ACTIVISM WAS MORE OFTEN DRIVEN BY ONE-OFF SITUATIONS Of those Canadian activist situations that did arise in 2020 H1, the highest proportion (almost one-third) was driven by “concerned shareholders,” meaning individual shareholders or groups of shareholders that attempted to effect change typically at a single company in response to poor performance or other grievances, as shown in Figure 4-3. 84 Concerned shareholders can be distinguished from a variety of other types of activists – for example, those with a primary, partial or occasional focus on using activism as an investment strategy or engaged shareholders that escalate their otherwise typical investment stewardship responsibilities only to protect and enhance shareholder value at companies within their portfolio. 85 Typically, “one-off situations” are advanced by former directors or management, or other insiders or related parties. This year represented the highest proportion of one-off activist situations in the last eight years, and is a continuation of a trend toward an increase in the proportion of one-off activist events and the proportion of insider-driven activist situations. We expect that these one-off activist situations may have arisen in 2020 regardless of the pandemic, although COVID-19 may have caused some shareholders that might otherwise have remained silent to make their demands public.
FIGURE 4-3: P ublic Demands to Canadian Issuers by Activist Focus (2013 H1–2020 H1)
50%
40%
30%
20%
10%
0%
2013 H1
2014 H1
2015 H1
2016 H1
2017 H1
2018 H1
2019 H1
2020 H1
Demand Year
Primary/Partial Focus
Occasional
Engagement
Concerned Shareholder
Source: Activist Insight
54
Governance Insights 2020
Powered by FlippingBook