Disney: Iger Board Nominees – Old Wine In New Bottles (NYSE:DIS)

The Disney company is in need of a new vision moving forward, as the current board of directors seems to be maintaining the status quo. This is not good news for shareholders or potential investors, especially considering the stock’s current trading range well below its pre-COVID levels. The only change in the board was the addition of James P. Gorman from Morgan Stanley, likely in response to pressure from Nelson Peltz’s bid for board seats. While Gorman’s presence may be valuable during a proxy fight, it doesn’t address the overall issue of the board’s lack of proactive decision-making. The current board has been overseeing the company through disruptive forces since 2019 and has failed to make significant changes to the business model. They also approved the appointment and subsequent dismissal of CEO Bob Chapek, without presenting a clear plan for the future. It’s clear that the board members were chosen based on their impressive resumes rather than their relevant experience in the entertainment industry. While transferable skills are important, having a showbiz veteran with a track record would be beneficial for the Disney board. In reality, many directors are beholden to senior management and are more focused on maintaining the status quo rather than challenging and making necessary changes. The board needs to show shareholders that they are demanding structural changes to the company’s business model and not just making minor tweaks. Shareholders need assurance that the board is holding management accountable and actively working towards a major pivot. Unfortunately, the board’s actions thus far have fallen short of investor expectations. Activists like Nelson Peltz are necessary to push for change in insular managements like Disney’s. Peltz has challenged the board to show a believable pathway to a higher stock valuation, and it remains to be seen if he will be successful in his efforts. However, it is clear that the board needs to do more to address the challenges facing the industry and consider potential solutions, such as breaking up the company into more logical verticals. The current board is emblematic of the tolerable cronyism that exists in corporate America, where directors are more focused on maintaining their positions and pleasing senior management than making bold decisions. Shareholders deserve more transparency and action from the board, especially considering the unique challenges of the entertainment industry. It’s important to remember that this is a complex business, and solutions won’t come easily or quickly. However, the board must rise to the occasion and show that they are actively working towards creating value for shareholders.



Source link