In a bold and unprecedented move, Michael Bloomberg, the founder and majority owner of Bloomberg, a global financial data and media giant, has fired the entire board of directors. This surprising decision was announced in a memo to staff, where Bloomberg also revealed the appointment of a new CEO and president at the company. This shake-up in leadership comes as Bloomberg positions itself for the future and prepares for the eventual transition of the company to a philanthropic trust.
New Leadership at Bloomberg
Vlad Kliatchko, Bloomberg’s chief product officer, and Jean-Paul Zammitt, the company’s chief commercial officer, have been promoted to the roles of CEO and president, respectively. It is important to note that these appointments do not involve replacing any existing executives, as Bloomberg did not have a sitting CEO or president. In the memo, Bloomberg emphasized his continued involvement in the company, stating, “I’m not going anywhere.”
Mark Carney to Lead the New Board of Directors
Heading the new board of directors is Mark Carney, the former governor of the Bank of England. While no other incoming members were mentioned in the memo, Carney’s appointment brings a wealth of experience and expertise to the board. The move signifies Bloomberg’s intention to build a high-profile board that will shape the company’s future and enhance its reputation in the finance industry.
Unprecedented Board Refreshment
Corporate governance experts are calling Bloomberg’s decision to ax the entire board nearly unprecedented. While there have been instances of CEOs or founders of small private companies making dramatic changes to rebuild a board, such a complete refreshment is highly unusual, especially for a company of Bloomberg’s size and stature. With revenues of $12 billion a year, Bloomberg is a titan in the finance industry, and this move signals a commitment to embracing change and preparing for the future.
The Risks and Rewards of Board Refreshment
Heidi Roizen, a partner at the venture capital firm Threshold Ventures, describes Bloomberg’s extreme board refreshment as a “bold maneuver” that carries both risks and rewards. Onboarding multiple directors simultaneously can be challenging, as boards have their own cultures and institutional knowledge. However, Roizen acknowledges that forming a high-powered board can be a smart move, particularly when the founder plans to eventually exit the company and turn it over to a philanthropic trust. A prestigious board can positively influence the company’s image and attract potential business partners.
Embracing Modern Board Practices
Aside from succession planning, Bloomberg’s decision to refresh the board all at once presents an opportunity to align with current private board practices. The trend towards shorter tenures and a diverse range of expertise is gaining traction in corporate governance. Bloomberg’s directors, many of whom had tenures of 20 years or more, will now make way for fresh perspectives and skill sets. This change allows the company to keep pace with emerging trends, including IT and cybersecurity, talent management and human resources, M&A, and sustainability.
The Power of Starting Fresh
Letting go of an entire board provides a company with a clean slate and a chance to reset its governance framework. Ted Bililies, a partner and managing director at AlixPartners, emphasizes the importance of establishing explicit rules and clearly defining the role of board members in this new context. By doing so, the founder gains significant power and the company can operate with a fresh perspective. However, it is crucial to ensure that the new governance procedures are well-documented and transparent to avoid any ambiguity or misunderstandings.
Looking Ahead
Bloomberg’s decision to shake up the board of directors and announce new leadership positions reflects the founder’s commitment to the future of the company. This move, although unprecedented, demonstrates Bloomberg’s willingness to embrace change and prepare for a smooth transition to a philanthropic trust. By assembling a high-profile board and adopting modern board practices, Bloomberg aims to position itself as a leader in the finance industry and continue to thrive in an ever-evolving business landscape.
“You can’t make a decision based on a series of newspaper stories, but a series of newspaper stories puts you on notice that something may be wrong.”
- Charles Elson, director at the University of Delaware’s John L. Weinberg Center for Corporate Governance
On the Agenda
Quiet Cutting: The New Corporate Trend
After the “great resignation” and “quiet quitting,” companies are now adopting a new trend called “quiet cutting.” The Wall Street Journal reports that companies are finding indirect strategies for reducing labor costs without attracting too much attention. This trend highlights the need for companies to adapt and evolve in response to changing economic conditions.
A Day in the Life of Lyft’s New CEO
David Risher, the newly appointed CEO of Lyft, recently shared an outline of his typical day as part of a TikTok series for Fortune. The video offers a glimpse into the busy yet human side of a CEO’s life, including the importance of maintaining a healthy work-life balance.
Health and CEO Succession
A recent study conducted by European researchers found that healthier individuals are more likely to be named CEOs. The study also revealed that the role of CEO does not significantly impact their health, although poor health in a CEO is associated with increased turnover. This research sheds light on the correlation between health and leadership positions.
