The Changing Face of Activism

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2021”.

As we enter 2021, shareholder activism continues to evolve. The traditional campaigns waged by repeat activists leveling familiar critiques will undoubtedly persist into the new year and beyond. But by now most companies are well-versed in the old activist playbook and have developed their own game plan. In past years, some became their own activist and dismantled or reshaped their companies before the first shot was fired. Others rightly believed their strategic plan was the right path and focused on execution while remaining on high alert and preparing behind the scenes in the event an activist emerged. And still others became ensnared in activist attacks and sought a truce unless the price of peace was too great. Against this backdrop, a new world of activism with a different set of rules continues to emerge. In the coming era, we expect that activist-like fire will come from new directions, shareholder engagement will become more visible and louder, and ESG and stakeholder purpose in many cases will be the tip of the spear. This is the activist landscape that boards must be prepared to navigate in 2021.