Board Strategy & Optimization

Be your Own Activist

Beyond the responsibilities we assume that are directly related to a capital raise or strategic positioning mandate, we also use our experience, acumen and professional network to guide our clients on board strategy and optimization. In 2015, at age 42, Whelan was appointed to the board of NYSE: BLD on its initial public offering, and as such was one of the youngest non-executive NYSE directors.

We offer guidance on the optimal size and composition to achieve a value-add board of directors with seasoned committee chairs, and on the length of time it will take to do so. Our philosophy is to be your own activist. We position our clients to avoid the potential for unwelcome attention by focusing on establishing a strong board initially, employing a robust evaluation and education process, and committing to regular refreshment. The biggest challenge boards face today is that they are growing stale and entrenched, as age and term limits are too frequently waived, long serving directors are no longer considered independent by most shareholders.

Board Composition and Refreshment Are a Priority

Board composition is increasingly being scrutinized, as investors are demanding that directors be capable, skilled, active, engaged and diverse. As such, assembling a board that is committed and well regarded has never been more important. Seasoned independent directors add tremendous value by providing sage advice, and by sharing critical business and industry perspective. Through their presence on the board, they serve as ambassadors and endorse the company.

Activists Are Increasingly Well Received, and Gaining Board Seats

There has been a recent surge by activist investors in targeting companies they deem as underperforming. These investors typically focus on improving capital structure, operational and strategic results and governance matters, including replacing sitting directors. While activist campaigns are now common and accepted, the concerns they raise are also being addressed expeditiously, in part because of the quality of the director candidates they present.

In 2016 activists gained at least one board seat in 80% of their campaigns, the majority of which were achieved before a shareholder vote. We work with our clients to proactively identify and address potential weaknesses to reduce the likelihood of unwelcome attention. In the event that an activist is engaged, we facilitate dialogue between the two parties towards an expeditious resolution.

Great Directors Add Tremendous Value, and We Seek Them Out

When it comes to board effectiveness, the best offense is a good defense. The value add of a strong board extends far beyond keeping activists at bay. We are well connected with the most highly regarded industry executives. We direct our clients to identify the desired skills and core competencies, filling these roles with capable and diverse candidates, recruiting committee chairs that are skilled and collegial, establishing and delivering an effective onboarding program, and enforcing appropriate age and term limits to continuously refresh the board without causing disruption.