An activist shareholder is an individual or group that buys large numbers of a public company’s shares and/or tries to obtain seats on the board with the goal of impact change within the company. Activist shareholders often take on a contentious role, as they may clash with management over issues such as strategy, finance, and governance.
While some activists may simply want to improve the operations of the company for the benefit of all shareholders, others may have ulterior motives, such as attempting a hostile takeover. In either case, activist shareholders can exert significant influence over a publicly traded company.
The rise of activist shareholders has been fueled by a number of factors, including increased deregulation, globalization, and the growth of hedge funds. As such, activist shareholders are likely to continue to play a major role in the corporate world.