shareholder activism

Shareholder Activism: What Board Members Need to Know

Shareholder activism plays a pivotal role in the evolution of corporate America’s public companies. In fact, the listed companies that shareholders targeted in
2013
“had an average market capitalization of $10 billion.”

That’s some serious power when it comes to influencing major corporations in the United States.

But what does shareholder activism really mean? To put it simply, shareholder activism occurs when an individual (or an entity) uses their equity stake in a corporation to put pressure on the company to make specific changes.
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Want to Be on a Public Company Board? Not So Fast!

Securing membership on the corporate board of a publicly traded company is no small feat. In fact, based on recent calculations, there are only about 70-80 board openings for NASDAQ-listed companies in the United States annually. That’s just a handful more people than were accepted into the NBA last year!
public company board

Historically, corporate boards have favored a very narrow type of board member: former CEOs from Fortune 500 companies or prominent CFOs who can be labeled an “audit committee financial expert” in adherence with the Sarbanes-Oxley Act of 2002.

These kinds of board members have long been identified as the “gold standard” for corporate director appointments.

However, the public company board membership selection process has become increasingly competitive over the past couple of decades. Former prominent CEOs and CFOs can no longer expect to slide easily into board membership at public companies. Boards continue to place value on more modern types of expertise—think entrepreneurs or tech experts.

More than ever, executives with unique backgrounds have a shot at obtaining the most exclusive of board appointments. But in order to have the very best chance at one of these opportunities, we encourage you to follow this advice:
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