Emboldened ESG Activists Savor Next Round of Boardroom Showdowns
Armed with new tactics, investors are preparing to agitate for change at major U.S. companies.
Jeff Green, Saijel Kishan
The Bloomberg article, "Emboldened ESG Activists Savor Next Round of Boardroom Showdowns," quoted Russell Reynolds Associates Consultant Rusty O'Kelley on how activists have evolved their approach over the last five years. The article is excerpted below.
Mention Engine No. 1’s victory over Exxon Mobil Corp. last month to the socially conscious investing crowd and they’ll rattle off a wish list of targets that have so-far resisted calls to reform their social practices.
The possibilities include Twitter Inc., Facebook Inc., Netflix Inc. and private prisons, to name a few. The question, though, is whether the tactics Engine No. 1 used to gain three seats on the oil giant’s board are a viable method for other small activist investors to replicate against companies where they’d like faster change.
Activists have made progress making alternative directors more palatable to big investors, said Rusty O’Kelley, an executive recruiter at Russell Reynolds. Five years ago, the typical slate would have included members of the fund or their close associates, he said. Now the groups work with executive recruiters to establish networks of board-ready candidates.
“They are much more likely to have a slate of people who have industry relevance, who represent gender and ethnic diversity and look and feel more credible,” O’Kelley said. “It’s designed to gain support from BlackRock, Vanguard and State Street.”
Access the full article here.