Large established corporations are more likely than smaller companies to take a meeting with an activist investor and consider their suggestions.

That’s the view of Aneliya Crawford, a partner at Schulte Roth & Zabel LLP, an adviser to activists, who spoke at The Deal Economy 2019 conference in New York on Wednesday about campaigns targeting big corporations, M&A and what could happen to fund insurgencies in an Elizabeth Warren administration.

“Surprisingly it is these [bigger] companies that really don’t want to fight an activist,” she said. “They don’t want to fight another shareholder. It is more likely that a large established company will take the meeting with an activist and consider their suggestions. And in situations where the suggestions make sense, they are prepared to pursue them.”

She added that it is much rarer to find situations, such as 2017’s director fight between activist Nelson Peltz and Procter & Gamble Co., (PG) where the soup maker fought tooth and nail with Peltz and his Trian Fund. Most recently, D.E. Shaw & Co. and Elliott Management Corp. reached informal settlements, not involving director contests, with Emerson Electric Co. (EMR) and AT&T Inc. (T), respectively.

Crawford also suggested that activist investors seeking to block blockbuster friendly deals must do a better job explaining alternatives to the major proxy advisers, Institutional Shareholder Services Inc. and Glass Lewis & Co. In March, Jeff Smith’s Starboard Value LP withdrew its proxy solicitation urging investors to vote against Bristol-Myers Squibb Co.’s (BMY) $74 billion acquisition of Celgene Corp. quickly after ISS and Glass Lewis urged investors to vote for the merger.

She said that the main reason BMY-Celgene was able to close, despite shareholder opposition, was because it received the backing of the influential proxy advisers ISS and Glass Lewis. She added that investors critical of the transaction must do a better job of presenting viable alternatives. “If you come forward arguing that a transaction makes no sense you have to be able to tell shareholders what the alternative is,” she said.

With a presidential election less than a year away, prospects for activists in various administrations were debated, as well.

For Crawford, neither a second Trump term nor a Warren administration appeared to provide lots of positives for activist investors. Crawford said she expected that tough proposed restrictions on proxy advisers, ISS and Glass Lewis, would be adopted and enforced heavily in a second Trump Administration, which would hurt activist campaigns.

At issue is a proposed rule by the Securities and Exchange Commission that would give corporations a chance to review draft recommendations written by the advisers twice before publication.

“Another Trump administration could cause the SEC to continue with some pro-company regulations they have that can have a potentially negative impact on activism,” Crawford said. “I’m thinking the proposed rule … that would further regulate the proxy advisory firms. That would have a chilling effect on ability of activists to get greater support.”

However, she added that Warren could raise different but also challenging issues. At a recent Democratic candidate debate, Warren suggested that workers at big corporations should be able to elect some members of a corporate board. She argued that the move could discourage multinational firms from moving operations – and jobs – overseas.

Even so, Crawford said that Warren’s approach raises questions.

“Elizabeth Warren is very outspoken in her views that corporations should owe their fiduciary duty to broader range of constituents stakeholders as opposed to primarily shareholders,” she said.

“From an activist perspective it is raises some questions about accountability. If you can’t hold management accountable based on the value they give to shareholders, the question is then, who are they accountable to and based on what factors? Warren has suggested that employees could be on the board. That could change the entire dynamic of corporate boards.”

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