The Washington Post - USA (2020-12-02)

A18 EZ RE THE WASHINGTON POST.WEDNESDAY, DECEMBER 2 , 2020

BY HAMZA SHABAN

Nasdaq has asked the Securi-

ties and Exchange Commission to

approve new listing rules that

would compel the companies on

its stock exchange to regularly

report on the diversity of their

boards and require that they have

at least one female director and a

member of an underrepresented

minority.

Companies that don’t meet the

criteria would have to explain

why, according to the plan, or face

possible delisting.

The exchange includes many of

the largest publicly traded compa-

nies in the United States, includ-

ing Apple, Costco and Starbucks.

If the policy is adopted, Nasdaq

said in a news release, more than

3,000 listed members would have

one year to publicly disclose their

diversity statistics. Companies

would have two years to partially

meet the new inclusivity bench-

marks, including ensuring at least

one director identifies as a wom-

an and one identifies as LGBTQ or

as part of an underrepresented

minority. Top-tier companies

would be expected to meet the full

requirements within four years.

Nasdaq estimates that the vast

majority of its 3,330 listed compa-

nies already have at least one

director in an underrepresented

group.

Nasdaq said it came to its deci-

sion after analyzing more than

two dozen studies that found a

solid link between diverse boards

and better corporate governance

and financial performance.

“Nasdaq’s purpose is to cham-

pion inclusive growth and pros-

perity to power stronger econo-

mies,” Adena Friedman, Nasdaq’s

president and chief executive,

said in a statement Tuesday. “Our

goal with this proposal is to pro-

vide a transparent framework for

N asdaq-listed companies to pre-

sent their board composition and

diversity philosophy effectively to

all stakeholders; we believe this

listing rule is one step in a broader

journey to achieve inclusive rep-

resentation across corporate

America.”

The move toward more-diverse

boardrooms continues a roughly

five-year trend that began in Eu-

rope, said George Fleck, an execu-

tive recruiter who publishes

D irectorMoves, a twice-weekly re-

port that tracks SEC filings for

board and C-suite changes. “We’ve

been tracking this since 2014, and

women joining boards at all mar-

ket caps is significant, so the nee-

dle is moving,” he said in an inter-

view.

Since April, the corporate

boards for all U.S. public compa-

nies have had a net gain of 472

women and a net loss of five men,

according to Fleck’s analysis. But,

he noted, the pandemic has de-

pressed those figures, as board

movement is down by about one-

third for the first half of this year

compared with 2019.

While the trend is driving com-

panies to bring in more underrep-

resented people, regardless of a

mandate, Fleck said Nasdaq’s pro-

posal would affect companies

with multiple classes of stock

where a set of shareholders has

dominant voting rights and may

be resistant to change.

If federal regulators sign off,

Nasdaq would become the first

major exchange with such firm

diversity requirements. Other fi-

nancial leaders have tried to im-

prove inclusion through govern-

ing mandates and heightened

transparency.

In January, Goldman Sachs

chief executive David Solomon

said that the bank, which is one of

the largest underwriters of initial

public offerings, would not take

companies public in the United

States or Europe if they did not

have at least one board director

who is a member of a traditionally

underrepresented group, based

on gender, race, ethnicity, sexual

orientation or gender identity.

In June, Reddit co-founder

Alexis Ohanian resigned from the

board and asked to be replaced by

a Black candidate, calling it “long

overdue to do the right thing.” The

tech company honored the re-

quest, tapping Michael Seibel to

fill the spot.

And in September more than

30 major companies — including

Wells Fargo, General Motors and

Target — agreed to publicly share

their government diversity re-

ports by early next year. Many of

the nation’s largest technology

companies have been releasing

annual diversity reports for years,

often leading to criticism that

they show a lack of meaningful

progress in hiring and advancing

diverse talent.

“Incremental change and

w indow-dressing isn’t going to

cut it anymore as consumers,

stakeholders and the government

increasingly hold corporate

America’s feet to the fire,” Antho-

ny Romero, the executive director

of the American Civil Liberties

Union, said in a statement. “Nas-

daq’s efforts to prod and push its

listed companies is a welcomed

and necessary first step.”

That the composition of U.S.

business leaders does not reflect

the broader American population

was highlighted further earlier

this year during the nationwide

protests for racial justice.

The broader societal reckoning

elicited pledges from many U.S.

corporations to do more to com-

bat systemic racism and examine

their roles in perpetuating in-

equalities in hiring, pay and pro-

motion, and fostering toxic work-

place cultures and consumer dis-

crimination. But corporate Amer-

ica has been seen as slow to act,

raising skepticism about its com-

mitment to change. In Silicon Val-

ley, for instance, where diversity

reports are already common, the

data shows that most tech compa-

nies have not significantly in-

creased the percentage of Black

and Latino employees in the past

six years.

[email protected]

Nasdaq pushes for

diversity mandates

on company boards

BY HEATHER KELLY

san francisco — Enterprise
software company Salesforce an-
nounced Tuesday that it will pur-
chase workplace chat tool Slack
for nearly $28 billion, adding the
popular collaboration app to its
portfolio.
The two companies have en-
tered into a definitive agreement
for a sale in cash and stock. Slack
CEO Stewart Butterfield will con-
tinue to lead Slack as an operat-
ing unit within Salesforce. Sales-
force says it plans to combine
Slack with its Salesforce Custom-
er 360 software, which collects a
company’s customer information
in one place, and making Slack its
new interface.
The sale is expected to close in
mid-2021.
Slack has become indispen-
sable for many businesses operat-
ing remotely during the coronavi-
rus pandemic. A cash infusion
from a bigger company could
help Slack expand even more
rapidly and better compete with
rivals such as Microsoft Teams.
Here’s a primer on what it could
mean for workplace chatters,
Slack competitors and the future
of your favorite Slack features.

What is Slack?

If you already know what Slack
is, chances are you know it a little
too well. The workplace collabo-
ration software is primarily used
by companies as an alternative to
email, though some non-work-
place groups have adopted it for
communication as well. Instead
of a full email inbox, users get
chat messages instantly on the
Slack web app, the desktop app or
their phone. There is no place or
time Slack messages can’t find
you, unless you remember to hit
snooze.
What makes the app so appeal-
ing to companies are the details.
There’s the ability to make public
or private chat groups for teams
and departments, or just directly
message people. Most appealing-
ly to Salesforce, it is designed to
work with other popular work-
place tools such as Google Docs or
Trello, which makes it useful for
more than just chat. And fun
details such as GIFs, animated
emoji and shortcuts for quizzes or
creating emoticons make it an
attractive place for employees to
spend their virtual days.

Why is Slack so important
now?

When companies started shift-
ing their in-person, white-collar
workforces to remote, they found
themselves needing new ways to
communicate. Slack, already pop-
ular with both a free and paid
option, was suddenly a primary
way people were collaborating on
projects, conferring with bosses
and co-workers, and even social-
izing. The phenomenon wasn’t as
widely recognized as the Zoom
boom, when that video-chatting
app jumped from basic office uses

to a necessity for families and

friends, but it was also key.

“The events of this year have

greatly accelerated the move by

companies and governments to

an all-digital world, where work

happens wherever people are,”

Salesforce said in its announce-

ment of the deal. It says the

merging of the companies’ soft-

ware would create a “unified plat-

form” for workers.

Bernstein analysts tout the

“high virality” of Slack, as well as

its “aesthetic user interface.”

Slack has said it has about

12 million daily active users, and

Salesforce on Tuesday said Slack

now has more than 142,000 pay-

ing customers. Its biggest com-

petitor, Microsoft Teams, says it

has 115 million daily active users.

That number could be bolstered

by the way Microsoft integrates

Teams with its other Office prod-

ucts.

The announcement of the deal

included that Slack added 12,

new paying customers, and re-

ported $234.5 million in total

revenue for the quarter.

“Slack faces heavy competition

from Microsoft’s Teams product,”

Bernstein analysts note. They

said the competition has become

more prominent as usage metrics

between the two services are

compared — and Slack’s execu-

tives talk about competition

on their quarterly earnings calls,

too.

While a coronavirus vaccine is

expected to be broadly available

next year, many companies have

already said they’re making some

remote-work changes perma-

nent. Twitter has said its employ-

ees can choose to continue to

work remotely indefinitely, and

Facebook has said up to half its

workforce could be remote in 10

years. While much is still uncer-

tain, Silicon Valley is betting that

remote work, and the software

that makes it possible, are here to

stay.

Why Salesforce wants to buy

it (and what is Salesforce

again?)

Salesforce is known for a lot of

things. Its core products are

cloud-based programs for man-

aging marketing and sales. But

it’s also known for its vocal chief

executive, Marc Benioff; its sky-

line-altering Salesforce tower in

San Francisco; and popping up in

the news as a rumored buyer for

big-name consumer tech compa-

nies such as LinkedIn (now

owned by Microsoft) and Twitter

(never sold).

Slack is the largest acquisition

in Salesforce’s 21-year history.

Purchasing Slack gives Sales-

force a tool to fight one of its

rivals, Microsoft, which has been

pushing Teams heavily during the

pandemic. Google has also been

pushing its suite of collaboration

and video tools, and Zoom has

risen as a video-only option.

“Stewart and his team have

built one of the most beloved

platforms in enterprise software

history, with an incredible ecosys-

tem around it,” said Salesforce

CEO Marc Benioff, who also wel-

comed Slack into the “Salesforce

Ohana.” (Ohana is the Hawaiian

word for family, and Benioff

claims a strong connection to the

island chain.)

Bernstein analysts say they

think Salesforce “has been inter-

ested in expanding into the col-

laboration space for many years

(and made multiple prior at-

tempts) and Slack provides a

clear channel into the space.”

But UBS analysts warn in a

note that the acquisition may not

be a fit for Salesforce and could

stretch it after some other pur-

chases — such as its acquisition of

data visualization software com-

pany Tableau for $15.3 billion in

2019 — take it further from its

core business of customer rela-

tionship management.

“Salesforce has a solid acquisi-

tion track record and many inves-

tors might simply give Sales-

force’s CEO the benefit of a doubt

on a Slack acquisition,” the ana-

lysts write. Previous acquisitions

have panned out better than ex-

pected. But factoring those in,

plus Slack: “We’re less and less

clear about the direction that

Salesforce is heading.”

Why Slack would want to be

bought

A buyer like Salesforce gives

Slack an infusion of cash and

resources to build out its software

faster and help it take on Micro-

soft Teams. Slack, founded in

2009, has done an impressive job

expanding on its own. But the

pandemic has put more of a focus

on remote work, and other, larger

companies are suddenly more

than eager for a piece of the

fast-growing industry that makes

a world without offices possible.

Salesforce has a good track record

of buying companies and fueling

their growth, analysts say.

Stifel analysts dub Slack “wild-

ly popular” but note that it’s also

unprofitable.

“The tie-up between Salesforce

and Slack would position well for

the ‘democratization’ of enter-

prise software,” Stifel analysts

add.

What will the takeover mean

for me, a Slack user?

Will Salesforce take away your

favorite Slackmoji (the dancing

otter)? Will it be renamed Sales-

force Chat? There are always

questions about what will happen

to a product when it’s purchased

by a larger company.

Salesforce is no stranger to

snatching up existing brands, but

few have been as well known

outside its industry as Slack. The

chat company’s brand loyalty

could influence how much Sales-

force decides to tweak, and how

much it leaves alone. Salesforce

has already announced plans to

combine Slack with its existing

software, but that could mean

more changes for Salesforce users

than Slack users in the short

term.

Scaring off longtime users by

replacing Slack’s rainbow logo

with Earnie the badger, one of

Salesforce’s characters, is prob-

ably not on the company’s to-do

list.

[email protected]

What Slack purchase means for users

STEPHEN LAM/GETTY IMAGES

Pedestrians pass Slack headquarters in San Francisco. The workplace chat tool has played a key

communications role for many companies whose employees have been forced into remote setups.

Salesforce likely to keep

fun aspects of popular

workplace chat tool

Get a FREE Customized Quote Today

MHIC #125450 | DC #67004413 | VA #2705 108835A

Don't Replace...REFACE!

Fast &

Affordable

Kitchen

Remodel

202-741-4432 DC | 301-637-0092 MD | 703-258-1753 VA

Transform your Kitchen with the Look of New Cabinets

Available in a variety of panel styles, colors and wood grains

Complete Financing

Available Now

$

500 Off

CABINET REFACING

Some restrictions may apply.

Limited time offer.

Call Now

for $2500 OFF

703-468-1540 VA

301-841-8322 MD

202-794-9033 DC

• Quality You Can Afford


• Complete Bath Remodel

60

%

off

installation

MHIC #125450 | DC #67004413 | VA #2705 108835A | WVA #

Payments^

as low as

$

149

GUIDELINES

STRICTLY

FOLLOWING

CDC

SPEC

IAL

Summer