Celebrities in the Boardroom
Does it lead to good corporate governance?
When the board of directors of WW (formerly known as Weight Watchers) held its annual shareholder’s meeting in New York City on Tuesday, the company’s most famous board member, Oprah Winfrey, was conspicuous by her absence because of an unspecified “scheduling conflict.”
Investors in the New York-based company, whose shares have slumped more than 40% this year, are eager to hear from Winfrey given the company’s plans to rely more heavily on the billionaire media mogul/ex-TV show host for marketing after its “slow start” this year. The 65-year-old Winfrey is feeling the pinch too since she also is the company’s largest individual shareholder.
Winfrey is the latest in a long line of so-called celebrity directors, board members who companies appoint in the hopes of making a splash.
Celebrity directors are definitely not a new phenomenon. Cary Grant served on the board of Fabergé; Joan Crawford did a stint on Pepsi-Cola’s board; and Grace Kelly graced the boardroom of Twentieth Century-Fox Film.
An early sports celebrity to become a corporate director was tennis icon Billie Jean King, who was named to the board of Philip Morris Companies in 1999. She and Philip Morris were involved with the formation of the Virginia Slims Tennis Tour in 1970, which the company noted was “the birth of women’s professional tennis.” Philip Morris called her “one of the most celebrated tennis players in history” upon her election to its board.
But do celebrities in the boardroom help or hinder good corporate governance?
"I have seen it backfire,” says Nancy May, the CEO of BoardBench, a consulting firm, though she would not name a specific company. “In one case I know of a board who brought on someone who was well-known in a particular industry. They didn’t really understand the amount of work that it took. They wound up being a weak point for a particular board as opposed to an asset."
WW, which has struggled in recent years with the growth of free or low-cost apps, formed a partnership with the billionaire Winfrey who joined the board in 2015. She has been seen as an effective spokesperson for the brand because she has battled weight problems for years.
In other big-name appointments in recent years, travel site Expedia got some grief when it expanded the size of its board in 2017 to accommodate Chelsea Clinton. At the time, The New York Post criticized the online travel company for providing the former first daughter with a cushy job with compensation of $295,000. She also is on the board of internet holding company IAC. Both Expedia and IAC are controlled by billionaire Barry Diller, a supporter of Clinton’s parents former President Bill Clinton and former Secretary of State Hillary Clinton.
Other celebrity board members include NFL hall-of-famer Lynn Swann, historian/journalist Walter Isaacson, tennis superstar Serena Williams and NBA legend Shaquille O’Neal.
Swann is currently the athletic director of the University of Southern California. He joined the board of engineering construction company Fluor in 2013 and is a member of the audit and governance committees. Fluor recently replaced its CEO after reporting disappointing results. Swann also recently joined the board of Evoqia Water Technologies.
Isaacson, a former CEO of CNN who has authored biographies of Steve Jobs, Benjamin Franklin and Leonardo Davinci, joined the board of United Continental in 2006. He is a member of the executive and nominating and corporate governance committees and chairs the airline’s public responsibility committee.
Both Wiliams and O’Neal are new to the world of corporate boards though not to the industries where their companies operate.
Williams, considered to be one of the greatest tennis players in history, joined the board of Poshmark, a social commerce site where customers sell used apparel and accessories earlier this year. She has had her own fashion line for years and hawks her wares on the Poshmark site. Poshmark’s initial public offering expected in the fall.
O’Neill, an NBA hall-of-famer, joined Papa John’s board in March and serves on the marketing committee. He is going to be the new face of the embattled Louisville, Ky.-based company and may get his own signature pizza. O’Neal has invested in Papa John’s restaurants since 2010, including nine Atlanta-area franchises.
Having “non-experts” on corporate boards isn’t necessarily a bad thing, according to Matt Fullbrook, managing director of the University of Toronto's Clarkson Centre for Board Effectiveness.
"They are more likely to put up their hands and say `I have no idea what’s going on. Can you explain it to me?" he says.