Activist investors to feel pushback from business

are wholly unrelated to increasing long-term value for shareholders.”

Since the days of the corporate raiders of the 1980s, 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.

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. The group has 13 members, including the American Bankers Association and the National Association of Manufacturers.

If the 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.