The 2021 Palm Beach CorpGov Forum – Report with Video Highlights
The 2021 Palm Beach CorpGov Forum – Report with Video Highlights
The Palm Beach Hedge Fund Association and Nasdaq, Inc. hosted the first Palm Beach CorpGov Forum on Sept. 30 for an in-person event featuring investors, attorneys and other advisors who have consulted on board intelligence and the most prominent activism campaigns in recent years. Below are video highlights from the event, along with spotlight articles contributed by Sarah Crowe, ESG / Sustainability Channel Lead at Nasdaq and Michael Robinson, Chairman & CEO, The Montgomery Strategies Group.
Lawrence Elbaum, Partner and Co-Head of Shareholder Activism, Vinson & Elkins
Dave Goodboy, President, Palm Beach Hedge Fund Association (MC)
Ira Gorsky, Executive Vice President, Edelman explains how antitrust regulation has evolved from a focus on consumer harm to a “big is bad” approach. As a result, companies effectively need to engage in a PR exercise to ensure they do not become political targets.
Chuck Garske, Senior Managing Director at Okapi Partners, describes the rapid evolution of the SPAC market. In particular, he highlights the role of retail investors, who became such a large presence that their votes became critical to closing transactions.
Charles Gradante, Co-Founder, Hennessee Group LLC, who currently runs a family office, discusses regulation of “meme” stocks and retail traders along with heavy options trading. He also addresses the prevalence of “naked short” positions taken by major market makers that he believes should result in more severe punishment. Additionally, he voices support for retail investors who forced a short squeeze earlier this year and nearly toppled Gabe Plotkin’s Melvin Capital Management LP.
Barbara Trebbi Landry, Chapter Chair, South Florida, Women Corporate Directors (WCD) Foundation joins a fireside chat with Charlotte Kiaie, Principal, MKA Communications to discuss the importance of board diversity. Ms. Landry emphasizes the importance of “cognitive diversity” rather than focusing solely on race and gender.
Lawrence Elbaum, Partner and Co-Head of Shareholder Activism, Vinson & Elkins, explains the difficulty of challenging proxy advisors like Glass Lewis and ISS. In his view, the proxy advisors could lose their credibility if it became apparent that any recommendations they make can be disputed in court.
Sarah Crowe, ESG / Sustainability Channel Lead at Nasdaq, explains the challenges of “carbon accounting” and that companies face hard work when assessing climate risk. To truly measure such risk, companies need to go up the supply chain and then downstream to their end customers, she says.
Dan Zacchei, President, Special Situations, Sloane & Company, explains how aggressive and public bids for companies can quickly sour conversations between potential buyers and corporate boards. For instance, companies may be unhappy to see bidders go to the press without first discussing offers privately and attempting to seek common ground. Ultimately, however, both friendly and hostile tactics have their time and place.
Spotlight: Sarah Crowe, Nasdaq
ESG and ESG data have increasingly become an important resource for investors seeking performance indicators, but also for companies trying to increase operational efficiency, decrease resource dependency, and attract new customers and employees. As a financial technology company serving corporate clients, Nasdaq’s Corporate Platforms support our clients along their ESG journey. This includes not just technology, but also ESG sdvisory services to help corporate clients understand and prioritize the right investments for their specific situation.
In alignment with our purpose of championing inclusive growth and prosperity, we now offer our newly-listed companies ESG tools and resources to help them begin to develop strategy and muscle memory around ESG practices and reporting. Nasdaq helps young and mature companies alike make sense of the proliferation of ESG data and address segment-specific demands. We additionally serve boards and leadership teams with a comprehensive suite of governance tools that optimize collaboration efforts and streamline compliance processes to drive ESG excellence.
Sarah Russell Crowe is a sustainability and corporate social responsibility leader with a passion for helping organizations align and achieve their business and sustainability goals. Having thoughtfully led ESG work in-house for corporations and external consulting across sectors, she now guides Nasdaq’s clients through the ever-evolving ESG reporting landscape. Through Nasdaq’s OneReport, she empowers organizations to define and own their ESG narrative. Sarah has deep expertise in energy and climate, and holds an MBA from the University of St. Thomas as well as BAs in Economics and French from the University of Wisconsin-Madison.
Spotlight: Michael Robinson, Montgomery Strategies Group
Washington Is Here To Help – Really
By Michael W. Robinson
For the singular macro-level issue that will hover over corporate governance decision making in 2022, thanks are due to former President Ronald Reagan for his prophetic admonition that “the nine most terrifying words in the English language are: ‘I’m from the Government, and I’m here to help.’”
Articulated four decades ago, Reagan’s commentary is as true today as it has ever been.
Indeed, corporate and financial leaders alike should have no illusion – the active and activist leaders that the Biden Administration have appointed to many of the nation’s most powerful regulatory agencies are poised to push policies that could fundamentally change the legal, business, competitive, and regulatory landscape on which the capital markets and the economy have come to rely. From the SEC to the FTC to the CFPB to OSHA, this alphabet soup of agencies share a common mission and vision: namely to move as quickly as possible to leverage the immediacy of change that regulators can enact, especially given the slow pace of legislation today.
To meet these challenges, companies – in partnership with their respective trade associations – are well advised to engage now in order to help shape the contours of the new rules and regulations. To that end, it is worth considering employing a mix of these approaches:
Embrace regulation as a competitive advantage. As is the case in most industries, the bulk of participants operate with a commitment to the highest ethical standards and play by the rules (to the extent that they exist). Nevertheless, there are always those whose less than above board dealings sully an industry’s reputation. To be sure, new and stricter regulations can prune these competitors out of the business, resulting in a marketplace that is larger, safer, and better trusted by its users.
Ensure that newly-developed regulations include every participant in a given industry, not just some of them. Doing so will put every player under the same regulatory umbrella. With 20/20 hindsight, companies often rue the exemptions secured by competitors who, in turn, successfully leverage such advantages to their long-term benefit.
Drive clarity in the resulting regulation or legislation, given that the only thing worse than an instant disadvantage is long-term ambiguity that could take the courts years to resolve and be an ongoing drag on the business until then.
Take the high road when it comes to public and private rhetoric. With long memories, Washington decision-makers will not soon forget explicit or implicit commentary that castigates them. Even as emotions escalate – and the temptation of social media is ever-present – keeping the focus on the policy, and the not the person behind it, will yield the best results. The alternative, an escalating public confrontation, will obscure the legitimate policy matters at issue and almost certainly generate unflattering media coverage for the business and/or leader involved.
While the impact of these efforts may not put an end to the change that is clearly in the offing, corporate governance leaders are well positioned to help strike the right balance between results that are either overly onerous or too timid. For enterprises of all sizes, the time to begin this engagement is now.
Michael W. Robinson is the Chairman and CEO of The Montgomery Strategies Group, a full-service agency with broad expertise in reputation management, crisis and litigation communications, public affairs and regulatory advocacy, financial communications and transactions, as well as marketing and brand awareness.