What to do when confronted with an activist investor is arguably one of the biggest issues a board will face. Dialogue is striking up more frequently as companies shun the practices and attitudes of previous eras, when companies rarely engaged with activists and seldom included directors in the meetings.
Because today’s shareholders expect more direct engagement with corporate boards, boards need to learn how to communicate with shareholders. Investors are laser focused on issues that impact shareholder value.They want to know that the board has the right skills in place to ensure that the interests of the investors and the company are aligned for the long-term sustainability of the company. From climate change and sustainability to human capital management, diversity, and executive compensation, how prepared is your board to engage and respond to investors?
How does your board deal with irate investors?
How can your board prepare for this situation?
What should your board do, or maybe more importantly what shouldn't you do?
When is the right time to engage and who should be involved?
What are the most important points to highlight during an engagement discussion?
How can your board improve engagement and communication with investors?
Is your governance house in order?
Marc Hodak: Partner, Farient Advisors
Jim Hance: Director, The Carlyle Group, Acuity Brands Inc.
Virginia Rhodes: Lead Executive Compensation Consultant, Meridian Compensation Partners
Mary Winston: CEO (Interim), Bed Bath & Beyond; Director, Bed Bath & Beyond, Domtar Corp., Dover Corp., Acuity Brands Inc.
Mr. Hodak is a Partner at Farient Advisors. He has over 20 years of experience advising senior management, boards of directors, and investors, in both public and private companies, on management compensation. He is a recognized thought leader in incentive plan design, and has been published in numerous magazines including Forbes, Directorship, as well as in academic journals. He been quoted in the national press, including the Wall Street Journal, Bloomberg, and Reuters, and is a sought after speaker at forums and conferences throughout the U.S. and Europe on compensation and governance. His experience extends across multiple industries including consumer products, manufacturing, media and entertainment, energy, financial services, real estate, technology, telecommunications and transportation. Mr. Hodak has taught corporate governance as a Professor at NYU’s Stern School and as visiting lecturer at the University of St. Gallen in Switzerland.
James Hance is an operating executive of The Carlyle Group LP, focused on the global market strategies segment and the financial services sector in New York. He also serves on the board of directors.
Prior to joining Carlyle in 2005, Mr. Hance served as vice chairman of Bank of America from 1993 until his retirement on January 31, 2005, and served as chief financial officer from 1988 to 2004. Prior to joining Bank of America, Mr. Hance spent 17 years with Price Waterhouse (now PriceWaterhouseCoopers LLP).
He is also a director of Acuity Brands, Inc. and is a former director of Ford Motor Company, Parkway Properties, Duke Energy Corporation, Sprint-Nextel Corporation, Rayonier, Inc., EnPro Industries, Morgan Stanley, Cousins Properties, Inc., and Bank of America Corporation.
Virginia Rhodes has over 20 years of executive compensation consulting experience. She consults in all areas of executive and board of director compensation, including incentive program design, pay benchmarking, pay-for-performance analyses, governance best practices, change-in-control and severance agreements, tally sheets, total compensation statements and proxy drafting.
Virginia’s clients include large companies in diverse industries including paper and packaging, consumer products, food and beverage, media, tobacco and transportation. Her client relationships are primarily at the Compensation Committee level but involve regular interaction with company management.
Virginia has been a speaker at the NACD’s Leading Minds of Compensation, Equilar Webinars and G100 Talent Consortium. She has written articles for C-SUITE Insight Magazine and CEO Pay Trends (an Equilar publication).
Prior to joining Meridian, Virginia spent six years with Hewitt Associates and six years with Towers Perrin (now Willis Towers Watson), specializing in executive compensation consulting.
Virginia received her B.S. in Business Administration from University of North Carolina – Chapel Hill and her M.B.A. from Kenan Flagler Business School at the University of North Carolina – Chapel Hill.
Mary A. Winston is an experienced financial executive and corporate board member who served as chief financial officer at three large industry-leading corporations, across multiple industries. She has leveraged her extensive financial experience to bring value to the corporate boardroom. Winston has years of experience serving as an SEC financial expert on public company boards and audit committees, where she brings her financial, business, and corporate governance knowledge to benefit public companies.
She currently serves on four large public company boards. She serves on the Finance and Compensation Committees and formerly on the Audit Committee for Dover Corporation (NYSE: DOV), a global diversified manufacturer of industrial products with approximately $8 billion in revenues and market cap over $13 billion; the Audit and Finance Committees for Domtar Corporation (NYSE: UFS), a manufacturer of paper, pulp, and fiber-based consumer products with over $5 billion in revenue; the Audit and Compensation Committees for Supervalu Inc. (NYSE: SVU), a grocery retailer and wholesaler with approximately $17 billion in revenue; and on the Governance and Compensation Committees for Acuity Brands Inc. (NYSE: AYI), a manufacturer of lighting and energy management technology solutions with approximately $4 billion in revenue. Winston also serves as chair of the board and president of the NACD Carolinas Chapter. She is a member of the board of The Bechtler Museum of Modern Art and has also served on a number of other nonprofit and philanthropic boards.
Before focusing primarily on corporate governance and board work, Winston served in three EVP and chief financial officer roles, including at Family Dollar Stores Inc., a leading discount retailer with almost $11 billion in revenue and 8,500 retail stores; Giant Eagle Inc., a leading grocery and fuel retailer with almost $11 billion in revenue; and Scholastic Corp., a global leader in publishing, education, and media. At these companies, Winston applied her broad financial responsibility and her experience managing strategy, M&A, investor relations, procurement, and communications functions; leading major cost-reduction programs; and implementing strong internal control and corporate governance programs. She was a valued strategic advisor to the CEOs, executive committees, and board of directors. She has also held executive-level positions with Visteon Corporation and Pfizer Inc. She started her career in public accounting with Arthur Andersen & Co.
Among several honors, Winston was named one of the Most Influential Black Corporate Directors, the Most Powerful Women in Business, and the Most Influential People in