logo1
Resources and Advisory Services
More Games, Strategy Committees Now Play
Earlier, we highlighted how Nominating Committees stall and frustrate investors (below).

This week, we see how other committees join in. The Activist Stocks newsletter analyzed the situation between activist investor Lone Star Value and portfolio company Dakota Plains Holdings.

In short, Dakota Plains convened a strategy committee in response to pressure from Lone Star. As Lone Star sets forth in a news release, Dakota Plains did not go in the direction that Lone Star had envisioned or intended.

Thanks to Activist Stocks for explaining this, and reiterating how investors need to monitor committees carefully.

Activist Stocks had us at "grin-f***ed", which we had not heard for a few years. It captures perfectly how some executives deal with investors.
Games Nominating Committees Play
We propose directors to companies frequently. Never has a BoD said, "
You're right! Your nominees' qualifications far exceed ours'. We'll add them immediately." Maybe we've asked the wrong way...

 

Instead, we typically deal with the Nominating Committee of the BoD, and see first-hand its shenanigans in thwarting activist investors. Earlier we profiled the usual BoD committees, and noted how the Nominating Committee oversees BoD composition. In our experience, Nominating Committees subvert the will and rights of shareholders by running a slanted job search, rather than a fair and reasonable BoD election. 

 

Nominating Committees claim to "seek the best-qualified directors", or some such nonsense. In our experience, they seek to achieve one or both of two goals: 

  • stall the process
  • frustrate nominees with onerous, gratuitous demands. 

In this way, the path to BoD membership takes so long that it stretches past deadlines for nominating and electing directors. And, no sane person who values his or her time and privacy will abide by the absurd requests and requirements.

 

We explain specifically how Nominating Committees play these games, and what investors can do about it, in a current blog post.

Recent TAI blog posts

 

Mandatory BoD Retirement or Say-on-Directors? (3/24/15) 

At GM, A Short-Lived Activist Project (3/12/15 email)

What's a Universal Proxy, and Why Does Nelson Peltz Care? (3/10/15) 

Corporate Governance, the Icahn Way (3/3/15)

Board Committees (2/24/15)

You can find other useful resources at the TAI website, including our research on "Effective Activism", our new resource guides on attorneys for activist investors and on activist investing data sourcesour white paper with the basics on activist investing, and our new guides on exempt solicitationconsent solicitation, and special shareholder meetings. 
For further information, please contact:
 
Michael R. Levin
[email protected]
847.830.1479