Securities Litigation partner Michael Lohnes partnered with Marsh FINPRO Directors and Officers Liability Product leader Sarah Downey to publish a report on the impact of new shareholder activist demands for corporations and their directors.
The report states that the number of campaigns against US-listed companies fell slightly in the first half of 2019; however, shareholder activism remains a significant issue for companies and their directors and officers. And while activity in the US has slowed, campaigns are increasing outside of the US, signaling a rise in shareholder influence internationally. With the success of these campaigns, the balance of power between shareholders and boards of directors continues to shift. As a result, companies should be aware of the new demands shareholders are making of boards, management and directors across all industries.
The report goes on to address the following:
- The increase in activist campaigns driven by mergers and acquisitions.
- The focus of these campaigns on promoting diversity and changing corporate policies regarding minority representation and gender equality.
- The increased concentration of campaigns on environmental issues and sustainability.
- Long slate nominations and the decline of director support.
- Recent campaigns geared toward appointing employee representatives to corporate boards.
- Responding to and defending against campaigns through D&O insurance.