Managers Engage ICN In Proxy Battle Board Balance May Tip Franklin and Iridian trying to lift shareholder value with shareholder activism.(MUTUAL FUNDS)

Byline: CLAIRE MENCKE

In the end, it may be that owners of companies -- shareholders -- can take the fastest and most direct action when they see corporate governance going off the track.

That was what Tim Rankin and David Winters of fund firm Franklin Mutual Advisers thought last year. Then, these value-oriented investors were mulling taking a position in ICN Pharmaceuticals.

At ICN's 2001 annual meeting, dissident shareholders put forward three candidates for a 12-member board. The dissidents won.

Those moves encouraged Rankin and Winters.

"I'd followed ICN for about 10 years," said Rankin. He'd seen a firm with good products that could generate strong cash flow. He'd also noted that the stock was priced below its peers.

"But I'd never been willing to get involved before because of the reputation of its top management for self-dealing," Rankin said.