Board Strategy in a New Era of Activism

No company—whether public or private—is beyond the reach of an activist challenge. Historically, activist investors primarily targeted underperforming or distressed public companies, seeking to enhance shareholder value through tactics like leadership or board changes and restructurings.

Today, activists are combining these approaches with sophisticated “issue-based activism,” while new types of activists have emerged to challenge company practices and performance. Consequently, both public and private companies are facing pressure from a broader group of activist stakeholders on issues beyond financial outcomes.

As one director noted, “While activism has been part of the fabric of our democratic society since the beginning, it has widened to such an extent that it now demands effective board monitoring, oversight, and engagement.”

A Widening Group of Activists and Diverse Agendas

Political shifts—shaped by changing public sentiment and amplified by vocal activism on hot-button issues—are increasingly driving stakeholder engagement and broadening the focus of shareholder proposals. Shareholder proposals on climate change and diversity-related issues (both pro and con) were among the five-most-prevalent shareholder proposal topics in 2024. In fact, environmental and social proposals made up 62 percent of all proposals, an increase from 44 percent 10 years ago. This rise is largely due to the growing number of “anti-ESG” proposals, which reached a record high of 108 in the past year; however, support levels were in the low single digits.