Newswise — The Conference Board Governance Center convened a Working Group on Hedge Fund Activism which today released a set of proposed recommendations for public companies and institutional investors who might find themselves involved in an activism campaign mounted by hedge funds. The proposed recommendations are supported by a research report discussing the Working Group's findings.
The full set of findings and recommendations being released for public comment can be downloaded at http://www.conference-board.org/hedgefundactivism
The Conference Board Working Group recommends actions which can be taken voluntarily by corporations and investors. Due to the non-advocacy policy adopted by The Conference Board, no recommendations to legislative bodies or regulatory agencies were issued. The Working Group focused on the following major areas:
(1) What corporations can do to better monitor securities holdings and learn about those accumulations of stock or extraordinary trading patterns that may reveal a hedge fund's activism tactic. (2) What measures corporations can adopt to avoid becoming a target.(3) How boards and senior executives can react to an activism campaign and how they should respond to requests for change made by hedge funds.(4) How companies and large institutional investors can ensure integrity of the voting process in those situations where hedge funds borrow shares for the sole purpose of influencing a shareholders' vote.(5) What considerations institutional investors should be mindful of when allocating some of their assets to hedge funds pursuing activism strategies.
Any interested party is invited to comment on the preliminary report and proposed recommendation. The comment period will run until April 30, 2008. The Conference Board intends to review these comments and then issue a final report by June 2008. For further information and to submit any comments, please contact the author of the report, Matteo Tonello, at 212-339-0335 or [email protected]. All commentators will be acknowledged and will receive a hardcopy of the final report.
About The Conference Board Working Group on Hedge Fund ActivismThe Conference Board Governance Center, under the direction of Carolyn Kay Brancato, established the Working Group on Hedge Fund Activism in early 2007 to bring together major institutional investors, public companies at the forefront of corporate governance developments, financial service providers, legal experts and business associations. The Working Group is co-chaired by two noted corporate governance experts " Dr. Stephen Davis and Jon Lukomnik " and Senior Research Associate Matteo Tonello authored the report. The Working Group was formed during the height of a burgeoning hedge fund market; while that industry's activity has somewhat abated in the late 2007 and early 2008 market downturn and liquidity crunch, the major issues raised by hedge fund activism are expected to persist.
The full listing of Working Group members follows:
Alcoa, Inc.Donna C. Dabney, Corporate Secretary & Corporate Governance Counsel
The Altman GroupKen Altman, President
American Express CompanyCarol Schwartz, Senior Assistant Secretary
APCO WorldwideJeff Zelkowitz, Senior Vice President
Applebee's International, Inc.Carol DiRaimo, Vice President of Investor Relations
Barclays Global InvestorsAbe Friedman, Director of Corporate Governance
Bulldog InvestorsPhilip Goldstein, Founder
The Coca-Cola CompanyCarol Hayes, Vice President of Corporate Governance & Secretary
The Conference Board, Inc.Carolyn K. Brancato, Director, Governance CenterMatteo Tonello, Senior Research Associate, Governance Center
Dade Behring Holdings, Inc.Louise Pearson, Chief Compliance Officer
DLA PiperTed Altman, Partner
Florida State Board of AdministrationMichael McCauley, Director of Corporate GovernanceTracy Stewart, Senior Corporate Governance Analyst
Freddie MacLuise Welby, Associate General Counsel
Global Advisors, Inc.Stephen Davis, President
Icahn Associates CorporationKeith Schaitkin, Associate General Counsel
Infovest21Lois Peltz, President
RiskMetrics Group, Inc. (formerly Institutional Shareholder Services, Inc.)Patrick McGurn, Senior VP and Special Counsel
Jones DayRichard H. Koppes, Of Counsel
Managed Funds AssociationLisa S. McGreevy, Executive Vice President and COO
McGuire Woods, LLPRobert L. Burrus, Jr., Former Chairman and Partner
Moody's Investors ServiceFrancis H. Byrd, Former Vice President, Corporate Governance
National Investor Relations InstituteLinda Y. Kelleher, Executive Vice President
OneCapital Management Partners, LLCReid Bernstein, Chief Executive Officer
Pfizer, IncMargaret (Peggy) Foran, Vice President of Corporate Governance & SecretaryRosemary Kenney, Director, Corporate Governance
Sinclair CapitalJon Lukomnik, Managing Partner
Spencer StuartJulie H. Daum, Senior DirectorJulie Norris, Board Services Specialist
Standard & Poor'sDan Konigsburg, Director, Corporate Governance
TIAA-CREFJohn Wilcox, Former Senior VP and Head of Corporate Governance
Weil, Gotshal & Manges, LLPCatherine T. Dixon, PartnerHolly Gregory, Partner
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