Mass Resignation of 23andMe Directors Caps Year Beset by Board Drama

In the latest example of board-related drama in a year riddled with it, embattled genetic testing company 23andMe was dealt yet another blow last week when all seven of its independent directors resigned en masse over disagreements about the company’s direction. The revolt at 23andMe leaves CEO and co-Founder Anne Wojcicki as the only remaining board member and will likely complicate her plans to take the company private.

Founded in 2006, 23andMe has had a challenging few months. It went public in 2021 via a special purpose acquisition company (SPAC) but has struggled to maintain its footing since and reported a net loss of $667 million in its last fiscal year. In December 2023, the company announced that hackers had gained access to the personal data of 14,000 customers and profile information about 6.6 million other individuals – roughly half of its 14 million customers.

Directors formed a special committee in March to discuss the company’s best path forward. Wojcicki submitted a proposal in July to take the company private, but the special committee quickly rejected it and expressed disappointment that Wojcicki did not “submit a fully-financed, fully-diligenced [sic], actionable proposal that is in the best interests of the non-affiliated shareholders.”

Fast forward to September 17, when all seven independent directors submitted their resignations. In a letter to Wojcicki, they said they still had not seen an acceptable proposal or “any notable progress over the last 5 months.” Despite their continued support for the company’s mission, the outgoing directors said they “differ on the strategic direction for the Company going forward.”

Wojcicki told employees that she still believes taking the company private is 23andMe’s “best opportunity for long term success” and that she will begin a search for new independent directors to join the board. The company also said last week that it had agreed to pay $30 million to settle a class-action lawsuit that accused it of failing to protect customers whose personal information was exposed in the data breach.

But 23andMe is hardly the only company that has been dealing with board-related drama over the last year. For example, ChatGPT creator OpenAI has had more than its fair share. The company recently cycled through three different CEOs in less than a week, ending up with the same one it had at the start. In November, the OpenAI board cryptically announced that its co-founder and CEO, Sam Altman, was getting booted for being “not consistently candid in his communications with the board and the broader OpenAI team.”

With the vast majority of OpenAI employees threatening to follow Altman out the door, he was re-installed as CEO. Since then, intrigue has abounded as former board members have spilled the beans about the rationale behind the initial decision to remove Altman. It is also worth noting that a third-party investigation commissioned by OpenAI came down on Altman’s side.

Then there are machinations at Walt Disney Company, which has a history of power struggles at the top. The House of Mouse went through the most expensive proxy fight in history earlier this year. After sinking an estimated $40 million into an effort to quell the rabble-rousing of activist investor Nelson Peltz earlier this year, Disney CEO Bob Iger emerged with a decisive victory.

The durability of these perceived wins for the C-suites will almost certainly come down to the performances of the companies going forward. Even if all three thrive, though, that won’t keep boards of directors free from similar drama at other companies.