Starboard, an activist shareholder, is challenging Autodesk's (ADSK.US) board in a proxy battle to drive change.

Activist investor Starboard Value has launched a proxy battle for Autodesk (ADSK.US), the design software maker, and plans to nominate director candidates for election at the company's upcoming annual meeting. The aggressive investor said that a board overhaul is needed to "instill accountability, rebuild credibility, restore investor confidence, and improve performance." Starboard owns $500 million worth of Autodesk shares and said it remains willing to work with the company to reach a constructive solution.

In a letter to Autodesk shareholders, the hedge fund highlighted the stock's poor performance (down 11.4% year-to-date) and the need to improve margins and profitability. Starboard endorsed Autodesk's restructuring plan, which includes layoffs, plant closures, and reallocating resources to key areas such as artificial intelligence.

Starboard said: "While these actions are a step in the right direction, there are significant questions about the financial impact of these actions and how much benefit will ultimately be realized in fiscal 2026 and beyond."

The firm also noted that Autodesk's disclosures were misleading and that corporate governance was poor, with "stunning" lack of accountability from management to shareholders. These concerns stem from Autodesk's billing practices that inflate key financial metrics such as free cash flow, including discounts offered to customers willing to pay early for multi-year contracts. Starboard believes the company has yet to hold management accountable for such actions, despite calls for it to do so.