How to ward off a corporate activist

Author: Lizzie Meager | Published: 5 Mar 2019

The best way to avoid being targeted by shareholder activism is quite simply for company directors to be their own activists, according to investment firms.

Companies can pre-empt their arrival by following corporate governance best practices, such as regularly refreshing the board of directors with a focus on skills, according to panellists at The Deal’s 2019 Corporate Governance Europe conference in London last week.

But while the kneejerk reaction of a management team might be to resist activists, there are a number of benefits to being targeted.

"Activism is governed by the clear motivation of wanting to make money, and I can’t think of many human interactions that are much clearer than that," said Thomas Davies, senior partner at consultancy firm Kekst CNC.

"Bear in mind that once an activist shows up, they are not a pariah – they are a representative of the shareholder base," added Davies....