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Here’s something that John blogged last week on DealLawyers.com:

The Activist Investor’s Michael Levin flagged a recent Institutional Investor article that claims that activist hedge funds look at the diversity of a board when identifying potential targets for their campaigns.  Here’s an excerpt:

Activist hedge funds are paying attention to board diversity — and are using that information to decide on their next targets. New research shows that activist investors are more likely to succeed when boards are less united and slower to act — two characteristics that are common among diverse boards, where members come from different backgrounds and tend to bring different perspectives. The study found that hedge funds exploit differences of opinion among board members, as well as their more deliberate decision-making processes, to sway shareholder votes in their favor.

The article quotes one of the study’s authors as saying that although diversity provides many benefits, diverse boards take longer to come to a consensus than boards comprised of members of the “old boys network.”  Boards and their advisors should keep this vulnerability in mind when evaluating their potential to be targeted by activist hedge funds and in their activism preparedness efforts.

On a related note, make sure to mark your calendar for our upcoming joint webcast with PracticalESG.com “Corporate DEI Programs After Students for Fair Admissions v. Harvard” on Thursday, August 31, 2023, at 2 pm Eastern. J.T. Ho, Co-head of Public Companies & ESG practice at Orrick, Ngozi Okeh, DEI Editor at PracticalESG.com, and Travis Sumter, Labor & Employment Attorney at NextRoll, will discuss the increasingly complex surroundings in which corporate DEI programs operate. If you’re not already a member with access to this webcast, sign up online for a no-risk trial or email sales@ccrcorp.com.

– Meredith Ervine