Editor’s Note: The following post comes to us from Ernst & Young LLP, and is based on a publication by the EY Center for Board Matters.

The recent surge in shareholder activism continues to keep boards on alert heading into the 2015 proxy season. Some companies are taking proactive measures to prepare for potential activist investor campaigns, including engaging long-term institutional investors.

Based on what we’re hearing from long-term institutional investors, these efforts are worthwhile in that they foster constructive relationships and alignment with key shareholders.

The EY Center for Board Matters (the Center) recently had conversations with 50 institutional investors, investor associations and advisors on their corporate governance views and priorities. We also gained insights from investors, directors and other stakeholders through our proxy season dialogue dinners.

This post is the second in a series of four posts based on insights gathered from those conversations and previewing the 2015 proxy season. The first post (available here) focused upon board composition. The upcoming two will focus on proxy statement disclosures, and the shareholder proposal landscape.

In addition to the Center’s investor outreach, the report draws on our tracking of governance trends and emerging developments through the Center’s proprietary corporate governance database.

Key Findings
• When companies engage with long-term institutional investors and demonstrate responsiveness to their concerns, those same investors are better positioned to support the company in an activist situation and may prove to be the company’s strongest allies.
• Most of the investors we spoke with believe that whether activism is beneficial over the long term depends on the particular circumstances involved.
• Some investors suggested that activists are incorporating governance changes as an afterthought to appeal to long-term institutional investors—not out of a genuine commitment to enhance corporate governance.