March 25, 2020

Activism: Preparing for the New Environment

Earlier this week, I blogged about the possible resurgence of poison pills in response to the unprecedented market volatility resulting from the Covid-19 pandemic. This Cooley blog provides recommendations about other actions companies should take to shore up their defenses against activist challenges in the new environment. This excerpt discusses the need to refresh the company’s strategic plan:

The future of virtually all issuers will be materially affected by the pandemic. As with enterprise risk assessment, now is the time for companies and boards to review their strategic plan as affected by these developments, assess opportunities and challenges facing the company and review the company’s expected financial performance, capital requirements and balance sheet. Management should also be prepared to regularly review with the board current responsive updates to its operating plan and discuss the strategic, technological, market or other contingencies that are addressed and anticipated.

Not only may these efforts enable your company to weather the storm in a healthier position, it will be important to consider how corporate strategy promotes the long-term success of the company and interests of stakeholders to effectively respond to activism or opportunistic takeover proposals should they arise.

Other areas addressed by the blog include board engagement, enterprise risk assessment, shareholder communication and takeover preparedness.

John Jenkins