DealLawyers.com Blog

Spencer Stuart recently surveyed more than 360 directors to understand how boards prepare for and respond to activist campaigns — plus how individual directors assess and engage with activist slates. Here are some highlights:

– A majority of respondents (53%) have served on a board approached by an activist investor, a figure that rises to 65% among public company directors.

– When faced with an activist, 91% of public directors said their board engaged with the investor. A striking 44% said they added directors identified by the activist, and 40% reached a settlement.

– Nearly two-thirds (65%) of public directors view their boards as prepared for activist situations. To prepare for activist campaigns, 63% of public directors said they identified advisers and 62% enhanced shareholder engagement practices.

– 44% of public company directors would consider joining a slate . . . [J]ust 20% of public and private company directors were contacted to join an activist’s slate. Of that 20%, fewer than one in four (18%) ultimately joined the company’s board.

– What company-specific factors would influence a director’s decision to join an investor slate? Number one was belief in the activist’s strategy for the company (91%), followed by the opportunity to drive meaningful change (81%). Public company directors expressed significantly higher concerns about reputation (60%) than private company directors (43%).

– Meredith Ervine