If the head of $15-billion hedge fund Third Point, Dan Loeb, wants to nominate dissident directors
at Honeywell International Inc.
But late last night, American owner Tom Hicks declared war on dissident directors
with an attempt to block the proposed sale by replacing two of the board with his son and a Hicks Holdings employee.
The SEC's decision on November 27 to continue to prevent shareholder groups from having access to corporate proxies for the purpose of electing dissident directors
was confusing and possibly temporary.
Once on the board, even dissident directors
elected after a proxy fight owe their fiduciary obligations to the company as a whole and to all its shareholders, not just to the activist that nominated them.
Last week the two dissident directors
put out a statement reporting that a possible counterbidder was examining Chesterton's books.
The structure of the arrangements vary: some compensate nominees or dissident directors
for travel and related expenses, while others provide bonuses to dissident directors
that reward them for achieving performance targets (i.
Often poisonous in commentary, sometimes disrespectful in demeanor, these two dissident directors
quietly but effectively intimidated other board members, including the lead director.
W]en-counseled boards can create significant leeway to respond to dissident directors
, [but] they must be careful to establish a record of open and informed deliberation that facilitates the ability of all directors to fulfill their fiduciary duties.
Weinberg Center for Corporate Governance at the University of Delaware collaborated in May 2004 to host a nine-member panel discussion on dissident directors