Senior executives and board directors are getting used to the increased level of communication with—and scrutiny from—large investors. But, how many are really prepared for what shareholder activists plan to pursue this year and beyond? Probably very few.
Well-known corporate governance advisers like Martin Lipton of the law firm Wachtell, Lipton, Rosen & Katz expect public and union pension funds and other activists to step up requests in 2011 to meet with non-executive board members over issues of executive compensation, corporate performance, governance, and director nominations. Governance experts are advising companies not to wait around for activist investors to come knocking. Instead, make a preemptive strike by reaching out to them first.
