”Shareholder Activism & Engagement 2016”

”At the end of another record-breaking year for shareholder activism activity, it is appropriate that we ring in the publication of this, the inaugural edition of Shareholder Activism & Engagement, part of the Getting the Deal Through series. We are pleased to serve as editors of this volume because we believe that shareholder activism is and will remain in sharp focus in financial markets, in the C-suite and in the boardroom, and that shareholder engagement is, and will continue to be, a leading and increasingly sophisticated priority. The international approach of the Getting the Deal Through series is especially apt for this topic, which we expect to become increasingly global over time, with ‘imports’ and ‘exports’ of shareholder activism and engagement between jurisdictions. Although the United States remains its dominant market, such activism and a heightened sensitivity to shareholder engagement is truly a global phenomenon.

The chapters of this volume, written by esteemed practitioners around the world, outline the legal parameters of the shareholder activism and engagement landscape. This introduction takes a step back from the legal intricacies, discusses trends we are observing on the ground and speculates on the area’s future direction.

Evolution of shareholder activism in light of increased “firepower”

In the past year, we have seen hedge fund shareholder activism reach new heights, both in the number of campaigns (estimated at the time of writing as more than 230 campaigns in the United States alone in 2015) to the size and iconic nature of the companies targeted (e.g., AIG, DuPont, General Electric and General Motors). However, that increase is not surprising; since the US’s Great Recession nearly every year has been one of unprecedented shareholder activism. In many ways, the years leading up to and following the Great Recession have been an ideal breeding ground for activists. The corporate scandals of the early 2000s and the financial crisis have left many retail investors sceptical of management teams and the status quo. The years following the Great Recession left some companies with extra cash on their balance sheet (setting the stage for activist campaigns on how that cash should be deployed) and left other companies as apparent laggards to their peers in the recovery (setting the stage for activist campaigns on improving operations and on extreme changes, such as divestitures or a sale of the company itself )……….”

Read full article here  https://corpgov.law.harvard.edu/2016/03/14/shareholder-activism-engagement-2016/

The complete publication is publically available till  April 6, 2016 here: http://www.sifma.org/newsroom/2016/is-japan%E2%80%99s-revitalization-real-and-sustainable_/

Source: Harvard Law School Forum on Corporate Governance and Financial Regulation

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