Microsoft Won’t Imminently Replace Steve Ballmer on Board

Tickers in this article: MSFT

NEW YORK ( TheStreet) -- Microsoft won't imminently announce a board replacement to Steve Ballmer, according to a source familiar with the company's thinking. The company's board of directors, currently at 10-members excluding Ballmer, is effective and unlikely to be changed ahead of Microsoft's annual shareholder meeting this fall, that source said.

Ballmer resigned from Microsoft's board of directors on Tuesday to focus on teaching engagements, charitable work and his ownership of the Los Angeles Clippers , a NBA franchise he recently acquired for about $2 billion. The resignation of Ballmer from Microsoft's board caps a year of dramatic change for the software, hardware and IT services giant. In February, Ballmer relinquished his CEO role at Microsoft, paving the way for Satya Nadella to replace him.

At the time, John Thompson was also appointed independent chairman of the company's board of directors, paving the way for co-founder Bill Gates to take a more active role in the company day-to-day operations. Nadella and Gates will not take expanded roles on Microsoft's board as a result of Ballmer's retirement.

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Because Microsoft appoints board directors on a rolling basis, and at a cadence of about one new director a year in recent history, the company currently has a fully functional board even without Ballmer. At the end of July, Microsoft appointed John Stanton, a deeply experienced telecom executive who cut his teeth in the wireless industry with Craig McCaw, to its board of directors. In March, Microsoft appointed G. Mason Morfit, an executive with hedge fund ValueAct Capital Management , to its board of directors.

ValueAct Capital and Microsoft declined to comment for this story.

TheStreet's source said that Stanton, who lives in the greater Redmond, Wash.-area, will bring important skills in the telecom and wireless market to Microsoft's board of directors, potentially closing some skill gaps. In 2014, Microsoft closed its acquisition of Nokia's handset division, and CEO Nadella has been working to integrate the company's smartphone and tablet hardware with its wider software, data analytics and cloud computing offerings.

Morfit of ValueAct has received strong support from CEO Nadella since being appointed, however, the source said it is unlikely that ValueAct will have any further board representation. ValueAct is one of Microsoft's largest hedge fund investors and the firm's investment came just ahead of dramatic change at the company.

CEO Nadella is pushing a mobile-first, cloud-first strategy that seeks to increasingly weave together Microsoft's most powerful products such as Office 365 and Azure. Hardware such as the Microsoft Surface tablet and the Windows Phone will be built to leverage the company's best software, analytic and cloud services, Nadella has said.

In a recent memo, Nadella also told employees at Microsoft to expect change to the company's culture. "Nothing is off the table in how we think about shifting our culture," Nadella said, citing evolving job responsibilities, new partnerships and the hiring of new employees.