An Activist on the Horizon

Fidelio’s focus is building Boards “fit for the future”.

For many Boards the arrival of an activist on the register focuses the mind intensely; how ready is the Board? How compelling a case can be made to disgruntled investors disappointed with current performance and uncertain outlook?

The current epidemic amounts to a very large, unplanned, and extremely disruptive experiment on the structure of the global economy: in our view the turmoil it has unleashed is bound to create opportunities for activist investors.

After record levels of activity in 2018 pressure on Boards from activist shareholders abated in 2019. It’s clear from our Board advisory assignments that 2020’s pandemic has occasioned something of a pause in activity as the crisis unfolds.  But with valuations in many sectors now more attractive, bargain-hunting investors are on the prowl, and Boards need to be ensuring that they are prepared for activist attention in the latter part of the year and into 2021.

As ever, the best defence against activism is a proactive Board and robust governance combined with a strong strategic and financial plan. In this Overture we explore how the pandemic is opening the door to activism and what this looks like on a sectoral basis. We also return to Fidelio’s checklist – how Boards can best prepare for an activist approach.

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