Boardroom strife attracts activist investors
Agenda, a Financial Times Service, interviewed Karen Kane about the current proxy season.
Poor performance is a key reason for making boards vulnerable to activist investors and their subsequent demands for change. In addition, conflict on the board can also attract negative attention. As a University of Alabama study suggested, conflict is more common on boards where the CEO wields a high degree of structural power and control over director selection.
Elaine Wynn’s public battle to keep her board seat brought unflattering attention to Wynn Resorts as the company saw its stock drop after it cut its dividend by 67 % due to problems with its Macau business. Mrs. Wynn’s fellow directors did not re-nominate her.
T.Rowe Price, the company’s largest shareholder, supported the company’s slate of directors after Wynn Resorts promised to make changes to its governance practices and boardroom diversity.
Ms. Kane noted that the board has a year to deliver on its promise. “Time will tell whether the board is able to improve its diversity and the competency of its members,” she said.