San Francisco Chronicle - (Sunday)
Makeup of boards causing a furor
On Tuesday, Nasdaq announced it will require more women and people from diverse backgrounds to serve on the boards of companies whose stocks are traded on its exchange.
California passed a law this year mandating similar requirements, on top of already requiring women to be included on boards of public companies headquartered here.
But changing the makeup of boards may not be so simple, since some executives willing and qualified to serve may not be allowed to by their employers. Many companies have rules about which employees can serve on outside boards, designed to prevent conflicts of
interest, but also limiting the pool of directors.
Former Salesforce executive Niki Christoff said Friday on Twitter that she was fired from the company in May for accepting a seat on the board of another company.
Christoff served as senior vice president of strategy and government relations at Salesforce until this year, according to her LinkedIn profile. She currently serves on the board of directors and governance committee of MedMen, a cannabis retailer.
Christoff ’s work for Salesforce included advocacy for the company on Capitol Hill. MedMen did not immediately respond to an emailed request for comment.
Christoff said CEO Marc Benioff allows only people who report directly to him to serve on outside boards, a policy she said she told Benioff in a text message “had an obvious discriminatory impact on women.”
She said Benioff replied to a text saying he was disappointed, adding a heart emoji, when she informed him she intended to serve on the board anyway.
“Inflexible systems have a disproportionate cost for women and underrepresented racial minorities. Tech needs to evolve to meet this moment,” Christoff said.
A Salesforce spokesperson did not respond to a request for comment on Christoff ’s version of events. Christoff did not agree to answer further questions about her departure on the record.
Out of 11 members of Salesforce’s board, eight are men. Of the 12 people listed as its executive team on Salesforce’s website, nine are men. Some of Benioff ’s direct reports are not listed on the site.
The company’s code of conduct says that any profitrelated activities, including taking board seats, must be approved by a manager and the company’s general counsel.
“Only very limited forprofit activity is allowed” outside of job duties and employees are expected to devote their “full professional energies” to work at the company, according to the policy, which was updated in March.
“Taking the seat knowing that it violated policy was a risky move,” said Don Heider, executive director of the Markkula Center for Applied Ethics at Santa Clara University, of Christoff ’s decision.
Heider also said it was high time businesses revisited rules around board service.
“Given the change in board requirements, I think it’s probably time to revisit that policy” if companies want to work toward racial and gender equality, he said. Rules around who can serve on outside boards are designed to prevent conflicts of interest, Heider said, an issue also mentioned in Salesforce’s code of conduct.
Christoff ’s particular role at the company highlighted why companies may need such rules.
Heider agreed that sitting on a cannabis company board while the substance remains federally outlawed could jeopardize Salesforce’s lobbying efforts.
Christoff noted Nasdaq’s move to seek diversity on boards of companies whose shares trade on the exchange and suggested the exchange also require companies to “allow their own qualified executives to serve on corporate boards,” she wrote in a tweet earlier this week.
“Ran into this glass ceiling myself,” she wrote.