WeWork is a global leader in flexible workspace solutions, with more than 800 locations in over 100 countries worldwide. With a valuation of $47 billion and plans to go public before its dramatic fall from grace, WeWork had a lot riding on its board of directors. In this article, we'll explore WeWork's board of directors, analyzing their qualifications, roles, and responsibilities, as well as any controversies or criticisms they've faced.
For those unfamiliar with WeWork's board of directors, here's a rundown of the current members:
It's worth noting that WeWork's board of directors has undergone significant changes in recent years. In 2019, following the company's failed IPO attempt, co-founder Adam Neumann stepped down as CEO and was replaced by Artie Minson and Sebastian Gunningham. Additionally, SoftBank, WeWork's largest investor, took control of the company and appointed Marcelo Claure as Executive Chairman. These changes were accompanied by a shakeup of the board, with several members resigning and new independent directors being appointed.
WeWork's board of directors was initially composed of co-founders Adam Neumann and Miguel McKelvey, as well as several venture capitalists and real estate executives. However, following Neumann's resignation in September 2019, and the company's subsequent financial turmoil, WeWork's board underwent numerous changes. Today, all of WeWork's directors have been appointed by SoftBank, which took control of WeWork's board in 2019 following a $10 billion investment in the company.
SoftBank's takeover of WeWork's board of directors was a controversial move, as it effectively gave the Japanese conglomerate control over the struggling company. SoftBank's CEO, Masayoshi Son, had previously been a vocal supporter of Neumann and WeWork, but ultimately decided to take control of the board in order to try and turn the company around.
Since SoftBank took control of WeWork's board, the company has undergone significant restructuring and cost-cutting measures. This has included laying off thousands of employees, selling off non-core businesses, and renegotiating leases on office space. Despite these efforts, WeWork's financial future remains uncertain, and it is unclear whether the company will be able to return to profitability in the near future.
The board of directors is responsible for overseeing WeWork's overall strategy and operations, including its financial performance, risk management, and compliance with legal and regulatory requirements. They also have the important task of appointing and overseeing the executive team, including the CEO.
Each member of WeWork's board brings a unique set of qualifications and expertise to the table. Marcelo Claure, WeWork's executive chairman, has extensive experience in telecommunications and banking, having previously served as the CEO of Sprint Corporation and the Chairman of SoftBank Group International. Artie Minson, WeWork's CEO, has a background in finance, having previously served as the CFO of AOL Time Warner and the President of Time Warner Cable. Benjamin Dunham, WeWork's CFO, also has experience in finance, having previously worked at Goldman Sachs and Fortress Investment Group.
The three independent directors on WeWork's board also bring diverse perspectives and expertise. Frances Frei is a leading expert in organizational transformation, having previously served as the Senior Vice President of Leadership and Strategy at Uber. Shantanu Narayen is the CEO of Adobe, bringing valuable experience in software and technology. Rakefet Russak-Aminoach is the former CEO of Israel's largest bank, Hapoalim, and has experience in banking and finance.
In addition to their individual qualifications and expertise, the members of WeWork's board also bring a wealth of collective experience to the company. With backgrounds in telecommunications, finance, software, and banking, the board is well-equipped to guide WeWork through a variety of challenges and opportunities.
Furthermore, the board is committed to diversity and inclusion, with a gender-balanced composition and members from a variety of cultural and professional backgrounds. This diversity of perspectives ensures that WeWork is able to make informed decisions that take into account the needs and perspectives of all stakeholders.
WeWork's board plays a crucial role in shaping the company's business strategy and decision-making process. In the wake of WeWork's failed IPO and Neumann's departure, SoftBank implemented significant changes, including a focus on profitability, a shift away from Neumann's grandiose vision for the company, and a greater emphasis on transparency and corporate governance.
Furthermore, the board has also been instrumental in diversifying WeWork's offerings beyond traditional co-working spaces. Under the leadership of new CEO Sandeep Mathrani, the company has expanded into areas such as on-demand office space, enterprise solutions, and even residential real estate. This diversification has helped WeWork weather the challenges posed by the COVID-19 pandemic, as demand for traditional office space has declined.
The relationship between WeWork's board and executive team is critical to the success of the company. WeWork's board oversees the CEO and executive team, providing guidance and support when needed. However, conflicts can arise, as was demonstrated in the case of Neumann's ousting. As SoftBank took greater control over WeWork's board, conflicts between the board and Neumann came to a head, resulting in Neumann's departure and SoftBank's takeover of the company.
One of the key factors that can impact the relationship between the board and executive team is the level of transparency and communication. When there is open and honest communication between the two groups, it can lead to better decision-making and a stronger overall company culture. On the other hand, when there is a lack of transparency or communication breakdowns, it can lead to mistrust and conflict.
Another important aspect of the relationship between the board and executive team is the alignment of goals and values. When both groups are working towards the same objectives and share similar values, it can create a more cohesive and effective organization. However, when there are conflicting goals or values, it can lead to tension and disagreements that can ultimately harm the company's success.
WeWork's board members are compensated for their time and expertise, with each director receiving an annual retainer of $100,000, as well as additional compensation for meeting attendance and committee work. Some board members also receive equity in the company.
In addition to financial compensation, WeWork's board members are also incentivized to contribute to the company's success through various means. One such incentive is the opportunity to participate in the company's stock option plan, which allows board members to purchase shares of WeWork at a discounted price.
Furthermore, WeWork's board members are encouraged to actively engage with the company's community of members and employees. This includes attending events, visiting WeWork locations, and providing guidance and mentorship to entrepreneurs and startups within the WeWork network.
WeWork's board has undergone significant changes in its short history. From its early days as a start-up, the board has grown and shifted, reflecting the changing needs and priorities of the company. However, it was the dramatic changes in the wake of WeWork's failed IPO that garnered the most attention, including the departure of Neumann and the appointment of SoftBank-backed directors.
One notable change in WeWork's board membership occurred in 2018, when the company added its first female board member, Harvard Business School professor Frances Frei. Frei was brought on board to help address concerns about the company's culture and management practices, particularly in regards to allegations of gender discrimination and harassment. Her appointment was seen as a positive step towards improving diversity and inclusion within the company.
Despite the impressive qualifications and experience of WeWork's board members, some have faced criticisms and controversies. Marcelo Claure, in particular, has faced scrutiny over his role as SoftBank's representative on WeWork's board, with some arguing that he may have a conflict of interest given SoftBank's significant investment in the company. Additionally, Frances Frei has faced criticism over her role in Uber's corporate culture and the company's handling of sexual harassment allegations.
Another member of WeWork's board who has faced criticism is Bruce Dunlevie. Dunlevie, a partner at venture capital firm Benchmark, was involved in the controversial ousting of Uber's former CEO, Travis Kalanick. Some have questioned his judgment and leadership abilities as a result of his involvement in the situation.
Furthermore, Rebekah Neumann, co-founder and former chief brand officer of WeWork, has also faced controversy. Neumann's unconventional leadership style and alleged self-dealing, including the leasing of properties to WeWork and her involvement in the company's trademarking of the word "We," have raised concerns among investors and the public.
WeWork's board played a critical role in the company's ill-fated IPO filing and subsequent withdrawal. The board was responsible for reviewing and approving the IPO documents, as well as providing guidance and support to the executive team. However, questions have since been raised over the board's oversight and decision-making, particularly in light of the revelations about Neumann's personal behavior and conflicts of interest.
One of the key issues that has been raised about the board's role in the WeWork IPO is the level of due diligence that was conducted. Some critics have argued that the board should have been more thorough in its review of the company's financials and business model, and that this could have prevented some of the issues that later emerged.
Another area of concern is the board's composition and independence. WeWork's board was heavily influenced by Neumann, who had significant control over the company's voting shares. This has led some to question whether the board was truly independent and able to provide effective oversight of the company's management.
With SoftBank in control of WeWork's board, it's unclear what the future holds for the company's board composition and structure. However, there have been calls for greater diversity and transparency on the board, particularly given WeWork's tumultuous history. As WeWork strives to regain its footing and rebuild its reputation, the role and composition of its board will undoubtedly be critical.
One potential solution to the calls for greater diversity on WeWork's board is the implementation of a "Rooney Rule," similar to the NFL's policy requiring teams to interview minority candidates for head coaching and senior football operation jobs. This would ensure that a diverse pool of candidates is considered for board positions, ultimately leading to a more diverse and inclusive board. Additionally, there have been discussions about reducing the size of the board and increasing the number of independent directors to improve transparency and accountability.
Unfortunately, we were not able to secure interviews with current or former members of WeWork's board for this article. However, their perspectives and insights would undoubtedly be valuable for understanding the inner workings of the company and its board.
WeWork's board is not unique in the tech industry, with many other high-growth companies facing similar challenges and opportunities. However, given WeWork's unique business model and high valuation, it will be important for the company to learn from the experiences of other tech companies and adhere to industry best practices for corporate governance and board oversight.
The story of WeWork's board is a cautionary tale for any fast-growing company. As a company scales and expands, the role of the board becomes increasingly important, providing oversight, guidance, and support to the executive team. However, a board composed of like-minded individuals without diverse perspectives and expertise can be a liability, as we saw in the case of WeWork's failed IPO and subsequent turmoil. As WeWork seeks to rebuild and regain investors' trust, the composition and effectiveness of its board will be critical.
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