Alliance’s Waheed Hassan recently appeared on a podcast discussing the Board Risk Score™ (BRS), a product for company management and Boards of Directors to gauge risk levels related to potential threats by activist investors. Click here to listen to the podcast episode.
The BRS is the first of its kind early warning system designed to actively monitor a board’s risk of being challenged by activists. It provides companies and institutional investors with an objective framework to evaluate the level of board’s vulnerability to activist investors. The components of the BRS offer insight into potential areas of contention. As the BRS is dynamic and updated daily, it provides an effective tracking system to evaluate the impact of operating and share price performance on the board’s level of risk. Having access to this form of early warning intelligence is vital for any corporate executive and board that has the potential of activist engagement against their company.
The BRS measures a company’s performance, relative to its 4-digit GICS group. The Score is based on a proprietary model which evaluates a company’s relative 5-year performance on key metrics, including: total shareholder return, revenue growth, operating margin, acquisition/research & development spending, history of earnings surprise, changes in analyst estimates, the impact of cash and short-term investment on enterprise value, and return on invested capital.