Don’t take shareholder support for granted and keep discussions within the boardroom when faced with an activist or contested situationFive questions with Morrow Sodali’s Charlie Koons - IR Magazine, UK
Charles Koons, who recently joined Morrow Sodali as managing director of activism and contested situations advisory group, replied to IR Magazine's Garnet Roach questions on latest activism's trends.
To what extent are governance issues being considered in activist or contested situations today compared with three years ago? To what degree is governance being used simply as a vehicle to gain support for financially driven change?
More than ever, governance is a critical piece of any activist situation. While most shareholder activism will be focused on improving shareholder value, the activist landscape continues to be altered by the powerful voices of the large index funds regarding governance standards. These funds have taken a thought-leadership role on how a long-term and sustainable perspective should inform the board’s decisions.
Gender diversity in the boardroom will continue to be a prominent area of focus. The August 31 letter sent by Vanguard’s CEO Bill McNabb to directors of public companies sent a very clear message about expectations for board and governance structures, compensation and risk oversight. McNabb states: ‘When the board contributes the right mix of skill, expertise, thought, tenure and personal characteristics, sustainable economic value becomes much easier to achieve.’ Any campaign for shareholder support will have to pay close attention to the governance expectations of its shareholders.
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