Icahn & Co: How can you recognize a wolf in sheep’s clothing – and when is it too late?

Dear readers of GermanBoardNews,

Do you remember Carl Icahn? The feared activist investor once served as the Role model for the film character Gordon Gekko (“Wall Street”). Icahn was seen by many as the epitome of a U.S. financial capitalist, ruthlessly seeking his own advantage and maximizing profits.

What a contrast to the image the 86-year-old has recently cultivated: “Animals are one of the things I get emotional about,” Icahn said a few days ago. That’s why the fast-food chain McDonald’s must should only work with suppliers who treat pigs decently.

So have we misjudged Icahn for decades? Has the multi-billionaire become mellow with age? Or is it simply a matter of adapting his strategy to the green zeitgeist; of maximizing returns in a green-social guise??

What makes me suspicious about ESG activists??

I do not know. What makes me suspicious is that Icahn doesn’t leave it at appeals, but demands two seats on the McDonalds board. That would allow him, even beyond animal welfare, to influence corporate strategy and pursue his own interests

The case reveals a dilemma that more and more management and supervisory boards are facing: Activist investors recently prefer to push for changes that ESG investors also favor – climate and animal protection, for example. RWE is currently confronted with a corresponding campaign rWE is also currently confronted with such a campaignand last year ExxonMobil.

With this strategy, activists increase their chances of forging majorities against management and pushing through their own supervisory boards There is a growing threat of unholy alliances between activists and traditional investorsHowever, the question of how serious the activists really are about sustainability remains completely open

Will the green cloak be taken off again?

I see the danger that some of them will turn out to be wolves in sheep’s clothing – and quickly take off their green coats again when it comes to the real issues. For example, whether the company should invest more in green technologies or pay out a lavish dividend

Boards of directors and supervisory boards are therefore well advised to prepare themselves for the attacks of “green” activists. With bold strategies for green transformation, but also with well-positioned boards: Anyone who brings ESG experts onto the supervisory board now takes the wind out of activists’ sails – and lowers the risk of unholy alliances.

But beware: Supervisory board leaders often don’t find competent sustainability experts in the old-economy networks they or their HR consultants usually tap into. This is because decision-makers from sustainability banks, ESG analysis houses or green startups are rarely represented there

It is therefore important to think outside the box and break new ground in recruiting supervisory board members – for example in the form of matching models

Sincerely yours,

Yours, Peter H. Dehnen (Editor)