Shareholder Activism: Challenges, strategies and perspectives

Prof. Dr. Katja Langenbucher, Goethe-Universität Frankfurt
Winnie Lerner, Finsbury
Christoph Sieder, ABB Group Ltd.

The tone in the capital market is getting rougher: Shareholder activists (active or aggressive minority shareholders) are increasingly pushing companies to sell certain parts of the company, to realign the strategy or change their management. The second panel therefore raised the question of how companies should react to and prepare for shareholder activism – and which communicative strategies are promising.

First, Prof. Dr. Katja Langenbucher (Goethe-University Frankfurt) discussed the different motives and the instruments available for activist investors in German stock corporation law. Winnie Lerner (Finsbury) added her experience with activist shareholders in the US, where companies have been dealing with the issue for many years.

Christoph Sieder (ABB Group) gave an insight into the experiences of his company with active shareholder last year. In the process, Corporate Communications and Investor Relations had played a central role, by providing clarification and intensifying cooperation with existing investors. In addition, the opportunity to improve the set-up and overall quality of communication was exploited.

Finally, the main topic of the discussion was whether and how companies can prepare for shareholder activism. The central principles is to take activist shareholders very seriously, as their professional public campaigns can put a lot of pressure on the management. The analysis of the activists are so detailed that they can be used by companies as "free consultancy" in order to understand their vulnerabilities. In addition to an analysis of who is a friend or a foe of the company, the panel shared a variety of preparatory possibilities with the company's representatives.