The director’s guide to shareholder activism
Part I: Introduction Shareholder activism today The nature of shareholder activism, the key players, their preferred methods and their typical targets all tend to shift along with investment and business trends. They are influenced by market pressures, stores of capital and hot topics in governance. But during bull and bear markets, during recessions and times […]
Matt DiGuiseppe is Managing Director at the Governance Insights Center, PricewaterhouseCoopers LLP. This post is based on his PwC memorandum.
Part I: Introduction
Shareholder activism today
The nature of shareholder activism, the key players, their preferred methods and their typical targets all tend to shift along with investment and business trends. They are influenced by market pressures, stores of capital and hot topics in governance. But during bull and bear markets, during recessions and times of growth, activists continue to look for opportunity, and companies continue to find themselves in the crosshairs.
The role of the board in an activist environment is an important one. Directors can help ensure the company anticipates which activists might target the company, and which issues they might raise. By being familiar with activism trends, they can encourage management to proactively address common issues that are attracting attention. In many cases, these issues deserve careful attention and should be reflected in company strategy. The board also plays a key role in shareholder engagement, and in responding to activist requests and demands. What do boards of directors need to know to navigate this environment? What can they learn from shareholders, and how can they leverage the benefits and insights activists can provide?
