Insight

Engaging with activist investors:  2019 European corporate survey

April 2019
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As European executives’ concern over activism rises, over half admit they lack a clear strategy to deal with activist approaches:

  • Almost 70% of senior executives report concern about the rise of activism
  • 65% say that the importance of activism has increased – or dramatically increased - on companies’ priority lists over the last year
  • However, 53% admit that they lack a clear strategy for dealing with activism and only 10% rate their ability to meet the challenge as high
  • Boards must focus constantly on “The 5Cs” in their power to combat the activist threat and adopt an ongoing “Activist Mindset” of their own

Engaging activist investorsSource: AlixPartners EMEA survey results 2019

With the continued prominence and success of activist investors across Europe, a survey by AlixPartners of over 500 public company board-level execs finds that while the majority of companies are concerned, only one third feel that they have the expertise to deal with an activist approach. As they spoke to us on condition of anonymity, AlixPartners has gained an honest insight into these worries, which fall under three main themes.

  1. Internal strategy and capabilities
  • 53% of executives admitted that they lack a clear strategy for dealing with activists.
  • One executive surveyed commented, “Boards should have a policy, a strategy but many (us included) just don’t.”
  1. Cost barriers
  • According to one executive in the survey, “When you formalise, it means you immediately need to start baking things into plans that have cost and margin implications. In fact, even the process of understanding the implications brings cost.”
  1. The changing nature of the activist threat
  • Technology and other market and political forces have facilitated a greater impact of activist approaches.
  • Executives commented in the survey:  “Things have changed. To some degree it has crept up on us.”   And, “These days it is easier to stir up activism. Like-minded groups are instantly connected and able to mobilise.”

AlixPartners offers the "5Cs" approach to preparing a corporate for any future activism activity.  Readiness is key to optimizing the opportunity presented by activist investors. 

Download the full survey results to learn more, and see if your organization is at risk.  Contact the authors of this survey report for more information.

For more information on managing corporate activism, please also see:

  • European Survey Press Release:  As European executives' concern over activists rise, over half admit they lack a clear strategy to deal with approaches
  • Retail Viewpoint: Your lack of activist appeal might be telling you something
  • Impact on German Supervisory Boards: Activist investors prompt critical discussion, finds our „Aufsichtsrats-Radars 2019“ (2019 Supervisory Radar) study (in German/auf Deutsch)
  • Americas analysis:  Rise in shareholder activism reinforces why companies need to act

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