Board Composition and Shareholder Activism: Perspective from PwC
In a significant shift, institutional investors are increasingly emphasising the importance of board composition, according to a recent article published by PwC. This change represents an increase from 31% in 2012, signifying a growing concern for board diversity, independence, and expertise.
Shareholders are paying particular attention to these aspects, with companies like ExxonMobil, Procter & Gamble, and Tesla facing shareholder activism in recent years. Critics are questioning the age, tenure, and diversity of board members, and the threat of a shareholder activist campaign looms for many companies and boards.
The push for change could potentially impact proxy voting decisions, as institutional investors increasingly advocate for improvements in board composition. Some are even filing shareholder proposals for proxy access to nominate their own director candidates.
Activist investors often have the goal of seeking board seats at investee companies. They may target directors with long tenures or lacking deep industry knowledge, exploiting perceived governance weaknesses to gain support from other institutional investors.
However, boards can proactively address this pressure by conducting robust board assessments and implementing smart succession planning. By doing so, they can ensure that their composition aligns with the expectations of their shareholders and the broader investment community.
In the face of this increased scrutiny, it is clear that boards must take a proactive approach to ensure their composition meets the highest standards of diversity, independence, and expertise. This will not only help them to weather the threat of shareholder activism but also to thrive in today's dynamic business environment.
Read also:
- chaos unveiled on Clowning Street: week 63's antics from 'Two-Tier Keir' and his chaotic Labour Circus
- Skechers Debuts First American Stores Focused on Athletic Footwear Performance
- Racing ahead in Renewable Energy Dominance: Changzhou, Jiangsu Pushes for Worldwide Renewable Energy Ascendancy
- Funds Amounting to Over Two Hundred Million Rupees Collected on Impact Guru to Aid Punjab's Flood Victims in Reconstructing Their Homes
