Shareholder activists have become increasingly present in the business landscape in recent years, with the purpose of challenging corporate decisions and making the company more shareholder-friendly. This can include a variety of initiatives, such as new and improved dividend payments, changes in strategies and management decisions, improved input on matters of executive compensation and potential takeover of board seats.
The motivations which drive shareholder activists vary, but often involve forcing companies to focus on a better societal welfare, such as investments in environmental protection, human rights or socially responsible business practices. There is also often a financial motivation at play, such as creating better returns in profits, dividends and other payouts, or a perceived lack of value in the current market.
Regardless of the motivations, shareholder activists are typically organized into campaigns that involve a variety of tactics. These may involve officially filing with the SEC, which forces a company to respond, as well as massaging public opinion via social media or media campaigns. Furthermore, strengthening their position with the help of large shareholders who may be politically influential or through the threat of or actual litigation is also commonplace.
The success of shareholder activism has been mixed, with results varying from total victory to complete failure. Not all campaigns are designed to succeed, however; some may be merely designed to migrate the conversation made around a company or to force an immediate response. What is certain is that high-profile campaigns have increased in numbers and the consequences include a variety of indirect investments and social programs, making shareholder activism a powerful tool and an interesting development in the business world.
The motivations which drive shareholder activists vary, but often involve forcing companies to focus on a better societal welfare, such as investments in environmental protection, human rights or socially responsible business practices. There is also often a financial motivation at play, such as creating better returns in profits, dividends and other payouts, or a perceived lack of value in the current market.
Regardless of the motivations, shareholder activists are typically organized into campaigns that involve a variety of tactics. These may involve officially filing with the SEC, which forces a company to respond, as well as massaging public opinion via social media or media campaigns. Furthermore, strengthening their position with the help of large shareholders who may be politically influential or through the threat of or actual litigation is also commonplace.
The success of shareholder activism has been mixed, with results varying from total victory to complete failure. Not all campaigns are designed to succeed, however; some may be merely designed to migrate the conversation made around a company or to force an immediate response. What is certain is that high-profile campaigns have increased in numbers and the consequences include a variety of indirect investments and social programs, making shareholder activism a powerful tool and an interesting development in the business world.