Lori Marks-Esterman Quoted in The Deal on Activists Calling Out Lead Directors Over Imperial CEOs

Lori Marks-Esterman, Chair of Olshan's Litigation Practice Group and Head of Olshan’s Shareholder Activism Litigation Practice, was quoted in The Deal (subscription required) on how the role of the Lead Independent Director (LID) has become a growing focus in activist campaigns at companies where the CEO also serves as board chair. Lori notes that long-serving LIDs who have worked closely with CEOs for many years may struggle to hold management accountable: “If you’re a [LID] and you’re working side by side with the CEO for 10, 20 years, it could be difficult to be sufficiently independent to hold that person accountable. It’s human nature to build relationships with people and hard to have the objectivity to say, ‘you’re not doing the job.’” The LID role has become a focal point in governance battles as activist investors target companies with entrenched leadership and long-tenured boards, raising questions about whether these directors have the authority, independence and influence to hold management accountable, or whether the position is largely symbolic. Lori argues that CEOs, not LIDs, are really running board meetings: “It is extremely difficult for boards to fulfill their obligation to hold management accountable when the head of management is in the same room and running the board. When management isn’t held accountable, eventually performance suffers and then you get an activist that shows up and says the board isn’t focused on management performance.”