Derek Zaba’s Post

View profile for Derek Zaba, graphic

Partner | Co-Chair, Shareholder Activism Practice | Sidley Austin LLP

Terrific session with Carl Bass about his various exeriences and perspectives on shareholder activism !!! Takeaways are below.

NACD Northern California's event, "𝗣𝗲𝗿𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲𝘀 𝗼𝗻 𝗦𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝗔𝗰𝘁𝗶𝘃𝗶𝘀𝗺: 𝗟𝗲𝘀𝘀𝗼𝗻𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗣𝗮𝘀𝘁 𝗮𝗻𝗱 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗙𝘂𝘁𝘂𝗿𝗲," featured an engaging discussion with Carl Bass and Derek Zaba. They shared valuable insights on lessons learned from previous activist campaigns and explored the latest trends shaping shareholder activism today. Key takeaways include: 💡 𝗖𝗮𝗹𝗺 𝗗𝗲𝗺𝗲𝗮𝗻𝗼𝗿: Activism can often raise emotions in the boardroom. It's important remain confident, calm, and build a consensus as to the appropriate course of action, whatever it may be. 💡 𝗦𝗲𝘁𝘁𝗹𝗲𝗺𝗲𝗻𝘁 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆: In most cases, it is advisable to settle issues early and effectively to minimize distraction from the business. However, this requires that the activist behave reasonably, which is not always the case. 💡 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝗔𝗰𝘁𝗶𝘃𝗶𝘀𝘁𝘀: Boards should be aware of the differences between an activist, actively managed institutional investors and index funds and their approach to their investments/time horizons. 💡 𝗦𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝗣𝗿𝗲𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀: Understanding the shareholder base is critical; different investors have different perspectives. Honest and transparent feedback before an activist arrives is crucial. 💡 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗖𝗼𝗺𝗽𝗮𝗿𝗶𝘀𝗼𝗻: Be aware of triggers that could attract activists, such as transformations in business models, and be extra prepared during these times. 💡 𝗦𝘁𝗿𝗼𝗻𝗴 𝗕𝗼𝗮𝗿𝗱 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽𝘀: Maintaining strong relationships among board members during stable times prepares them for when a crisis occurs. Preparation and good relations is key. 💡 𝗔𝘀𝗸𝗶𝗻𝗴 𝗧𝗼𝘂𝗴𝗵 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀: Boards should continuously challenge both themselves and the CEO with difficult questions - think like an activist. 💡 𝗟𝗶𝘀𝘁𝗲𝗻𝗶𝗻𝗴 𝘁𝗼 𝗖𝗿𝗶𝘁𝗶𝗰𝗶𝘀𝗺: Stay open-minded to criticism, regardless of the source (investors, former employees, analysts), and maintain a willingness to adjust opinions based on new information. Thank you to Sidley Austin LLP for hosting this program. #Shareholderactivism #activism #activists #nacd

  • No alternative text description for this image

Thank you so much for a meaningful session.

Like
Reply

To view or add a comment, sign in

Explore topics