Fortune Modern Board 25
The Top Ten
Microsoft
Microsoft has been one of the top-performing companies in tech (or in any sector) for several years running. It also earns the top spot on our inaugural Modern Board 25, thanks to high marks in gender equality, board independence, board expertise, and ESG. Eight of its 12 board members and three out of four committee chairs represent gender or ethnic diversity, which studies have shown correlates with stronger company performance and a greater ability to handle emerging business challenges. Microsoft’s lead independent director is John W. Thompson, former CEO of Virtual Instruments and Symantec, and one of the most prominent Black executives in tech. After joining the board in 2012, Thompson succeeded Microsoft founder Bill Gates as chairman in 2014 and held that role until 2021. Gates left Microsoft’s board in March 2020. Reid Hoffman, angel investor and cofounder of LinkedIn, joined the board in 2017 after Microsoft bought his company for $26 billion in 2016. Microsoft’s board also boasts former U.S. secretary of commerce Penny Pritzker, and the former worldwide chairman for Johnson & Johnson, Sandra Peterson. The current CEOs of GlaxoSmithKline, ADP, and Wells Fargo are also directors. Padmasree Warrior, former CTO of Cisco, and two CFOs round out the group, along with CEO Satya Nadella, who was named chairman in 2021. Some governance experts consider having the CEO serve as board chairman to be suboptimal, but as Thompson explained in a recent interview, Nadella has earned the role of chairman because of the company’s exceptional performance under his watch; since Nadella became CEO in 2014, the company has seen major growth in cloud services and video gaming while remaining dominant in productivity software. Microsoft is one of only a handful of U.S. companies to have exceeded a $1 trillion market capitalization; after briefly dipping below $150 at the beginning of the COVID-19 outbreak in North America, its share price has been over $300 for most of 2022. Microsoft made headlines in early 2022 with its proposed acquisition of Activision Blizzard, a gaming company embroiled in numerous scandals involving its allegedly toxic work environment. Microsoft’s board and C-suite leaders will face a major challenge as they seek to reshape the acquired company’s culture.
Hewlett Packard Enterprise
In 2014, the old-guard Silicon Valley giant Hewlett-Packard split into two companies, HP Inc. and Hewlett Packard Enterprise. Since then, both have found strong footing in corporate governance: Both HPE and HP made this list. (HP is No. 9.) That fact signals a remarkable turnaround. A little over a decade ago, Hewlett-Packard’s board endured multiple controversies involving proxy fights, unusual CEO transitions, and a scandal over surveillance of colleagues and journalists that led to the departure of four directors in 2011. With those issues far in the past, HPE’s board earned the No. 2 spot on this list thanks to strengths in board expertise, gender equality, and board independence, among other criteria. The company specializes in enterprise information tech; it has recently seen particularly robust growth from its Intelligent Edge division, a data analytics and business intelligence platform. HPE’s board is chaired by Patricia Russo, former CEO of Alcatel-Lucent, the communications company. Russo is also a director at Merck, General Motors, and the private equity firm KKR. HPE’s directors’ careers reflect a wide range of expertise. Daniel Ammann is a former president of General Motors, as well as its former CFO, and until recently was CEO of GM Cruise LLC, a subsidiary of GM that focuses on autonomous vehicles. Pamela Carter is a former executive at Cummins, a machinery design and manufacturing company, where she was a business unit leader and general counsel; she chairs HPE’s HR and compensation committee. George R. Kurtz started his career at PwC and later founded a tech company that was acquired by McAfee. Mary Agnes Wilderotter chairs the audit committee and is the former CEO of Frontier Communications. In the non-CEO realm, Raymond Ozzie is a former chief software architect at Microsoft and a fellow of the Computer History Museum; Gary M. Reiner is the former chief information officer at General Electric; and Raymond Lane is the former COO of Oracle and partner emeritus at the famed venture capital firm Kleiner Perkins.
Walgreens Boots Alliance
Former Walmart executive and Starbucks COO Roz Brewer took over as Walgreens Boots Allilance’s CEO in March 2021. The company’s lead independent director is William C. Foote, former chairman and CEO of USG Corporation, a building materials manufacturer. Stefano Pessina, the company’s former CEO, is the current executive chairman. Walgreens earns the No. 3 spot on the strength of high scores for board independence, age dispersion, ESG, and having senior independent nonexecutive directors. (A nonexecutive director is a board member who is not currently serving as an executive at the company. Having a high percentage of nonexecutives on the board is considered a best practice, according to Diligent, because it’s easier for such directors to offer objective advice to the management team.) Walgreens has won over some analysts and investors with a long-term strategy that includes investment in primary-care clinics, a move meant to increase convenience for customers and further expand the company’s role beyond retail and pharmacy services. The two other former CEOs on the Walgreens board reflect key areas in which its business is focused. Ginger L. Graham is the former president and CEO of Amylin Pharmaceuticals, and Nancy M. Schlichting is the former CEO of the Henry Ford Health System. Valerie Jarrett, senior adviser to President Barack Obama from 2009 to 2017, is also a director.
Intel
The pioneering chip manufacturer earned the No. 4 spot because of its strengths in board independence and age dispersion. Despite up-and-down stock performance of late, Intel received a recent upgrade from analysts due to improved cash flow and long-term projects put in place by CEO Pat Gelsinger, who took on the role in February 2021. Gelsinger has pledged $250 billion over the next decade for capital expenditures, and Intel is opening two $10 billion fabrication plants in Arizona and another two $10 billion plants in Ohio. The CEO was acknowledged by President Biden at the State of the Union address in 2022 for his plans to open a semiconductor hub near Columbus. Intel’s board has been chaired since January of 2020 by Omar Ishrak, a former chairman and CEO of Medtronic. The rest of the company’s slate of directors has a distinct academic flavor that is relatively rare for a corporate board. Andrea Goldsmith and Tsu-Jae King Liu are the deans of the engineering schools at Princeton University and UC Berkeley, respectively. Risa Lavizzo-Mourey is a former professor of public health at the University of Pennsylvania; she was previously CEO of the Robert Johnson foundation. Frank Yeary is the former vice chancellor at UC Berkeley, though he previously spent 25 years in finance, including an executive role at Citigroup; he is currently a managing member at Darwin Capital Advisors. CORRECTION: An earlier version of this story incorrectly identified Jim J. Goetz as the chair of Intel's board. Goetz is an independent director.
3M
The company founded as the Minnesota Mining and Manufacturing Company makes the list with an impressive and diverse group of directors. 3M’s board scored highly in gender equality, senior independent nonexecutive director representation, and board expertise. While recent results for the company have been impacted by supply-chain constraints and rising inflation, long-term prospects look good. Patricia A. Woertz, former chairman and CEO of Archer Daniels Midland, is one of six 3M board members (out of 13 total) to have held a CEO post. The others include Gregory R. Page (Cargill), Muhtar Kent (Coca-Cola), Herbert L. Henkel (Ingersoll-Rand), Michael L. Eskew (UPS), and David B. Dillon (Kroger). 3M CEO Michael Roman also serves as the board’s chairman. Dow CEO James R. Fitterling is the other currently active CEO on the board. Roman has called the pandemic an “awakening” for 3M. In the aftermath of George Floyd’s murder, Roman told Fortune in 2021, the Minneapolis-based company increased its focus on the well-being of employees and the economic health of the Twin Cities area. He said that business leaders can “use the same lessons and abilities you have built in business success and apply them more broadly to whatever is most important to your stakeholders—and that includes your employees.” The former CFOs of Microsoft and Accenture are 3M directors, as is Dambisa Moyo, former global economist at Goldman Sachs and director at Chevron and Condé Nast. 3M’s board also includes Susan Kereere, the head of global business solutions at Fiserv, and Thomas K. Brown, the former group vice president of global purchasing at Ford. These two offer the perspective of the company’s customers, an increasingly important voice to have on any corporate board.
