Originating from North America during the 1980s, investment activism has become a more prominent and likely permanent feature of the corporate landscape. The term refers to shareholders who are taking a range of actions to leverage their ownership position to influence company behavior, often advocating for changes to the company, including corporate governance practices, financial decisions and strategic direction with the aim to augment profit by means of management optimization and share value increase. This movement is being driven by, inter alia, a search by hedge funds of the new investment opportunities and a cultural shift toward increased shareholder engagement. As shareholder activism continues to diversify and increase its global footprint, it is important for legal practitioners to understand the legal framework of this emerging trend.
Our firm has, on the one hand, advised activists in successfully affecting dramatic change and unlocking shareholder value, including by unseating recalcitrant directors and removing entrenched management and on the other, proactively protected the companies’ interests, including devising governance structures and takeover preparedness strategies.
A recent highlight of our practice is representing the minority shareholders of a listed company, before the company’s annual General Assembly meeting in order to exercise the minority rights for the enhancement of shares value, cost and dividend optimization.