The Evolving Battlefronts of Shareholder Activism

Shareholder activism—the practice of shareholders engaging in a campaign to influence corporate actions—has long been a controversial topic in corporate governance. Supporters of activism view activist investors as important players in the capital markets, holding insiders (board members and management) accountable, imposing efficiency, and mitigating agency problems. Critics view activists as opportunists: shareholders with a short-term horizon who take temporary ownership in a target to push through changes or lobby for a quick sale to realize short-term increases in stock price without regard to long-term value creation.