Three of the biggest bad-news leadership stories of the past 12 months advanced yesterday:
-Just when you thought that maybe FIFA had finally gained control of its corruption scandal, after months of constantly playing defense against troubling new revelations, it turns out that, no, actually nothing has changed. The world soccer authority in February replaced former president and accused lawbreaker Sepp Blatter with Gianni Infantino, who promised to “restore football’s reputation.” Then the Panama Papers appeared, and guess whose name turns up. Infantino’s signature is reportedly on two contracts selling a set of TV rights to an Argentine father-and-son marketing firm for far less than their market value; the father and son were indicted in the U.S. last spring on separate charges of corruption and bribery. Also in the Panama Papers is a member of FIFA’s Ethics Committee, who is shown to have had a relationship with a Uruguayan businessman whom the U.S. has charged with bribery.
None of this proves that anyone at FIFA has done anything wrong. But these developments mean more attention from law enforcement, more distraction at FIFA from its purpose, more sponsorship cutbacks, and greater loss of faith by fans. FIFA’s leadership crisis, far from turning a corner, could get worse.
-Doubts about whether Yahoo CEO Marissa Mayer and the company’s directors are operating in good faith grew yesterday. Activist investor Jeff Smith of Starboard Value Fund has been urging for months that Yahoo sell its core Internet businesses, and the company finally agreed. But then nothing seemed to happen. Last month Smith sent the company an open letter suggesting strongly that leaders were deliberately going slow. Then he proposed replacing Yahoo’s entire board with a rival slate of directors. That move seemed to get their attention, and the company publicly invited bids, due by next Monday.
But yesterday Re/code reported that the financial disclosures the company is showing to potential bidders seem, at least to some, deliberately obfuscatory. They also reveal that Mayer’s turnaround strategy, which she still promotes vigorously, won’t deliver results this year; the company expects revenue and profits to continue their years-long decline.
-The owner of three U.S. Volkswagen dealerships sued the company yesterday, the first dealer to do so. Dealers have so far preferred to negotiate with VW rather than wage war. The new lawsuit seeks class-action status, and maybe it’s just the latest step in the negotiation. After CEO Matthias Müller’s many missteps in managing this crisis, the company seems finally to have learned that combative or quibbling public statements don’t go over well. In response to the suit, it said only that it’s committed to ending this mess “as quickly as possible…as we work to earn back the trust of our customers and dealers and the public.” One way or another, the dealer part will likely cost VW additional billions of dollars.
You can share Power Sheet with friends and followers here.
What We’re Reading Today
Mossack Fonseca co-founder defends the firm
The Panamanian law firm at the center of the data leak that uncovered a treasure trove of information on dummy corporations for the rich and powerful, says it did nothing wrong. Jürgen Mossack says his company will be more selective of its clients and increase its cybersecurity moving forward. WSJ
Yahoo warns potential acquirers of $600 million revenue drop
As Yahoo’s board tries to interest buyers in its Internet business, it has sent a financial rundown of the organization to potential bidders. In it, it highlights a company that’s expecting a $600 million drop in revenues in 2016, along with a fall in earnings. CEO Marissa Mayer is also awarding over $400 million in stock-based compensation to keep valued employees, all while Yahoo cuts its workforce by 1,500 people this year. Yahoo has given bidders until next week to place an initial offer. Re/code
Another death linked to Takata airbags
A 17-year old who died in a minor crash last month, was driving a recalled 2002 Honda Civic. It’s the 10th death in the U.S. linked to the Takata airbags, which can explode upon impact. Honda said that the victim received multiple notices about the recall. The auto maker has stepped up its recall efforts, sending millions of mailers, emails, and phone calls. But legislators have asked why Shigehisa Takada‘s Takata hasn’t done more. Fortune
The Pope to issue major document on family issues
Pope Francis has been working on the “Amoris Laetitia,” or “The Joy of Love,” for two years, which could dictate new church practices, based on the results of questionnaires from Catholics around the world, as well as debates with scholars and church officials. Francis’ conclusions from the conversations, which will be released tomorrow, could drastically alter many of the church’s standings, including its rules on same-sex marriages or cohabitation. NYT
Building a Better Leader
Golfer Sergio Garcia prepares for the Masters…
…like any other tournament. If you prepare with high intensity, there’s no need to alter your strategy for big moments. Inc.
The 50 fastest growing companies owned by women
No. 1 is a high-end water bottle company. Fortune
Customers want the human touch
More than 80% of paid TV subscribers who were surveyed said they wanted a human to help them solve a customer service problem. CIO
Crossing the Line
Former Massey Energy CEO sentenced to a year in prison
Don Blankenship was convicted in December for conspiring to violate federal mine safety laws. It relates to a 2010 incident in which a Massey mine exploded, killing 29 people. It’s believed that Blankenship is the first CEO of a major U.S. company to be convicted on a workplace safety charge that resulted in a catastrophe. WSJ
Malaysian Fund’s board offers its resignation
A Malaysian parliamentary inquiry into state fund 1MDB found senior management withheld information and made trades without the board’s knowledge. The U.S. and other countries are investigating 1MDB for money laundering and corruption, which has entangled large banks, including Goldman Sachs. It’s the first time a Malaysian entity has argued any wrongdoing by 1MDB, but it didn’t implicate Prime Minister Najib Razak, head of the firm’s board of advisors, who had over $1 billion deposited into personal accounts from 2011 to 2013. Reuters
Some American businesspeople named in the Panama Papers…
…are already under indictment or convicted for financial crimes. One example is Benjamin Wey, president of the New York Global Group, who has been accused of fraud for manipulating stock prices with the help of U.S. shell companies. Panamanian law firm Mossack Fonseca, according to reports, helped Wey build the companies used in the alleged manipulation. USA Today
Up or Out
McDonald’s Chairman Andrew McKenna will step down next month. Fortune
Toshifumi Suzuki, CEO of Seven & i Holdings, owner of 7-Eleven, has resigned. Reuters
Bain Capital has named Josh Bekenstein and Steve Pagliuca co-chairmen. It also promoted John Connaughton and Jonathan Lavine to co-managing partners. Fortune
Arby’s has hired Darla Morse as its CIO. WSJ
Fortune Reads and Videos
DEA deliberates over marijuana
It currently categorizes the drug with heroin and LSD, but a downgrade could be a boon for the legal marijuana industry. Fortune
Pacific Sunwear has filed for bankruptcy
It will likely begin to close stores this fall. Fortune
GE CEO Jeff Immelt to Bernie Sanders: We create jobs…
…and don’t simply talk about it. Fortune
Nokia plans to cut thousands of jobs
It will lay off 1,300 employees in Finland and 1,400 in Germany. Fortune
California Governor Jerry Brown turns 78 today. Biography
Share Today’s Power Sheet:
|Produced by Ryan Derousseau|