Member Thought Leadership
The article explores how the SEC’s 2022 mandate for universal proxy cards has intensified shareholder activism, with a record number of campaigns and CEO turnovers in recent years. Although activists still win a minority of contested board seats, dissident slates remain their primary tool, making thorough due diligence on insurgent nominees increasingly important. The article emphasizes the need to go beyond basic background checks to uncover hidden relationships, governance track records, and even problematic personal behavior that may undermine a nominee’s claims of independence.
It also highlights the strategic value of understanding nominees’ business histories and motivations, particularly as most activist situations are resolved through negotiation rather than a vote. Management that understands both insurgent and incumbent candidates at a deep level can better shape outcomes in board disputes. As activist campaigns expand beyond traditional players, due diligence becomes a crucial advantage in navigating complex power dynamics.
