Coppersmith Presentation to Alere Inc Stockholders
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Governance: Reactive, Imbalanced and Entrenched
Coppersmith believes Alere's poor performance is a direct result of its deeply flawed governance structure:
1. Alere suffers from an unhealthy concentration of power that impedes accountability and management-Board balance
Combined Chairman and CEO roles, laying foundation for Zwanziger's seemingly autocratic manner and entrenchment
NO Lead Independent Director
2. In our view, this entrenchment stifles debate and discourages change, resulting in reactive not real, proactive changes
We believe Alere's governance structure has the effect of preserving Chairman & CEO Zwanziger's position and
inhibiting the Board's role as a counterbalance to management
Alere's Board is defined by its long-tenured incumbents, its multiple insiders and its multiple Board member interlocks
Alere's nomination of new director candidates is tainted by a process driven by management and its investment bankers
with apparent pre-conditions for support of management's strategy and preservation of the status quo
3. New nominees, chosen by management in a seeming rush to defend Alere's power structure, are unlikely to drive change
> Business judgment lapses, regulatory inquiries and questionable career episodes prompt risk management concerns
> Principal experience for 3 nominees is in pharmaceuticals, not medical devices - redundant and much less relevant
> Despite its importance to management's stated vision, no experience in health management or health info exchanges
Coppersmith believes Alere's poor governance structure actively stifles constructive debate
and counterbalance of management, and casts doubt on Company-promised change
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COPPERSMITH
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