The following story from The Hill describes an event where all the board left en mas because it didn't agree with the direction the CEO was going. Before this event, the board had stated it did not agree with the founder/CEO's plan and even asked for changes that would make it more comfortable with the plan. No changes were offered.
I'm a bit uncertain as to how decisions can now be made without the board but that's a different hurdle to jump. The reality though is very sobering and speaks to a variety of actions that might have been pursued ahead of this conclusion. And yet they were not. The case does provide boards and their execs some moments to pause while considering whether this some day could be them in a similar situation and what steps they might take to avert such an outcome.
Here's the story.
The departures leave just one sitting member of the board, its chair, Anne Wojcicki, who co-founded the genetics-testing company in 2006 and serves as its chief executive officer.
The Special Committee gave Wojcicki a “limited amount of additional time” to revise her proposal to take the company private.
In their letter Tuesday, however, the board members wrote, “After months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders.”
“We believe the Special Committee and the Board have provided ample time for you to submit such a proposal. That we have not seen any notable progress over the last 5 months leads us to believe no such proposal is forthcoming,” the letter continued, adding that there would be no further extensions to revise such a proposal.
The directors, who largely did not support the plan to take the company private, said it “is clear that we differ on the strategic direction for the Company going forward” and said they thought it was in the best interests of the company and its shareholders to resign, “rather than have a protracted and distracting difference of view with you as to the direction of the Company.”
The company went public in 2021, when a special purpose acquisition company valued it at around $3.5 billion, CNBC reported. The company now has a market cap of under $200 million and closed at 34 cents per share on Tuesday.
After receiving a deficiency letter from the Nasdaq Listing Qualifications Department in November 20, notifying the company that it had 180 days to bring the share price to $1, the board formed the Special Committee to consider paths forward.
Wojcicki sent a memo to employees on Tuesday saying she was “surprised and disappointed” by the resignations and doubling down on her commitment to taking the company private.
“I remain committed to our customers, my employees and to our stockholders to achieve our goals,” she wrote. “I continue to believe that we will be better positioned to achieve our mission and goals outside of the short term pressures of the public markets and that taking 23andMe private will be the best opportunity for long term success.”
“We will immediately begin identifying independent directors to join the board,” she continued. “I want to thank the directors for their service to the company and its stockholders.”