Given the financial sophistication and independence of their members, Audit Committees can be seen as logical corporate governance bodies to initially address the increasing pressures on Board of Directors oversight of capital allocation that are resulting from heightened shareholder activism, growing desires by institutional investors for substantial capital returns to shareholders, and current academic and business school focus on capital efficiency. This Legal Update discusses the need for Boards of public companies, and potentially their Audit Committees, to focus on capital allocation strategies in response to the growing influence and pressure from activists and institutional investors.
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