The Conference Board Working Group on Hedge Fund Activism released a set of recommendations for public companies and institutional investors that might find themselves involved in an activism campaign mounted by hedge funds. The proposed recommendations are supported by a research report discussing the Working Group's findings, including recent notable cases of activism such as those at Yahoo, CSX, Motorola, and The New York Times.The recommendations were formulated by a heterogeneous group of high-level corporate and investor representatives, instituted under the auspices of The Conference Board Governance Center. They include guidelines on monitoring securities holdings, responding to requests for change, ensuring voting integrity, and overseeing hedge fund management. Working Group members include:- Major pension funds and asset management firms, including TIAA-CREF, Florida State Board of Administration, and Barclays;- Corporations at the forefront of corporate governance developments, including Pfizer, American Express, and The Coca-Cola Company; and- Industry associations and service providers such as Managed Funds Association, the National Investor Relations Institute, ISS-RiskMetrics Group, Standard & Poor's, and Weil, Gotshal & Manges, LLP.The group is co-chaired by Stephen Davis, director of the Millstein Center for Corporate Governance and Performance at Yale School of Management and chairman of the board of Hermes Equity Ownership Service, and Jon Lukomnik, managing director of Sinclair Capital and recently-named director of the Investor Responsibility Research Center Institute for Corporate Responsibility (IRRCi) in Washington, D.C. Matteo Tonello, Associate Director, Corporate Governance at The Conference Board serves as research director and authored the final paper.The Conference Board Working Group recommends actions which can be taken voluntarily by corporations and investors. Due to the non-advocacy policy adopted by The Conference Board, no recommendations to legislative bodies or regulatory agencies were issued. The Working Group focused on the following major areas:(1) What corporations can do to better monitor securities holdings and learn about those accumulations of stock or extraordinary trading patterns that may reveal a hedge fund's activism tactic.(2) What measures corporations can adopt to avoid becoming a target.(3) How boards and senior executives can react to an activism campaign and how they should respond to requests for change made by hedge funds.(4) How companies and large institutional investors can ensure the integrity of the voting process in those situations where hedge funds borrow shares for the sole purpose of influencing a shareholders' vote; and(5) What considerations institutional investors should be mindful of when allocating some of their assets to hedge funds pursuing activism strategies.The recommendations were formally endorsed by the National Investor Relations Institute (NIRI). NIRI is the largest U.S. association of investor relation officers with 4,400 members representing nearly 2,100 publicly held companies and $5.4 trillion in stock market capitalization.