With shareholder activism up, robust IR more valuable in proxy wars, says panel

MIAMI: Shareholder activism is increasing the need for financial communications professionals to serve as advisers beyond investment, M&A, and legal issues, said Michael Fox, president of the corporate communications group at ICR.

MIAMI: Shareholder activism is increasing the need for financial communications professionals to serve as advisers beyond investment, M&A, and legal issues, said Michael Fox, president of the corporate communications group at ICR.

“The landscape for public companies, from a communications standpoint, is only getting more complicated, regulated, and challenging, particularly with respect to shareholders and companies reporting their results and activities,” said Fox, speaking Wednesday at the ICR XChange conference in Miami. “It includes a lot of things, whether it's pure activism…or just the increasing requirements on the exposure of compensation.”

When an activist shareholder group's campaign targets a company, it should be handled in a way that focuses on that particular shareholder base, the company's unique story and business plans, and the potential timing of a proxy fight, said panelist Bruce Goldfarb, founder and CEO of Okapi Partners, a strategic proxy solicitation and investor response firm.

“Clients who've been successful on a proxy fight have devoted resources to engaging investors in a very focused way,” he said. “Companies who haven't had that sort of engagement with investors regularly should take advantage of a robust IR program or create one.”

The increase in shareholder activism in recent years is largely due to the growing disparity between the middle and upper classes and the large number of investigations in the securities sector, added Fox.

ICR worked with Denny's in 2010 on a proxy fight between its board and a group of shareholders that claimed the company had poor growth and were unhappy with the CEO.

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