What is shareholder activism and how they influence the organization?

Shareholder activism is a way that shareholders can influence a corporation's

behavior by exercising their rights as partial owners. Classes of shares allow for
distinct voting privileges, in addition to dividend entitlements.

Shareholder activists now promote themselves as defenders of shareholder value, holding

management teams and boards accountable for the destruction of (or alleged failure to
maximize) shareholder value.

How do you deal with activist shareholders?

1. Have a Clear Strategic Focus and Stick to It. ...
2. Analyze Your Business as an Activist Would. ...
3. Have Your External Advisers Lined Up in Advance and Familiar with Your
Company. ...
4. Build Board Chemistry. ...
5. Perform in the Short Run Against Declared Goals. ...
6. Don't Dismiss Activist Ideas Out of Hand. ...
7. Doing What's Best for AllYour Shareholders.

What is an example of shareholder activism?

Shareholder activists often include hedge funds or mutual funds that purchase
a substantial stake in target companies intending to reform them and increase
the company's shareholder value. read more and, in turn, benefit from their
investment.

The most common forms of shareholder activism include:

1. Shareholder resolution. This is a proposal that can be submitted by the
shareholders for a vote at the company's annual meeting. ...
2. Proxy Fights. ...
3. Publicity campaigns. ...
4. Negotiations with management. ...
5. Litigation.