Don't Be a 'Sitting Duck'–Advice on Avoiding Activist Shareholders

Poor financial returns, low stock price, a board that hasn’t changed for over a
decade—these are some of the board characteristics that attract activist
investors. To make the case for board change, the activists will attempt to
draw a correlation between poor financial and operating performance with poor
oversight as a way to blame the board.

In a Blank Rome LLP webinar, partner Keith Gottfried warned participants not to be
that board. Conduct your own evaluation of the board’s vulnerabilities: Has the
board failed to hold management accountable? Is the compensation excessive?
Does the board lack sufficient industry experience? Has the board explained how each director is qualified?  Is the board lacking in diversity? Is the board sufficiently independent?  Is there a perception that the board is not “fully engaged”?

Paul Schulman of MacKenzie Partners and Chris Cernich of ISS also participated in the webinar.

Shareholders are now part of the governance dialogue.  Not only must the board carry out its duty of care to represent all shareholders, but they must convey in
board structure and leadership how the board governs.  The webinar together with the presentation is posted on the Blank Rome website.