Cambridge Business Association
To Defeat an Activist Investor, Think Like One
Report

To Defeat an Activist Investor, Think Like One

Jody Foldesy, Gregory Rice and Simon Weinstein
Boston Consulting Group, 2021
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Overview

Recommendation

After a COVID-19 hiatus, the activist shareholder is back in full force. Investor campaigns have grown in number across the world and are increasingly successful. The activist investor is savvy, with many tools at hand to exploit company vulnerabilities. Experts at the Boston Consulting Group advise managers to think like their aggressors in setting strategies to defend against shareholder activism. Chief executives, board members and senior managers will find this an instructive report on what to do before activists come calling.

Summary

Corporate managers are facing reinvigorated, reorganized activist shareholders.

Shareholder activism has rebounded with a vengeance: Campaigns in the fourth quarter of 2020 were up 50% over the third quarter, and statistics for the first quarter of 2021 showed activist fervor back to its pre-COVID-19 levels. The make-up of campaigns and their participants has changed, with battles now occurring worldwide – almost half are fought outside the United States – and with institutional investors playing a greater role and having a louder voice. Today’s activists pursue environmental, social and governance (ESG) agendas, and they are securing more victories than in the past, markedly increasing their board...

About the Authors

Jody Foldesy, Gregory Rice and Simon Weinstein are professionals with the Boston Consulting Group.

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