CHAPTER 04 Shareholder Activism Abates, but Not for Long: Significant Activity and Developments in 2020
ACTIVIST DEMANDS CONTINUED TO FOCUS ON BOARD-RELATED ACTIVISM While overall activism declined in the first half of 2020, the principal objectives of public demands that were made in respect of Canadian public issuers followed a pattern consistent with the prior seven years, with by far the highest proportion being board-related demands, as shown in Figure 4-2.
FIGURE 4-2: P ublic Demands to Canadian Issuers by Type of Activism (2013 H1–2020 H1)
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2019 H1 2018 H1 2017 H1 2016 H1 2015 H1 2014 H1 2020 H1 2013 H1
50
40
30
20
10
0
Balance Sheet Activism
Board-Related Activism
Business Strategy
M&A Activism
Other Governance
Remuneration
Source: Activist Insight
M&A activism, so-called balance sheet activism and activist demands related to business strategy declined substantially in 2020 H1 compared with corresponding periods in prior years. M&A activism was temporarily reduced by the initial halt in M&A activity in March 2020 in response to the pandemic. With respect to demands relating to business strategy, other governance and compensation-related issues, not surprisingly, in the first half of 2020 many activists saw little merit or prospect of success in pushing strategies aimed at value-enhancement within these areas, when most public issuers and investors were focused on survival, and a variety of other factors entirely outside activists’ control were driving issuers’ financial and stock price performance.
While overall activism declined in the first half of 2020, the principal objectives of public demands that were made in respect of Canadian public issuers followed a pattern consistent with the prior seven years, with by far the highest proportion being board-related demands.
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Davies | dwpv.com
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