Dec 18, 2012

'Operational’ Activism Hits the Boardroom

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John Madden, who advises clients out of the firm’s Paris and New York offices, has published an article, "’Operational’ Activism Hits the Boardroom," in the Fourth Quarter 2012 issue of Directors & Boards magazine. The article examines what Madden calls “a potentially fundamental shift in the balance of authority, or influence, between boards of directors and shareholders in the corporate decision-making process, moving further away from the longstanding board primacy model of corporate governance.” In his view, “operational activism” is on the rise, with shareholders increasingly pressuring boards not only on classic governance subjects but also on the actual strategic direction or management of the business. In the article, Madden goes on to identify three categories of this strategic/operational activism: pressing for corporate break-up/restructuring or operational change, forcing the sale of a company, and opposing announced deals. In the end, he says, “Boards need to be prepared to address activism, when it arises, as effectively as possible. More importantly, boards should think proactively about steps they can take to avoid becoming subject to activist interest in the first place.”

View full article, "‘Operational’ Activism Hits the Boardroom"

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John Madden

Of Counsel

Mergers & Acquisitions

+1 212 848 7055

+1 212 848 7055

New York