Wachtell Lipton Discusses Corporate Purpose—Stakeholders and Long-Term Growth

Until recently, the dialogue on corporate governance has focused almost exclusively on how to increase the ability of shareholders to impose their will on corporations. Shareholder groups, advisory firms and academics continually developed and added to a set of “best practices” for corporations and their boards of directors, designed to facilitate the ability of shareholders to communicate to corporations what the shareholders wanted and to enforce those dictates if the corporation did not respond. The underlying assumption of this movement was the concept of shareholder primacy. Even the Business Roundtable, in 1997, inexplicably changed from a prior statement of corporate … Read more

Wachtell Lipton on Dealing with Activist Hedge Funds and Other Activist Investors

Regardless of industry, size or performance, no company should consider itself immune from hedge fund activism.  No company is too large, too popular, too new or too successful.  Even companies that are respected industry leaders and have outperformed the market and their peers have come under fire.  Activists set new records in 2018, targeting the largest number of companies (nearly 300), deploying more capital and winning a greater number of board seats (161) than ever before.

Campaigns by the most well-known activist hedge funds are surging, and there are more than 100 hedge funds currently engaged in activism.  Activist hedge … Read more