Executives take note: activists are sometimes right
Executives need to beware of activist investors. They are better armed than ever before, and they are coming after ever bigger targets. As this year’s proxy season in the US comes into view, with annual meetings and board elections on the agenda, heads of big corporations should no longer assume that they are safe.
Not only that but some of the raiders’ ideas actually make sense. No longer barbarians intent on forcing money out of the company through grotesque financial engineering, the current generation of raiders tend to have done their homework. Like business school students diligently working on a case study, they have good ideas to suggest. So it behoves managements to listen to them, rather than move straight into confrontation.