Highlights from the Hess case.

• Author: Mole, Ann

In early 2013, an activist hedge fund, Elliot Management, acquired a 4% stake in Hess Corp. and began clamoring for significant changes in board composition. In letters that were sent by Elliot to Hess's shareholders and filed with the SEC, Elliot expressed its concern about what, to us, appeared to be a management knowledge-captured board:

* "While the independent directors on the Hess board are accomplished in their fields, none (as in zero) have operating experience in the oil and gas industry."

* "By nominating five highly accomplished executives with substantial expertise and deep experience, we hope to provide shareholders an alternative to the poor performance and lack of accountability currently at Hess."

* "Leaders of this caliber would be a welcome addition to the board of any company. To Hess, they bring substantial, relevant experience in areas where the Company sorely lacks counsel and oversight."

Before the Elliot proxy fight, Hess had no directors with industry expertise on its 14-member board. Eventually, Hess and Elliot settled hours before the annual meeting of shareholders and decided to offer a slate of candidates that consisted of three of...