Bloomberg, July 2, 2015 article: "U.S. Chamber Forms Coalition to Fend Off Activist Hedge Funds" [Lobbyists sharing in the prosperity created by activism]

The Shareholder Forum^TM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized in the January 5, 2015 Forum Report of Conclusions.

Forum distribution:

Lobbyists sharing in the prosperity created by activism

Source: Bloomberg, July 2, 2015 article

U.S. Chamber Forms Coalition to Fend Off Activist Hedge Funds

by Alexis Leondis and Miles Weiss

July 2, 2015 — 3:17 PM EDT

Corporations are turning to the nation’s biggest business lobby to help fend off activist investors such as Dan Loeb and Bill Ackman.

The U.S. Chamber of Commerce is forming a coalition to make sure “long-term value creation” drives public companies’ decisions, according to a letter it sent Thursday to Securities and Exchange Commission Chair Mary Jo White. The group plans to weigh in on regulations that affect corporate governance, the letter said.

“Our members have experienced an exponential rise in the frequency of special-interest activism of all types,” said the letter, which was signed by trade groups including those for fuel manufacturers, insurers, real estate investment trusts and wholesaler-distributors. “These campaigns often involve idiosyncratic agendas that are wholly unrelated to increasing long-term value for shareholders.”

Since the days of the corporate raiders of the 80s, activist hedge funds have evolved into a formidable force, with an estimated $200 billion to invest. Carl Icahn has rebranded himself as an outspoken shareholder advocate. Latter-day activists including Loeb, Ackman and Jeff Smith often write poison-pen letters to seek changes to corporate strategy and criticize portfolio companies on business television.

Insulating Management

Last week, White said the SEC plans to recommend rules that would allow shareholders to vote for both management and dissident-supported directors in proxy fights. Current rules allow companies to exclude names of investors’ director candidates from ballots cast in advance of annual meetings.

The chamber’s new group will be overseen by Tom Quaadman, vice president of its center for capital markets competitiveness, said spokeswoman Erica Flint. The group has 13 members, including the American Bankers Association, the Securities Industry and Financial Markets Association and the National Association of Manufacturers.

If the chamber’s coalition wants to “facilitate long-term value creation, they should support reforms that strengthen shareholder rights and oppose arrangements that insulate managements from shareholders,” said Lucian Bebchuk, a professor at Harvard Law School.

This Forum program was open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the purpose of this public Forum's program was to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant was expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.