Shareholder activist campaigns have risen precipitously over the past few years, fueled by a robust M&A environment, increased economic pressure and a change in the investor base of most companies. Across the corporate and political spectrum, there are strong advocates both for and against activism. To that end, Spencer Stuart partnered with NYSE Governance Services and Evercore to better understand the issues and gain broader insight and perspective on the state of shareholder activism by surveying more than 300 directors of publicly traded U.S. companies.
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Key takeaways include:
- 84% of directors believe most activist shareholders do not represent the interests of all of a company’s shareholders, with 85% saying they are simply too focused on short-term performance.
- Almost two-thirds (63%) of directors surveyed say activism has had no effect on public company boards’ ability to attract quality members, and nearly half (47%) think directors who are nominated or placed on a board by an activist can remain independent.
- More than three-quarters (78%) of directors believe that activists who push for a change in strategy should be required to hold the company shares for one to three years subsequent to the implementation of that strategy.
- Almost all directors agree that if an activist places a director on a board, that director should never be allowed to take confidential information back to the fund, and the fund should be subject to the same restrictions on pledging and hedging.
- A majority (63%) of directors say it’s a good idea to designate a committee or certain individuals to interact with large shareholders.