I was talking to Cooley’s Beth Sasfai about this webcast for which she’s a speaker this Thursday – “New Rules of Engagement: Boards, Activists & Off-Season Tactics” – and she told me these are the type of pointers she will be digging into during the program:
1. Audit Vulnerabilities Before They Do – Conduct a periodic “activist defense audit” to assess underperformance triggers, structural weaknesses (like staggered boards or low voting thresholds), and past votes against management. Fix what you can before it’s weaponized.
This including knowing your bylaws – and fortifying them – by reviewing and updating your corporate bylaws regularly to ensure they’re clear on advance notice provisions, director qualifications, and procedural guardrails. Tidy up any ambiguity that could be exploited in a proxy contest or consent solicitation.
2. Build a Board Built to Last – Proactively refresh or rotate directors where needed. Recruit directors with credibility and diversity of expertise – particularly those with capital markets, M&A, or activist experience – and communicate how this adds to board effectiveness in your proxy statement. A seasoned board that can stand its ground publicly is a powerful defense against activist narratives.
3. Enhance Transparency on Board Oversight – Disclose meaningful, investor-relevant information – not just boilerplate – to make leadership oversight tangible and forward-looking. Use your proxy statement to effectively convey how the board oversees key areas of risk oversight such as strategy and capital allocation, succession planning, cybersecurity, and human capital issues.
4. Monitor Your Shareholder Base and Voting Behavior Proactively – Watch for changes. Engage with top holders regularly to understand their priorities and concerns—and build trust long before an activist shows up with a plan. Include your lead independent director or committee chairs where appropriate and train them up if needed.
5. Train for the Tactical Response – Develop and rehearse an internal rapid response playbook. This should include key messages, board communication protocols, and a war room contact tree. When the activist comes knocking, you want to be coordinated, calm, and legally buttoned-up. Don’t wait for a crisis!
Authored by
Broc Romanek