The Shareholder Forum™
The Shareholder Forum provides all decision-makers – from the
ultimate owners of capital to the corporate managers who use their
capital, and all of the professionals in between – with reliably
effective access to the information and views participants consider
relevant to their respective responsibilities for the common objective
of using capital to produce goods and services.
To provide the required investor access without regulatory constraints,
the Forum developed policies and practices allowing it to function as an
SEC-defined independent moderator. We also adopted well-established
publishing standards to assure essential participant privacy and
These carefully defined and thoroughly tested
Forum policies are the foundation of our unique marketplace resource
for clearly fair access to information and exchanges of views.
We have been doing this for more than two decades. The Forum programs
were initiated in 1999 by the CFA
Society New York (at the time known as the New York Society of
Security Analysts) with lead investor and former corporate investment
Gary Lutin as guest chairman to address the professional interests
of the Society’s members.
Independently supported by Mr. Lutin since 2001, the Forum’s public
programs – often in collaboration with the CFA Society as well as with
other educational institutions such as the Columbia Schools of Business
and Journalism, the Yale School of Management and The Conference Board –
have achieved wide recognition for their effective definition of both
company-specific and marketplace issues, followed by an orderly exchange
of the information and views needed to resolve them.
The Forum's ability to convene all key decision-making constituencies
and influence leaders has been applied to subjects ranging from
corporate control contests
to the establishment of consensus marketplace
standards for fair disclosure,
and has been relied upon by virtually every major U.S. fund manager and
the many other investors who have participated in programs that
addressed their interests.
The Forum welcomes suggestions for its continuing support of fair access
to the information needed by both shareholders and corporate managers.
Responding to the recent increases in investor engagement and activism,
we have established a strong policy commitment to supporting corporate
managers who wish to provide the leadership expected of them by assuring
orderly reviews of issues. We will of course also continue to welcome
the initiation of company-specific programs by shareholders concerned
with the use of their capital to produce goods and services, and we
naturally remain committed to addressing general marketplace interests
in collaboration with educational institutions and publishers.
Replacing Unresponsive Directors
The foundations of current
"shareholder activism" were established by Forum participants to allow the
initiation of needed corporate changes by a shareholder providing
responsible leadership to win the support of other shareholders, as an
alternative to traditional reliance upon advocacy of change based on a
single shareholder's ability and willingness to assemble its own
compelling voting block.
The 2001 Forum programs summarized
below established the processes by which a shareholder with only nominal
holdings could engage in regulatory-compliant communications with other
shareholders to develop shared understandings of objectives as well as a
path to achieving them.
These essential principles were
demonstrated again in 2020 with adaptations to current communication
technologies and the growing significance of "retail" investor decisions.
The leadership of initiating research clearly defined what would be
relevant to the decisions of various shareholder constituencies,
supporting the development of a shareholder coalition to replace the
Results of HC2 Holdings
Two cases were selected in 2001 to demonstrate the processes by which
investors, acting independently in a common interest, could replace
directors who were unresponsive to shareholder concerns:
Lone Star Steakhouse
successes of independent investor efforts in both cases established the
feasibility of value enhancement practices in the current marketplace.
and selected records of both Forum programs are presented below.
History: Lone Star Steakhouse & Saloon, Inc. (“STAR”)
Responding to widely reported shareholder
dissatisfaction with the company’s management, an analyst with a
$40,000 budget and an interest in starting a new career as an
activist fund manager nominated himself for the board seat of Lone
Star’s founder CEO.
The Forum program was initiated in June 2001 to
address investor concerns about management’s use of litigation and
other tactics to stop the dissident’s campaign. The stated purpose
of the Forum
was to support shareholder rights to make informed decisions about
the alternative board candidates, without endorsing either one.
provided investors with a free and open exchange of information,
unconstrained by management litigation and without conventional
proxy contest expenditures. At the July 2001 annual meeting, the founder
CEO lost his board seat with 56% of the votes cast in favor of the
Selected records (listed chronologically):
Report: Requested Board Report of Responsibility for Litigation (June 15,
Report: Protecting Fair Markets (June 18, 2001)
Report: Requested Board Attention to Shareholder Concerns (June 18, 2001)
includes copy of June 18, 2001 letter
from Cornish F. Hitchcock, attorney for Amalgamated Bank Longview MidCap 400
Index Fund, to the members of the board of Lone Star Steakhouse and Saloon,
Report: Court Rejects Obstruction (June 23, 2001)
The New York Times, June 24, 2001: "Market Watch: An All-He-Can Eat
Feast at a Steakhouse Chain"
Corporate Governance Highlights, June 29, 2001: "Two of the Summer’s
Hottest Proxy Fights Continue to Sizzle"
Proxy Monitor, June 29, 2001 recommendations for client voting at 7/6/01
annual meeting of Lone Star Steakhouse & Saloon
California Public Employees Retirement System ("CalPERS"), July 1, 2001 report
of voting decisions for 7/6/01 annual meeting of Lone Star Steakhouse & Saloon
The Kansas City Star, July
2, 2001: "Lone Star Steakhouse stockholder shoots for board seat"
Report: Issues to Be Addressed (July 5, 2001)
The Wichita Eagle, July 7, 2001: "Coulter likely off the board at Lone
Report & Request for Shareholder Views (July 9, 2001)
Corporate Governance Highlights, July 13, 2001: "Dark Horse Candidate
Forum Report: Shareholder Views - Priorities
for Negotiations (July 18, 2001)
* See also
New York Times, July 20, 2001, "Analysts'
Group Halts Forums on Companies"
Willamette Industries, Inc. (“WLL”)
A Forum program was
initiated in May 2001 to address increasing investor concerns about
Willamette management’s personal biases in refusing to reasonably
consider a proposed business combination with Weyerhaeuser.
Weyerhaeuser slate of director candidates won a close contest for the third of Willamette’s
classified board seats that was up for election at the June 2001
annual meeting. Management nevertheless continued to refuse
explorations with Weyerhaeuser until mid-December 2001, when
Willamette announced it was negotiating a strategic asset
transaction that would block the proposed Weyerhaeuser combination.
Two Forum participants
responded to management’s continued obstructive tactics with
litigation. Another stated its intent to nominate director
candidates for the next annual meeting, so that shareholders would
be assured the opportunity to elect dissidents to another third of
the board and thus secure a majority even if Weyerhaeuser abandoned
Within weeks of the
independent shareholder actions, in January 2002, Willamette
management capitulated and agreed to a Weyerhaeuser combination that
allowed Willamette shareholders to realize the $6.1 billion value of
Selected records (listed chronologically):
Report: Letter Inviting Willamette Cooperation with Shareholder Forum (May
Financial Times, May 15, 2001: "Adviser asked to step into paper
Report: Letter to Willamette CEO Following Meetings (May 17, 2001)
Report: Focus of Forum Attention, Addressing Diverse Shareholder Interests
(May 21, 2001)
Report: Proposal for Immediate Initiation of Cooperative Negotiations (May
(includes May 29, 2001 Wall Street
Journal, "Warring Willamette, Weyerhaeuser Wrangle Over Rooms at Museum")
Report: May 29, 2001 Letter Proposing Negotiation in $55-60/share Range
(May 30, 2001)
Report: Willamette and Weyerhaeuser Chairmen's Responses to May 29 Letter
(June 5, 2001)
Financial Times, June 8, 2001: "Weyerhaeuser smells victory at
Report: Situation Analysis, Prospects for Value Enhancement (July 4, 2001)
Report: Opportunity for Value Enhancement (December 19, 2001)
(includes Wall Street Journal,
December 19, 2001, "Willamette Board Agrees to Explore Weyerhaeuser Offer,
Financial Times, January 5, 2002: "Weyerhaeuser snubbed again in
Financial Times, January 14, 2002: "Lex: Willamette"
Financial Times, January 22, 2002: "Willamette accepts rival's Dollars