In the once cut-and-dry world of proxy statements, colorful communication matters more than ever before.
With shareholder activism still on the rise, and institutional investors like BlackRock and State Street, and collectives like the Investor Stewardship Group, sharpening their focus on corporate governance issues, the tick-the-box approach to proxy statements is quickly becoming a thing of the past. Many companies are moving beyond the traditional black & white “legalese,” paragraph-heavy proxy statement and taking a more innovative, communications-focused approach to improve transparency, defend against activism, and better engage with shareholders.
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Board Communications,
Proxy Season,
Shareholder Communications,
proxy,
proxy design
The new reality is that no public company, no matter how highly regarded or well managed, is immune from activist attention. The number of activist campaigns waged against public companies increased in 2015 to 375 according to the research firm FactSet.
Once an activist surfaces, every move a company makes can have a profound and cascading effect on its long-term viability. Therefore, it is essential to craft response plans before any sign of danger emerges.
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Targeting,
Wall Street,
Shareholder Activism,
Investor Meetings,
Buy-Side,
Proxy Season,
Proxy Fight,
Crisis Communications,
STREETSCOPE,
IRO,
CFO
By Maureen Wolff, President and Partner, Sharon Merrill Associates
For many companies, a looming activist shareholder is no longer the exception – it’s the rule. Activist shareholders had launched 495 campaigns targeting U.S. companies through November 2016, according to FactSet SharkRepellent. And as of the end of November, the number of proxy fights for board seats was at its highest level since 2009, at 101 contests.
The threat of activist investors encircling your company can be intimidating - unless you understand how to engage, respond and communicate. Here are 10 strategies to help you prepare.
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Board Communications,
Shareholder Activism,
Proxy Season,
Proxy Access,
Board Structure,
NIRI,
Shareholder Communications,
Investor Relations,
Activist Investors
By Dennis Walsh, Senior Consultant & Director of Social Media
Last week, I attended the NIRI Annual Conference. It was very educational and an incredible opportunity to meet and exchange ideas with many of the approximately 1,300 investor relations professionals from more than 20 countries that attended the event in Seattle.
NIRI organized more than 45 informative panel sessions and workshops that were led by some of IR’s top influencers. While I wanted to attend each one, unfortunately I am not omnipresent. For those that I did attend, I left with several key takeaways that can benefit any IR program and wanted to share those with you here at The Podium.
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Investor Presentation,
IR Program Planning,
Board Packages,
Shareholder Surveillance,
Disclosure,
Targeting,
Board Communications,
Annual Meeting,
Corporate Governance,
Shareholder Activism,
SEC,
Proxy Season,
Board of Directors,
Proxy Access,
NIRI,
Disclosure Policy,
IRO,
CFO,
Social Media,
Investor Relations,
Activist Investors
By Maureen Wolff, President and Partner
Nothing has more power to change a boardroom’s dynamics than the election of dissident directors – especially when they arrive as a twosome. I had the honor of moderating a panel discussion on shareholder activism at the National Association of Corporate Directors New England Chapter breakfast event earlier this month, where seasoned board members talked about the lessons they’ve learned in battling high-profile proxy contests over the years.
One of the stories, told by a former board chairman, involved the legendary corporate raider Carl Icahn. A manufacturing glitch had resulted in a steep drop in his company’s share price. After repeated attempts, Icahn was finally successful in having two of his nominees elected to the board. This occurred not long after the principal of another activist institution had been elected as a director, and not long before the company received an unsolicited tender offer at a substantial premium to the then-current share price.
The former chairman painstakingly recreated the scenarios that unfolded over the next few months as the board considered the takeover offer. At first, he focused on the gulf in interests and motivations between the newly elected “directors” and long-time members of the board. Unlike the established directors, who had long been personally committed to the company’s vision, mission and business strategy, the dissidents’ only interest was in immediately monetizing the company’s value for shareholders, he said. Predictably, these conflicting goals led to tremendous stress and friction on the board.
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Shareholder Meeting,
Shareholder Activism,
Proxy Season,
Proxy Access,
Crisis Communications,
Board Structure,
Shareholder Communications,
Investor Relations,
Activist Investors
When it comes to corporate governance, board members and shareholder activists are usually on opposite ends of the spectrum. But at separate conferences in New York and Boston this month, the two camps expressed a surprisingly similar view about the most effective way to deal with the anticipated increase in shareholder activism in 2011: better communication.
According to a study by law firm Schulte Roth & Zabel (SRZ), 76% of activists surveyed identified “dialogue/negotiations with management” as the most effective activist strategy to achieve desired results. None of the other proposed strategies – shareholder resolutions, publicity campaigns, proxy contests or litigation – received more than 16% of the vote.
Results of the study were highlighted at SRZ’s Shareholder Activism Conference in New York, which I attended as part of an invited group comprised mainly of hedge fund and private equity fund managers.
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Shareholder Meeting,
Board Communications,
Shareholder Activism,
Proxy Season,
Proxy Access,
Crisis Communications,
Shareholder Communications,
Investor Relations,
Activist Investors
Hello again. We took a bit of a hiatus from blogging this summer, but we are now back to share a Halloween story sure to scare you straight!
Unless you are one of the 33 Chilean miners that were trapped underground for the past two months, you have likely been watching the drama unfold on Capitol Hill as the Business Roundtable and the U.S. Chamber of Commerce challenged the legality of the SEC’s new proxy access rule 14a-11, which allows qualifying shareholders to nominate directors for election at shareholder meetings and requires the corporation to include those nominees in the standard proxy statement. The petitioners claim that the new rules are subjective and violate federal and state law and the United States Constitution, and that the SEC did not assess the effect of the rules on efficiency, competition and capital formation. As a result, implementation of the rule has been delayed pending a resolution of the Court of Appeals. So the new proxy access rules will most likely not be implemented until the 2012 proxy season, at the earliest. Upon hearing this news, public corporations across the nation let out a collective sigh of relief.
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Shareholder Meeting,
Board Communications,
Strategic Messaging,
Annual Meeting,
Shareholder Activism,
Investor Relations Agency,
Proxy Season,
Proxy Access,
Crisis Communications,
Board Structure,
Shareholder Communications,
Investor Relations,
Investor Relations Firm,
Activist Investors
The term “shareholder activism” can sometimes send a shiver down your spine and conjure up all kinds of unwelcome events – unhappy shareholders, proxy contests, shareholder proposals, 13D filings and withhold vote campaigns, to name just a few.
I recently moderated a NIRI Virtual Chapter webinar on “Shareholder Activism Trends.” The participants, consisting mainly of IROs at mid- and small-cap companies, were polled on several questions. The first question was, “Do you have a detailed plan in place for dealing with shareholder activism?” The majority answered “no.”
It may not be feasible to have a detailed plan for dealing with a threat that can take so many different forms. The lawmen and bandits who fought it out at the infamous O.K. Corral in 1881 had no idea how the showdown would play out – and neither will you if your company becomes an activist’s target. But that doesn’t mean you can’t be prepared. Here are four steps.
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Corporate Access,
Shareholder Meeting,
Board Communications,
Annual Meeting,
Shareholder Activism,
Proxy Season,
Proxy Fight,
Proxy Access,
Crisis Communications,
Board Structure,
Disclosure Policy,
Shareholder Communications,
Investor Relations,
Activist Investors
With proxy season on the horizon, a new SEC rule will be requiring companies to justify the structure of the board’s leadership. That could have some companies thinking about whether the roles of chairman and CEO should be separated – an issue that’s been hotly contested for years.
Proponents of taking an axe to the two positions contend that combining them puts too much power in the hands of one person and creates an inherent conflict of interest. Their preference is to seat an outside director as chairman to ensure the board stays truly independent from management. The CEO can then focus on running the business while the chairman is tasked with protecting the interests of shareholders, including evaluating management’s performance.
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Shareholder Meeting,
Annual Meeting,
SEC,
Proxy Season,
Board of Directors,
Crisis Communications,
Board Structure,
Investor Relations,
Activist Investors
