The recent resignation of Freeport-McMoRan Inc.’s longtime chairman underscores the power of activist investors to shake up underperforming companies. Executives can learn some lessons from this event, practitioners say, including the importance of avoiding conflicts of interest.

James Moffett stepped down on Dec. 28 as chairman of the Phoenix-based natural resources company he co-founded in 1969 due to pressure from famed investor Carl Icahn, who owns about 9 percent of the company. Earlier in the year, Icahn publicly revealed his stake in the company and negotiated with the board to make two of his nominees directors, cementing his influence on Freeport-McMoRan’s governance and strategic direction.

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