TESTIMONY On SENATE BILL 110
By
LINDA WOGGON
VICE PRESIDENT OF GOVERNMENTAL AFFAIRS
OHIO CHAMBER OF COMMERCE
Before The
SENATE JUDICIARY COMMITTEE ON CIVIL JUSTICE
SEN. JEFF JACOBSON, CHAIRMAN

JUNE 13, 2001

Senator Jacobson and members of the Senate Judiciary Committee on Civil Justice, I am Linda Woggon. I serve as Vice President of Governmental Affairs with the Ohio Chamber of Commerce. As I’m sure you know, the Chamber is Ohio’s largest and most diverse statewide business association. We represent over 5000 companies of all sizes and from all segments of business and industry.

I am here today, on behalf of the members of the Ohio Chamber, to speak in support of SB 110, a bill that would make important changes in our state’s corporate governance statutes.

As an employee of an association, I often remind our members that direct contact with their State Senator or Representative is the most effective form of advocacy. In other words, as your constituents they carry much more weight with you than I could ever carry. And, that’s the way it should be. However, there are also times when it is risky for a company to step forward to publicly testify in favor of certain statutory changes. That act of testifying could be misconstrued and unfavorably affect the company’s market value.

This hearing on SB 110 is one of those times. That’s why the Ohio Chamber and the Ohio Manufacturers’ Association are here to strongly advocate for passage of this legislation on behalf of our many members who are publicly held companies, incorporated in Ohio.

SB 110 will place another tool in the arsenal of Ohio corporations who become the object of a hostile takeover. In the public policy arena you are often forced to address these kinds of needs during a crisis – when a specific Ohio company has been clearly targeted and must turn to the state to enact legislation giving it the tools it needs to responsibly respond in the best interests of its shareholders and employees.

Some people might suggest that Ohio’s anti-takeover statutes are strong enough and that legislative action of this nature is unnecessary unless there is a crisis. But, we disagree. We think it makes more sense to proactively consider the defensive takeover tools we should make available to our state’s corporations. These public policy considerations should be based on a careful analysis of the evolution of takeover tactics, the most effective responses, and the experience of other states rather than an immediate crisis. And, that’s the kind of sound foundation underlying the statutory changes proposed in SB 110.

I’m not going to try to explain the details of this legislation; we have an expert here to testify on the history of takeover provisions and the ramifications of the changes proposed in SB 110. But, before I conclude my testimony I’d like to emphasize again some important points made by Sen. Johnson in his sponsor testimony last week.

Ohio is the corporate home of many companies. These companies, their suppliers and their customers are the economic engine of our state. They are a significant component of our state’s tax base. They employ hundreds of thousands of Ohioans. And, they make important civic, cultural, recreational and educational contributions to the communities in which they are located.

I remember the 1980’s, as I’m sure each of you does. Back then many communities across our state experienced devastating economic blows at the hands of an accelerated corporate takeover movement.

Today, you can’t pick up a newspaper without reading about the challenges many large companies are facing. Because the sum of the parts of some of these companies may appear greater than the whole, they could be considered vulnerable today.

The Ohio Chamber urges you to take this opportunity to adopt the sound public policy approach represented in SB 110. Before there is a crisis, allow these important Ohio companies, should they become the target of a hostile takeover, to have the tools they need at their disposal to make the best decisions possible for their shareholders, their employees, and their communities.

Thank you for the opportunity to express the Ohio Chamber’s strong support for SB 110. I would be glad to entertain any questions you may have.