“Far too many corporate directors have failed to honor their responsibility to manage the corporations they serve for the benefit of the firm’s shareholders. In this powerful and articulate book, attorney and board consultant Ira M. Millstein aims to drive a stake into director passivity and create a new model for the activist director. It is a grand and important vision.”
~ John C. Bogle, founder and former CEO, The Vanguard Group
We’re in the first month of the new year, and if you’ve been following our blog, you know that this week we’ve been featuring The Activist Director, by Ira M. Millstein. Yesterday’s guest post highlighted the need to become an activist director, and now you might be adding “become an activist director” to your new year’s resolution, but where to start? You’re in luck. Today’s post highlights important steps you can take to obtainin this goal.
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Steps to Becoming an “Activist Director”
1. Recognize the Need for Change
It is not enough to accept the status quo or leave it to the capital markets to self-correct. An activist director recognizes the imperative need for change. The future of the corporation – strategy – is the board’s responsibility.
2. Build Corporate Culture
An activist director doesn’t miss board meetings and on his or her own time visits factory floors, asking workers the right questions to improve morale and productivity. Building a culture aligned with corporate values starts at the top.
3. Balance Profit Maximization with Stakeholder Needs
The activist director thinks beyond profit maximization – balancing the short-term needs of the corporation against the needs and demands of all stakeholders. The activist director listens but resists pressure from shareholders, with self-serving agendas, or from proxy advisors, the media, and the gratuitous advice of those who impose one size-fits-all solutions to governance practice.
4. Reject NIFO
Activist directors reject the “nose in, fingers out” (NIFO) attitude—the idea that it is only the CEO who is in charge of the corporation’s future.