Sam Lieberman of Sadis & Goldberg is a Featured Speaker at 13D Monitor's Annual Active-Passive Investor Summit

• Be prepared. Management and incumbent directors often look for an excuse to reject or disregard an activist – even in the current era of purported "engagement." So it is critical for any activist to prove credibility from the first interaction with management. This means having a clear strategic plan to propose. This also means knowing the target's corporate governance profile, including the legal and structural weaknesses in its defenses. We advise our clients that their preparation sets the tone for the first conversation, by establishing credibility and deterrence right off the bat.

• Should try engage management behind-the-scenes with a strategy that permits management to be part of the solution. I think most of management resistance to activism is ego-driven. Activism threatens management's control over the Company, and implicitly suggests that management is doing a bad job. So if an activist can engage management with a plan that can create the appearance that management is part of the solution, it can take some of the sting out of an activist campaign. This is not possible with certain campaigns, and certainly some management teams, but it is worth a try.

• Need to be prepared to respond to management claims of "Short-termism," which is a bogus slur invented by incumbent management to excuse poor results. Activists want a return on their investment. That is what stockholders want, too. And a rational stockholder wants that return sooner rather than later. Importantly, no reliable consensus has emerged from academic research showing that activism harms companies in the long term. So the short-term vs. long-term argument sounds like nothing more than an empty activism defense "talking point" to me.

• Should expect to see more aggressive activism in the coming years, with more activism targeting larger corporations, as in the case with Yahoo! As for future corporate governance issues, Sam opined that the most pressing corporate governance issues will focus on what makes the most effective board of directors. There will be more attention paid to ensuring that a board of directors is truly independent of management, including having directors nominated or identified from independent sources. We will also see more focus on reducing the tenures of some directors, to discourage the clubby and status quo thinking we see all too often in corporate boardrooms. Another important issue we will see debated is whether activist fund managers, and other investment advisers, should more often be on the board of major corporations.

The event brought together more than 350 activist investors, institutional investors, hedge funds, board directors, CEOs, proxy solicitors, corporate and securities attorneys, investor relations professionals, investment bankers and others for dynamic sessions and a full day of networking.

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