The Conference Board Offers Shareholder Activism Resources

In more than 400 pages, The Shareholder Activism Report features sections on economic environment and new regulatory reforms. It also reviews every proxy campaign during 2009 and contains practical recommendations for understanding shareholders, assessing vulnerabilities to activism, and, when necessary, responding to requests for change, according to a press release.   

The accompanying portal is a live online database including a directory of more than 400 activist investors with extensive profiles of the top 50, and hundreds of sample documents such as director nomination proposals, shareholder letters, investor presentations, and settlement agreements. The portal is regularly updated with voting policies by influential investment groups and proxy advisory firms, published articles, and other documents and tools to help navigate the complexities of shareholder activism.

The project is supported by funding and knowledge input from the following firms—representing a variety of fields including legal, public relations, proxy solicitation and executive search—which have provided counsel on the majority of activist investing campaigns over the past few years: Debevoise & Plimpton LLP; Egon Zehnder International; Georgeson Inc.; Hedge Fund Solutions, LLC; Innisfree M&A Incorporated; Joele Frank; Wilkinson Brimmer Katcher; MacKenzie Partners, Inc.; Sard Verbinnen & Co; Sullivan & Cromwell LLP; and Wachtell, Lipton, Rosen & Katz.

“We produced this report in response to Governance Center members’ requests for education and guidance on addressing shareholder activism,” said Paul DeNicola, director of The Conference Board Governance Center and Directors’ Institute, in the press release. “It is the latest addition to the many resources the Center offers to help corporate directors and senior executives meet the highest standards of governance and risk oversight.”

According to The Shareholder Activism Report and Resource Portal, some 55% of activist demands in the first few months of the 2010 proxy season relate to corporate governance (such as board declassification, removal of poison pills, say-on-pay, or anti-gross up policies), while 26% concern strategic matters like influencing M&A transactions or pursuing alternative markets. Only 6% of demands aim to effect cash distributions or relate to other financial issues, down from 17% in 2009.

“Improved macroeconomic indicators and a robust rebound of the M&A environment are expected to fuel shareholder activism throughout 2010,” Matteo Tonello, director of corporate governance research at The Conference Board and co-author of the report with Damien Park, said in the announcement. He added that it has become more difficult for a company to justify the expense of a proxy fight.

“The stigma attached to shareholder activism is dissipating, while activists are becoming increasingly sophisticated at putting pressure on undervalued targets to make the corporate changes they believe will unlock hidden potential,” said Tonello. “Our report and portal provide extensive benchmarking data and practical instructions to help companies reduce their exposure to expensive proxy battles or litigation.”

To purchase The Shareholder Activism Report and access to the Resource Portal, contact Timothy Concannon at 212-339-0207 or timothy.concannon@conference-board.org.