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Mega Cap Tech Board of Directors Failing Corporate Governance

What are Mega Cap Stocks?

Mega Cap Tech Board of Directors Failing Corporate Governance


Podcast Link

https://youtu.be/X0EnJy8HyZ0

Mega cap stocks are the largest companies globally, with more than 200 million U.S. dollars market capitalisation.

They’re not that many companies on the planet with that enormous mega cap stock valuations. 

Company NameMarket CapCountry
Saudi Arabian Oil Company – Aramco $7.346 TrillionSaudi
Apple (DOW 30 Component)$2.872 TrillionUSA
Microsoft (DOW 30 Component)$2.39 TrillionUSA

They’re not that many companies on the planet with that enormous mega-cap stock valuations.

The highest Public Stock Company on the planet is Saudi Aramco, about $7.346 Trillion.

That’s “T”, as in Trillion dollars with 12 zeros in it. Then apple. Then Microsoft, as shown in the chart above. 

Apple, Amazon, Microsoft, CRM, BABA, INTC, Google, META, NVIDIA, TESLA, CISCO, QCOM, SAP, AMD benchmarked with best practices.

You know, the tech giants, the Apple, the Amazons, and so forth; unfortunately, their board of directors is not learning much in COVID.

Tech Mega Cap Giants Apple, Amazon, Microsoft, CRM, BABA, INTC, Google, META, NVIDIA, TESLA, CISCO, QCOM, SAP, AMD benchmarked with best practices.

This is research, you know, once a year I do research significant research, and this is looking at Apple, Amazon, Meta Platforms which is Facebook, SAP, Salesforce, Qualcomm, and Alibaba so this is an international study across the planet for the tech giants, and then we benchmark them out of the industry with JP Morgan & Chase, Wallgreens Boots Alliance and Bank of Montreal’s best practices.

Unfortunately, if you look at it, the results here this is getting to the core of it there if you look at Amazon, Tesla, Alibaba, Cisco, Salesforce, Intel, Qualcomm, SAP, and AMD, the major tech giants, they have nothing provided in the Proxy statements (2021, 2022) about the Board of Directors learning anything during COVID. 

It is alarming, and this is concerning, and this makes you think about things, and I’m going to talk about this in the presentation. I want to speak also about if you look at Apple and Microsoft, which are DOW 30 components also they just provided basic rudimentary information on their Proxy statement in 2021 2022 regarding what their boards have been learning now in the industry Nvidia and Blackberry have shared much more information as compared to their industry peers versus across the gamut now.

It is challenging for many reasons now, so I want to discuss how we will benchmark them with outside industries to get an objective perspective. What’s Going on now? Why does this matter? 

This matters to institutional investors. 

They could rebalance their portfolios based on engaged board members. They can also vote against proxy chairman and CEOs on companies. You know, engaged versus non-engaged, a shareholder activist might be calling because we want to talk about engaged boards and learning everything. I want to talk about others in the proxies.

Here is what I saw in the Google Alphabet, Metaverse, which is Facebook and Microsoft some of the points incoming ahead and then a bit of my company GBAC – Global Board Advisors Corp and boardroomeducation.com.

We are an online Board of Directors education firm providing corporate governance best practices on the planet, so moving ahead if you look at it here, JP Morgan their board of directors this is from their proxy statement of 2021 you know they have an excellent little section talking about deep dives of topics they’re covering their boards are getting an education on it outside experts coming to the boardroom talking about them.

The boardroom taking outside visits from the company from the boardroom and meeting uh you know the first-line staff and meeting people to learn about topics emerging and significant risks that are coming emerging these are best practices and ESG issues, of course, so these are some of the training JP Morgan board of directors learn during COVID, and this is best practices because from the tech sector, what we just saw a minute ago they’ve hardly done anything you know, does that mean they didn’t do anything.

We Reached Them For Comments and provided additional information. 

We reached out to them, GBAC reached out to them to the companies, and we didn’t hear back from them to me to misinterpret invitations here looking Walgreens another DOW 30 component you know they’re talking about encouraging the Board of Directors to seek information education from outside visit employees first-line staff to learn about the operations and facilities which are the great best practice you know and go to academic institutions to learn new things happening like us (online boardroomeducation.com)

You know watching or US NACD or other places to go in the industry and learn some update your skills because engaged board members make better decisions again bank of Montreal another prime example looking at it, they’re encouraging for two terrible members to seek outside you know, education and they will reimburse on company accounts again another practice that is very done now coming back to that.

you know why it is important for a board member to be learning you know better-engaged board members make better decisions you know involvement from institutional investors now black BlackRock, Vanguard, and State Street Global Advisors are very interested. They are actively seeking directors and voting against directors on ESG factors. 

If you hear that the boards have not done any training, I think there will be levels of involvement out of this research. You know, would BlackRock engage them to involve them? Would they vote against these board members in these companies? You know these are questions to be answered. 

Shareholders will be very interested in learning and scare and spook those board members who have not learned anything during covet. The likelihood of these activists and enormous power forces institutional investors to get involved in your company increases by board members who are not learning new skills.

You know what else again? As I said, better decisions are made by informed better-educated board members, you know.

Benchmarking 

You can benchmark for outside in stakeholders the global capitalism the analyst communities the shareholder’s everybody gets to benchmark if your board members are learning it gets easier you know and again higher returns for better decisions made suitable for the stock returns, you know the taxes the tech sector has had phenomenal returns. 

But will it continue if the board members are not learning anything? 

In the healthcare sector in medical, you know, if the doctors are not getting licensed every five to five years ten years, they cannot set. The lawyers cannot practice doctors and lawyers if they don’t pass their bar exams and depart the active licenses they cannot practice. What about board members? You know they’ve been sitting long. They’re not learning new skills do are they doing service to the shareholders.

Microsoft, Meta Platforms Facebook, Google Alphabet Proxy Statement Miss Information To Shareholders and Vested Stakeholders 

These are questions to ask, and then here, looking at the alphabet proxy, it talks about that if you look at it very closely between reading between the lines.

The devil is in the details, and details are in the little endnotes. They talk about that the option to seek education doesn’t mean that they took any education questions for Alphabet shareholders to ask the board members what your board members learned this year.

Now looking at metaverse Facebook, here is an example interesting. They talk about how they get expertise from outside in the boardroom, but what about their board going outside and learning from other places. You know, bringing new ideas from outside other industries any visits or stuff like that you know, so these are the kind of things you learn.

Looking at Microsoft, here’s a very interesting point to focus on now you’re looking at their director, their section on board of directors the education you’re also looking at their audit fees charged by the external auditor Deloitte and here in “All Other Fees,” they talk about that all of the fees include training. Still, then they talk about if you look at the pattern that reduced the outside fees between 2020 and 2021 the fiscal year so does that mean the board cancelled the subscriptions to learning material they were getting from Deloitte in training, and if so, did they do any learning or training Microsoft you know there’s a trillion of dollars worth of Market Caps of companies and some boards, not updating skills, boards not updating their skills is a significant concern and alarm.

So you know I reached out to all these companies. We reached out to Investor Relations, we Asked the Board members directly to emails, ask you know emails wherever we could email and reach them, and we didn’t hear back anything from anybody. We gave them a heads up that this research is coming out is. Is there something you want us to add about hours or board service that you added or learned about your board chair members? We didn’t hear back, and that’s scary because it validates the points, unfortunately. Misinterpretations open a can of worms that it shouldn’t have opened.

Somehow Tech industry competitors Nvidia and Blackberry encouraged their board members. Blackberry and Nvidia say in their proxy that every 24 months, they like to have their board members take outside training, which is encouraged to them better than their peers; you know it’s not Best Practice but better than the industry peers. I would think (annually)12 months, every 12 months the board should be updating their skills on an everyday basis, you know, and so many things are changing Business Models are changing so much disruption is occurring because of COVID you need to be talking about updating skills daily you know so a bit of my company we are the thought leaders, we bring board thought leadership across the planet.

We engage boards across every market capital market and emerging market. We bring the Best Practices from the planet to your service and online courses and physical whether it be, but during covid, we have transitioned to learning online; hopefully, that gives you a bit of my company and makes you think about more questions to be answered than Needed all right and reached me for more questions thanks a lot and see you next time.

All the best!

Yusuf!

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