Shareholder Activitism: 5 Ways Boards Can Prepare And Respond

From Engine No. 1 to Starboard Value’s victory over workforce technology provider Box, shareholder activism is nothing new for today’s boards. What is new: activist attention on — and action against — individual directors.

Starboard Value attributed much of Box’s disappointing results to CEO Aaron Levie, calling the company’s decision to accept a $500 million equity investment from KKR “garbage” in a televised interview. Oasis helped lead the ouster of Toshiba’s chairman after the Japanese conglomerate announced plans — later revised — to spin out its industrial and tech segments into separate companies. On the other side of the world, the Children’s Investment Fund launched a “bareknuckle campaign” to oust the CEO of Canadian National Railway over climate and ESG.

These examples are illustrative of an overarching trend according to recent research by Insightia, a Diligent brand. Across the globe, the number of management director candidates receiving less than 80% support increased from 2020 to 2021: from 1,683 to 1,918 in North America, from 206 to 298 in Europe, and from 535 to 642 in the Asia Pacific region.