Boards beware: as investor activism becomes more prevalent, directors would do well to prepare for the worst—an issue that few companies have properly considered.
They can strike fear into the hearts of boards. They can force an about-turn in strategy, break up a company, or even clear out long-standing and respected members of a boardroom; activist investors make news and have the potential to bring about seismic change.
More importantly for board directors, activist investor activity is on the rise. Hardly a day passes without headlines about an investor leading a very public charge against a board that it believes is underperforming.
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