What: Macy’s Inc.'s agreement to add Arkhouse Management's experts to its board amid private takeover attempts.

Why it is important: This development highlights the crucial role of corporate boards in overseeing company strategies, making pivotal decisions, and balancing various stakeholders' interests, including responding to activist investors.

The recent truce between Macy’s Inc. and Arkhouse Management, which resulted in Macy’s agreeing to include experts chosen by Arkhouse on its board, casts a spotlight on the function and significance of corporate boards. This scenario exemplifies the dynamic and sometimes contentious relationship between boards and activist investors, especially when potential private takeovers are in play. Corporate boards are critical in guiding the CEO, approving significant actions, and ensuring the company's welfare, necessitating members to possess a blend of credible experience, diverse skills, and technological awareness. The transformation of boards over recent years towards more diversity and technological savviness marks a shift from the past perception of boards being mere echo chambers for the CEO. Effective board composition requires members who not only complement each other’s skill sets but also fit the company's culture and are genuinely dedicated to its success. This case also emphasizes the fiduciary duty board members have towards the company and its shareholders, highlighting the complexities of their roles in navigating corporate challenges and strategic decisions.

Macy’s truce with Arkhouse shines bright light on boards