The Deal published key takeaways and quotes from Alpha CEO and Founder

Our team recently had the opportunity to attend, support and present at the National Association of Corporate Directors (NACD) annual Summit.  The NACD does a tremendous job of delivering impactful programs that matter to their members and the turnout of both public company and private entity board members was very high.  The interaction and engagement between the attendees was incredibly informative and we took away the following key themes in terms of what’s on Board of Director’s minds these days:

 

  • Governing in the Age AI: IT investments have been become the number one spend for many companies, and thus artificial Intelligence (AI) was a hot topic.  While some of the discussion talked about the potential benefits of AI (optimizing decision-making processes, tracking carbon emissions faster, enhanced transparency, etc.), much of the online and offline conversations centered around the risks.  Boards are worried about their ability to help ensure ethical implementation of AI and to manage the risks associated with development and deployment inside and outside their organizations.
  • Executive Transition: Failed leadership transitions were estimated to cost the economy over $1 trillion annually and there over 200 public company CEO transitions already this year.  It’s been our experience that boards have become much quicker to consider leadership transitions, and our key advice was to have an integrated communications plan (both IR and PR) completed before the announcement to properly manage all critical stakeholder needs post transition.
  • ESG: While boards have not given up on corporate responsibility and sustainability concepts, the term “ESG” seems officially dead.  There was clear agreement on the importance of employee and community engagement, but the collective audience agreed that giving lip service to ESG as a whole needed to transition to the core components that are truly connected to each company’s strategy, as well as business ethics and values.
  • Human Capital Blind Spots: One of the more interesting panels revolved around the fact that the large majority of domestic companies’ value used to be in physical assets, but today is now centered around intangibles and human capital.  Boards are asking more and more questions centered around investments in people, process and technology that can help them retain and accelerate the learning of critical people assets.  Our team knows this firsthand given how actively involved we’ve become in employee communications over the last year.
  • Activism Will Pick-up in 2025: Lastly, our CEO and Founder co-led an activist panel with Kimberly Petillo-Décossard (White & Case) and Stephen Brown (KPMG). We had a packed room and an interactive discussion around numerous trends, including the shared view that M&A activism and/or pressure to perform strategic alternative reviews will accelerate going into 2025.  All three panelists talked to strategies for boards to prepare themselves and “be their own activists.”

The Deal publication was in attendance and interviewed our Founder after the event, and published the following takeaways:

  • “M&A activism had been partly on the backburner while interest rates were high, though recent rate reductions appear to be driving a jump in deal-related campaigns, said Alpha Advisory Group CEO and founder Chris Hodges.”
  • “Hodges also noted that the emergence of universal proxy cards has contributed to a surge in economic activist campaigns by new activists or first-timers. Some of that increase relates to changes in the proxy card, but much of that appears to be driven by new activist funds coming on the scene recently that were formed by analysts and portfolio managers who left more established insurgent funds.”
  • “However, panelists agreed that ESG proposals and campaigns haven’t gotten much backing lately. ‘Campaigns related to the E and S components of ESG are down, but this isn’t going to go away,’ Hodges said.”
  • Lastly, our founder pushed the boards and their IR teams need to reach out to long-term partnership investors and get their direct opinions when they have opportunistic activists hovering and offered this client example: “The large active manager came in and said, ‘There is some short termism here, we’re here for the long term, we think about this in the next three to five years and you’re doing the right things to fix the business,’ Hodges said.”

Overall, it was great to see how much more sophisticated and educated today’s board members have become, and we were highly impressed by the caliber of the conversation through the multi-day event.  We encourage all board members to leverage the tremendous resources of the NACD and want to thank the team for their hospitality.