partners Ann Beth Stebbins, David Schwartz and Lara Flath discuss the implications for US companies of the Supreme Court’s decision in June striking down race-based affirmative action programs in higher education. David Schwartz is global head of Skadden’s labor and employment group, and Lara Flath is a Skadden litigation partner who represented the University of North Carolina (UNC) in the litigation relating to its consideration of race in the admissions process. 💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡 Featured Guests 💡Name: David E. Schwartz Title:  Partner at SkaddenConnect: LinkedInName: Lara A. Flath  Title:  Partner at SkaddenConnect: LinkedIn  Connect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

Companies now face an additional regulatory hurdle when making acquisitions in the European Union. In addition to merger control and foreign direct investment (FDI) filings, they will be subject to the EU’s new Foreign Subsidies Regulation (FSR), Skadden partner Giorgio Motta explains. The law, which took effect in July, allows the European Commission to look into acquisitions of, and investments in, businesses in Europe by non-EU companies that have received some sort of financial support from a non-EU government. Read the full summary of the conversation HERE.💡 Meet Your Host 💡Name: Ann Beth StebbinsTitle: Partner at SkaddenConnect: LinkedIn💡 Featured Guest💡Name: Giorgio MottaTitle:  Partner at SkaddenConnect: LinkedInConnect with Skadden☑️ Follow us on Twitter & LinkedIn.☑️ Subscribe to The Informed Board on Apple Podcasts, Spotify, Google Podcasts, or your favorite podcast app.☑️ Let us know what topics you would like to hear about on The Informed Board by reaching out to us at info@skadden.com.The Informed Board is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.