By Maureen Wolff, President and Partner
When The Men’s Wearhouse dismissed George Zimmer, the company’s high-profile pitchman and executive chairman, this summer, observers were left wondering what had caused the split. The company announced it had parted ways with Zimmer, who founded The Men’s Wearhouse in 1973, on June 19, five hours before its annual stockholders meeting was scheduled to take place. It provided an extensive explanation from the board of directors via press release – six days later. In the interim, and for several days thereafter, fans of Zimmer and his iconic commercial appearances took to social media with cries of “foul.” Zimmer himself commented on his ouster through a number of media channels.
Zimmer’s split must have been particularly damaging from a communications and branding perspective. After all, it is difficult to even think of the men’s retailer without hearing Zimmer and his classic phrase, “You’re gonna like the way you look. I guarantee it.” But the travails of communicating succession aren’t limited to high-profile executives. In the past several weeks, we have seen changes or controversy at the top of a number of public companies, including J.C. Penney, Microsoft, Office Depot, Royal KPN and Vivendi.
Finding the next CEO or chairman is one issue. Communicating to investors that the board of directors has a sound plan for succession is quite another entirely. This means the challenge is two-fold: overcoming the stigma associated with internal succession discussions while a CEO – especially a successful one or a company founder – is still in place; and crafting a message that will ultimately calm investor fears about uncertainty caused by a pending transition. Continue reading
When it comes to corporate governance, board members and shareholder activists are usually on opposite ends of the spectrum. But at separate conferences in New York and Boston this month, the two camps expressed a surprisingly similar view about the most effective way to deal with the anticipated increase in shareholder activism in 2011: better communication.
According to a study by law firm Schulte Roth & Zabel (SRZ), 76% of activists surveyed identified “dialogue/negotiations with management” as the most effective activist strategy to achieve desired results. None of the other proposed strategies – shareholder resolutions, publicity campaigns, proxy contests or litigation – received more than 16% of the vote.
Results of the study were highlighted at SRZ’s Shareholder Activism Conference in New York, which I attended as part of an invited group comprised mainly of hedge fund and private equity fund managers. Continue reading
Earlier this week I moderated a NIRI webinar with three senior-level investor relations officers representing the finance, real estate and retail industries. The panelists highlighted some new initiatives that IROs should consider in 2010 which, according to the Chinese calendar, is The Year of the Tiger. This just might have been the world’s only “Tiger”-related discussion in the past few weeks that had nothing to do with a certain golfer with a PR problem.
Within Chinese culture the number six is auspicious and considered good for business. So in keeping with this theme, here are six ideas that arose from the panel discussion that are worth considering as you develop your investor relations plan for the coming year. Continue reading
To whom is the corporation accountable? Before SOX, majority voting, proxy access and “say on pay,” director elections were democratic in name only, and the lines between board and management were blurry at best. Except for the occasional gadfly at an annual meeting, boards rarely communicated with shareholders directly.
Today, after nearly a decade of turmoil in the markets and changes in the regulatory environment, the insulated board is a thing of the past. Shareholders are coming to view directors as leaders whose perspectives may diverge from those of management, who are empowered to exercise independent judgment on matters of consequence, and who are accountable for corporate performance.
A small but growing number of boards, recognizing that investor expectations have changed, have made dialogue with shareholders a formal priority. They are experimenting with new approaches for nurturing this interaction and learning from the experience. Although systematic programs for board-shareholder communications are still atypical in Corporate America, it is not too early to make some observations about what the more successful efforts have in common. Continue reading
Recently, Sharon Merrill Associates President Maureen Wolff and I spoke on “Navigating the New Proxy Access Rules” at the NYSE Euronext’s “Building Blocks for Successful Investor Relations” conference. The event attracted great attendance from CEOs, CFOs and investor relations officers – despite some obstacles getting downtown with the Yankees World Series victory parade taking place at the same time about a block away. Some things you just can’t plan for. As a life-long Red Sox devotee, it was rather painful to hear the million-plus Yankees fans lined up on Broadway cheering for A-Rod and company. Wait ‘till next year I guess.
When investor relations practitioners get together these days, we tend to discuss the same general questions, gripes and concerns: When will we see an upturn in the economy? Why can’t we have a better understanding of who owns our stock? Will the Yankees buy another championship next year? What effect are dark pools having? But one topic that should be getting significantly more attention in the IR world is the inevitable change in shareholder proxy access. If two proxy-related proposals from the SEC are implemented, the changes in proxy access will have a profound effect on the boardroom and board/shareholder communication. It’s time to get ready. Continue reading