Good news for Paul Sarbanes and Michael Oxley: The senator and congressman whose names were affixed to Congress’ corporate-reform legislation have been knocked out of first place on the list of bogeymen haunting the corporate boardroom.
The new leader: hedge funds.
That is the word from well-known lawyer Martin Lipton, who advises corporate executives and boards, entrenched and otherwise. Lipton sent his clients a memo at the first of this month that warned against overreacting to Sarbanes-Oxley, and instead he listed the No. 1 issue for directors as “anticipating attacks by activist hedge funds seeking strategy changes by the company to boost the price of the stock.”
From Lipton’s perspective, having a bunch of hyperventilating hedge funds breathing down the necks of his clients is a bother. But for shareholders, and for the economy at large, this is a welcome change.
