Shareholder Activism: Current Trends & Tactics
Join us on October 14 for a review and panel discussion of the current state of public company shareholder activism. A panel of some of the country’s leading advisors in shareholder activism will discuss the tactics being deployed by activists, responses by companies and preparations directors and officers should implement today. Directors and officers of public companies of all sizes will learn valuable lessons and better understand the current activist landscape.
SEC Charges Corporate Insiders with Late Beneficial Ownership Reporting
Last week, the SEC announced charges against 28 corporate insiders for violating requirements to promptly report their transactions and holdings in company securities on Form 4 and Schedules 13D and 13G. Six companies were also charged for contributing to their insiders' filing failures or failing to report their insiders’ filing delinquencies as required. The SEC noted that it used quantitative analytics to identify individuals and companies with high rates of filing deficiencies. According to the SEC, “Officers, directors, major shareholders, and issuers should all take note: inadvertence is no defense to filing violations, and we will vigorously police these sorts of violations through streamlined actions.”
Delaware Judge Blesses Forum Selection Bylaw Selecting North Carolina Law to Limit M&A Suits
Applying Boilermakers Local 154 Retirement Fund v. Chevron Corp., the Delaware Chancery Court recently enforced a Delaware company's forum selection bylaw selecting North Carolina as the exclusive forum for shareholder derivative litigation. The provision was adopted by First Citizens Bancshares on the same day it agreed to a corporate merger that potentially could trigger litigation. According to Chancellor Bouchard, “If Delaware corporations are to expect, after Chevron, that foreign courts will enforce valid bylaws that designate Delaware as the exclusive forum for intra-corporate disputes, then, as a matter of comity, so too should this Court enforce a Delaware corporation's bylaw that does not designate Delaware as the exclusive forum.”
Pension Funds Have "No Comment" on Proposed Inversion Deals
When it comes to the controversial deals, known as inversions, in which U.S. companies propose to reincorporate abroad to achieve tax advantages, one group of interested parties is taking a decidedly "no comment" position: large public pension funds. According to the New York Times, these investors "may be so meek on the issue of inversions because they are conflicted. On one side, the funds say they care about the long term and the implications for their state...yet most pension funds are underfunded and, frankly, desperate to show investment returns." High profile inversion deals include AbbVie’s proposed $54 billion acquisition of Shire and Burger King's announced talks to buy Tim Hortons.
Conflicts in the Boardroom
A board comprised of independent, thoughtful and outspoken directors is bound to disagree from time to time. However, discord among directors has the potential to affect adversely a board’s effectiveness. In an effort to explore what causes boardroom disputes and how best to resolve them, the Centre for Effective Dispute Resolution and the Corporate Governance Group of the International Finance Corporation surveyed 191 directors about their experience.
The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. It is published by Fredrikson & Byron’s Public Companies Group.