From a whisper to a firestorm: how ready are you to respond to the revenge-laced rhetoric promoted by activist organizations and shareholder-revolt leaders?

• Author: McCurry, Michael D.
• Position: SHARES

HAD YOUR FILL of politics in 2004? Well, if you're a corporate officer or board member, there's a good chance that you yourself are already being targeted by a very political opponent. And--most likely--you don't even know it.

Over the last few months, activists and their allies have begun setting their sights on directors and senior managers at a dramatically accelerating pace. Their goal is simple--stop focusing on traditional tried (and tired) boycotts for which corporations are well prepared, and instead focus on weaker flanks.

Ambitious pension fund trustees, family values activists, enviro-advocates, hostile ex-company officials, and other shareholder activists are targeting individual board members, senior management, business partners, and even stock prices to achieve their goals. They are getting traction and are gaining speed.

When Sinclair Broadcasting Group announced it would show a controversial documentary on John Kerry last fall, left-leaning opponents quickly mobilized online to target not just advertisers but major shareholders as well. In the heart of the firestorm, Sinclair's stock dropped by 8 percent in just one day. On the right, the activity has been just as strong, with targets including Procter & Gamble and ABC's "Desperate Housewives."

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To further strengthen their hands, interest groups are partnering with public pension funds to pressure executives. As the Wall Street Journal recently noted: "The willingness to hire former activists reflects a growing trend among big industrial companies to deal with environmental groups rather than dismissing their concerns. Earlier this year Exxon Mobil Corp. agreed to hold regular meetings with Amnesty International to monitor the oil company's human-rights performance. Amnesty had joined with the New York City Employees' Retirement System, a major Exxon Mobil shareholder, to press for the meetings."

Why is this happening? A "perfect storm" combination of: 1) new political realities; 2) corporate scandal; and 3) technology.

On the political front, the 2004 elections sealed a virtual Republican Party lock on Congress and, coupled with a second Bush term, will all but freeze the legislative turnstile for proposed business constraints coming from Capitol Hill. Faced with a four-year uphill battle and dim prospects for legislative victory, many savvy liberal activists have understandably started to shift their focus from D.C.'s K Street to Wall Street.

At the...