How to avoid activists new guidance from The Conference Board

The Conference Board Governance Center has got together with Damien Park of Hedge Fund Solutions to produce guidance and a checklist of issues for boards to  consider in their relations with shareholders. In particular the report is focused on  how to avoid “costly and disruptive confrontations” with activist funds.

The report argues that boards are well served by taking a proactively stance, properly understanding shareholder intentions and correcting potential vulnerabilities so as to avoid becoming the target of activists. Several current examples  of current activism programmes as well as a detailed table of cases from the 2009 proxy season are included.

Matteo Tonello, associate director at the Conference Board notes that the changes in the economic climate have had a fundamental impact on the approach taken by activists. “It has become extremely difficult for an activist investor to make the argument that cash should go to shareholders rather than being retained to support and finance the company during these difficult times,’ says Tonello, ‘we’ve seen activists changing their approach to focus much more on strategic, organizational and governance issues.’

For more information or to receive a copy of the report, contact Matteo Tonello at +1 212 339 0335 or matteo.tonello@conference-board.org.

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