A New Playbook on Activists

By Peter Lauria

March 26, 2025

Before the activist even asked for the meeting, the board knew what was coming. The investment firm had followed the same playbook in every one of its campaigns, and from the moment it took a position in the stock, the board had been watching closely. The directors took a new approach to a potentially public fight: They reached out to the activists in advance. 

Activist campaigns have certainly been—as the name implies—active recently, with a record number last year and more continuing in early 2025. Company performance, which used to be the basis for these moves, hardly figures into the calculation anymore. Activists show up at healthy companies just as often as they do at turnaround candidates, producing significant disruptions. “The worst thing for a CEO is to have an activist show up and be surprised,” says Joe Griesedieck, vice chairman and managing director of  board and CEO services at Korn Ferry. 

That’s where more boards are starting to come in. Instead of the CEO, experts say, it’s directors who are  doing most of the dealing with these groups. And so far, the new approach appears to be working. While activist campaigns are up, proxy fights are down. Data shows that 42 percent of activist campaigns ended in a settlement last year, and most of those were agreed to before the launch of a proxy fight. At the same time, the number of board seats won by activists in settlements has remained steady, at 1.8 per campaign. Even more unusual, in numerous instances, activists have won board seats by collaborating, rather than clashing, with management. 

Experts say most boards have gotten savvier about countering activists’ strategies and tactics.  Dennis Carey, vice chairman and co-leader of board services at Korn Ferry, says boards are studying activist trends and building “knowledge pipelines” to defend areas vulnerable to attack. Data shows that most activist attacks focus on unlocking value, changing leadership of the board, and ESG issues. Carey says boards are forming response teams so that they are prepared and consistent in how they address activists’ concerns. “Activists don’t know what actions boards have already considered,” he says.

To be sure, activist investors aren’t going away anytime soon. Revenues at firms continue to grow more slowly than they have in years, a sore point among investors certain there are better avenues. Changes to SEC rules that make it easier to mount activist challenges, coupled with an abundance of cash-rich firms, have also increased the number of potential threats for CEOs and boards. That makes it even more important for boards to distinguish between an activist sincerely looking to unlock value and one who’s just trying to aggressively target short-term gains, says Tierney Remick, vice chairman and co-leader of  board and CEO services at Korn Ferry. “Who is there to create value, and who is there to create a distraction?”

Photo Credits: Oleksandr Shnuryk/Getty Images