Commentary: 3 Lessons From Bill Ackman's Failed ADP Proxy Fight
Most companies facing an activist onslaught see two choices: outright opposition or capitulation, states Fortune (Nov. 7, Guarino). Korn Ferry, which has studied best practices in board governance, suggests directors go on the offensive early -- before activists are at the gate -- and determine what makes the company vulnerable. A National Association of Corporate Directors survey found that 20 percent of respondents were approached by activists during the previous year, but 46 percent of those polled had no plan in place to respond to the challenges. Ideally, directors need to examine the right issues, such as the company's weaknesses and how it measures up in its performance using measures used by activists, such as return on invested capital. Former Rohm and Haas CEO Raj Gupta urges directors to evaluate the complexity of the company's portfolio, the quality of its management, and its cost structures and strategies.
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