Potential Red Flags

by | Apr 17, 2026

The Boardroom Alpha platform surfaces potential red flags at the corporate and executive level to help subscribers quickly identify risks. The below is a listing of red flags that they Boardroom Alpha platform surfaces for its users.

 

Accountants

Independent Registered Public Accountant Dismissed Independent Registered Public Accountant Dismissed
Independent Registered Public Accountant Resigned Independent Registered Public Accountant Resigned

 

Activism

Contested Proxy Company has a contested proxy filed
High Activism Vulnerability Score BA Activism Vulnerability Score > 75
Cooperation Agreement Execution of a cooperation agreement between a target company and an activist investor.

 

Bankruptcy

Company Bankruptcy Company has filed for brankruptcy
Person bankruptcy history Person was board member or officer of a company who filed bankruptcy 

 

Earnings

Earnings guidance withdrawn Company withdraws previous earnings guidance

 

Governance

Overboarding Risk

Directors are considered overboarded at a company if either of the following criteria are met:

  1. The person is a director at 2 or more other companies AND CEO at one or more other companies 
  2. The person is a director at 4 or more other companies
Classified Board If a company’s board of directors are classified and not elected annually
Multi-class shares Company has share classes with different voting rights
No lead independent director If the company’s board chair is non-independent and there is no lead independent director
Chairman is not independent The company’s chairman is non-independent
Entrenched Board

More than 35% of a board has a tenure > 15 years

OR

4 or more directors with a tenure > 15 years

OR

4 or more directors are aged 70 or higher

OR

more than 22% of the board has a tenure > 15 years AND more than 15% of the board is aged 70 or higher
Potential Share Pledging Company potentially allows the pledging of its own shares for personal use
Limited Outside Board Experience
Less than 1/3 of board has public company experience of over 2 years at 1 or more companies

 

Insider Trading

Insider’s selling more than 2.5x more than sector median Over previous 12 months
Significant profiting from company Insiders Share price has underperformed since insider sales, across multiple insiders

 

Judgements

SEC Enforcement Related SEC enforcement judgement levied against the company
Class Action Filed Class action lawsuit filed against the company

 

Exchange Listing Rule Violations

Listing Rule Violation: Average Closing Price Rule Classified via SEC Filings
Listing Rule Violation: Failed to File Annual/Quarterly Report Classified via SEC Filings
Listing Rule Violation: Market Value of Listed Securities Rule Classified via SEC Filings
Listing Rule Violation: Market Value of Publicly Held Shares Rule Classified via SEC Filings
Listing Rule Violation: Minimum Bid Rule Classified via SEC Filings
Listing Rule Violation: Minimum Net Income Rule Classified via SEC Filings
Listing Rule Violation: Minimum Public Holders Rule Classified via SEC Filings
Listing Rule Violation: Minimum Stockholder Equity Rule Classified via SEC Filings
Listing Rule Violation: No Annual Meeting Classified via SEC Filings

 

Market Performance

Underperformance Company’s stock has underperformed its most relevant market index over the given time period
All time low Company’s stock closed at an all-time low price
52-week low Company’s stock closed at a 52-week low price
Significant stock drops Flags major one-day net stock drops for companies over its history, > 15%
Material stock drops Flags major one-day net stock drops for companies over its history, 5 -15%

 

Executive Tenures

Involuntary Leave Person was asked to leave involuntarily
Immediate Resignation Person immediately resigned
Short Tenure CEO / CFO tenure < 2 years
Executive terminations Company terminated an executive or director

 

Say-On-Pay

Failed Vote Say-on-pay vote received < 50% in favor
Negative Vote Say-on-pay vote received < 90% in favor

 

SEC Correspondence & SEC Investigations

CORRESP Correspondence from the company to the SEC
UPLOAD Correspondence uploaded from the SEC to the company
SEC Investigation Related Filing pertaining to an SEC investigation

 

SPACs (Special Purpose Acquisition Company)

High SPAC Redemptions > 50% of a given SPAC’s trust was redeemed
Sponsor High SPAC Redemptions SPAC Sponsor has had a SPAC with > 50% redemptions
Low Sponsor Returns Sponsor has a DeSPAC with lower than -30% returns since DeSPAC
Terminated Deal SPAC has had a terminated definitive agreement

 

SEC Filings Related RED FLAGS

Abnormally High 8-K Filings Abnormally High 8-K Filings
Amended Filing in Last Year Amended Filing in Last Year
Cooperation Agreement Cooperation Agreement
Deceased Person Disclosure Deceased Person Disclosure
Dividend Suspension/Withdrawn Dividend Suspension/Withdrawn
Earnings guidance withdrawn Earnings guidance withdrawn
Executive terminations Executive terminations
Failed to file annual/quarterly report Failed to file annual/quarterly report
Furlough/Layoffs Furlough/Layoffs
GSA-OIG Investigation Related GSA-OIG Investigation Related
HHS-OIG Investigation related HHS-OIG Investigation related
HUD – OIG Investigation Related HUD – OIG Investigation Related
Involuntary Leave Involuntary Leave
Merger Agreement Merger Agreement
Office of Global Security Risk Office of Global Security Risk
Potential Share Pledging Potential Share Pledging
Section 220 Disclosure Section 220 Disclosure
State Dept. OIG Investigation State Dept. OIG Investigation
Terminating Review Terminating Review
Universal Proxy Related Universal Proxy Related
Unresolved Comments Unresolved Comments
Upcoming Merger Approval Vote Upcoming Merger Approval Vote
VA-OIG Investigation Related VA-OIG Investigation Related
Warrant Redemption Warrant Redemption
Workforce Reduction Workforce Reduction
Executive terminations Executive terminations
ISS/Glass-Lewis Recommendation ISS/Glass-Lewis Recommendation
Material Failure In Submission Material Failure In Submission
People Moves People Moves
PPP Loan PPP Loan
Rule 10b5-1 Entered Rule 10b5-1 Entered
Short Tenure Short Tenure

 

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