Volume 11, Number 1 •
A New Golden Age
For activists, yes — but for directors, too.
By Jim Kristie
investing has entered a new golden age,” trumpeted
Barron’s in its November 30,
2013 issue [click here].
Activists did reap a lot of gold last year, certainly if you count
board seats. As reported in the
Financial Times in a late-December article titled “Activist
Hedge Fund Managers Get Board Welcome” [click
ISS has calculated that 68% of proxy fights for board representatives
resulted in success for activists in 2013 — “and that does not include
cases where the agitators were invited on to the board before
launching a fight.”
And activists sure reaped a lot of media coverage last year. I have
not seen any studies on this, but if some intrepid researcher were to
measure column linage devoted to shareholder activists, I would bet
2013 was a banner year for activism as a newsprint-hogging subject.
Two of my touchstones in this regard:
• Again from the FT, a Dec. 12
article that reports that “The heads of some of America’s largest
companies are preoccupied by an unusual question: what would Carl
• And the Wall Street Journal,
in a Dec. 10 article headlined “Companies, Activists Declare Truce in
Boardroom Battles,” states that “Activist investors are increasingly
encountering an unusual reception when approaching corporate targets:
an open door.”
This sounds golden agey to me, at least for the activists and
potentially their investors.
But let’s spin this on its head and suggest that we have the makings
of a new golden age for board members, too. Smart, savvy and strong
directors — the three S’s — will be valued more than ever as they help
navigate their companies in an era roiled by investor activism.
To this point, I am reminded of something Jeffrey Sonnenfeld said at a
Yale CEO Summit about 10 years ago. (Quick plug: These summits, which
Jeff runs as founder of the Yale
School of Management Chief Executive Leadership Institute, are one
of the most stimulating gatherings of top executives; I have just
returned from the most recent summit held last month at New York’s
Waldorf-Astoria.) Jeff shared with those of us who participated in
that decade-ago summit — many of whom were leaders still working
through the devastating dot-com collapse — what he called an old
Jewish saying: “I ask not for a lighter burden, I ask for broader
The burden is not going to get lighter for directors in 2014 —
activists will see to that. So let’s add a fourth S — broader
shoulders — to the qualities that distinguish valued directors. If
management and the board have a bevy of 4S directors, great. If not,
it better get them, so that the new golden age is enjoyed by all, not
just the activists.
As always, I welcome your comments at
Kristie is the editor and associate publisher of
Directors & Boards.
Copyright © 2014 Directors & Boards, 1845
Walnut Street, Suite 900, Philadelphia, PA 191036.