As investors’ attention to board composition and performance continues to escalate, the board of directors have become increasingly vulnerable.

Investors and the proxy advisory firms continue to tighten their policy guidelines relating to director elections. Large institutional investors have increasing expectations in areas such as directors’ diversity, time commitments, tenure and qualifications, among others. All of this is occurring within an environment of aggressive shareholder activism, in which board composition often becomes a central focus. Non-responsiveness to shareholder concerns can result in a “Withhold the vote” campaign against the company’s directors. The introduction of universal proxy card in contested elections means all incumbent directors are now more vulnerable for replacement. With the ability to target individual directors, there is expected to be greater scrutiny of the skills and qualifications of each director and their alignment with the company’s long-term strategy.

The need to analyze directors’ qualifications and various aspects of board composition to identify vulnerabilities has never been more critical.

How We Help

With Georgeson’s board vulnerability analysis, you can identify, assess and address any potential board weaknesses that might become the target of an activist attack.

Our advisory team has strong research capabilities, expert understanding of board composition issues and comprehensive knowledge of the policies of institutional investors and the proxy advisory firms.

Service includes:

  • Review of the various aspects of the board composition to identify any potential concerns against directors.
  • Analysis of past election vote results for directors on your board and others on which they sit because past shareholder opposition to director elections is often used by activists as evidence of failure to target individual directors.
  • Assessment of board skills to identify gaps or weaknesses and benchmark them against your peers. The need for specific areas of expertise/skills on the board varies by company and industry
  • Analysis of activism at your peer companies, including how your top investors voted in other contested situations.


Sample Outline of Board Vulerability Analysis

Research potential concerns against board members

  • Review proxy advisory firms reports for directors’ election analysis and recommendations
  • Identify potential vulnerabilities for individual directors
  • N-PX information for top 25 investors (where available) for election of each of the director at the Company’s most recent shareholder meeting
  • Vote results for the most recent shareholder meetings at other boards where Company’s directors sit

Conduct peer benchmarking (for 5-7 peers) relating to board composition issues

  • Issues relating to age, tenure, diversity, etc.
  • Comparison of Company’s board skills against peers
  • Board refreshment for the Company compared to those for peers

Research activism at peer companies

  • Voting by Company’s investors at other activist situations at peer companies
  • Information about activists that have targeted peer companies and the issues that they have raised
Summarize key policies (and commentary) of top investors relating to board composition issues
Reflect key trends relating to board practices


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