November 13, 2014

Survey: 33% of Boards Met With Activist Shareholder In Past Year

According to this PwC survey, nearly one-in-three directors say their board has interacted with an activist shareholder (and held extensive board discussions about activism) during the last 12 months – here are other notables:

– Additional 14% of boards have not had activist interactions but have extensively discussed this topic.
– Mega-cap company boards are twice as likely to interact with activists as small-cap company boards.
– 62% want at least some additional boardroom time and focus, and almost one in five want much more time and focus.
– 65% and 46% of directors are at least somewhat concerned with these CEO/median employee pay ratio disclosure and shareholder proposals for proxy access, respectively.
– Directors strongly prefer internal CEO candidates, but only 27% have much confidence in their company’s CEO talent pipeline. And nearly one in five believe their company’s CEO talent pipeline is not adequate.
– Especially over the past year, much of this pressure has emerged from the shareholder activist community
– Self-evaluation has yielded conflicting results. 91% believe their self-evaluation processes are at least somewhat effective while 70% say it is at least somewhat difficult to be frank in their self-evaluations. Further, almost two-thirds of directors believe self-evaluations are at least somewhat a “check the box” exercise.