Shareholder Activism and Board Governance: Strategic Implications for Value Creation

In the evolving landscape of corporate governance, shareholder activism has transitioned from a disruptive force to a strategic lever for value creation. As institutional investors increasingly prioritize long-term value and environmental, social, and governance (ESG) criteria, corporate boards must adapt to navigate activist campaigns effectively. At the forefront of this shift is Jon Feldman, partner at Goodmans LLP and a leading voice in shareholder activism, whose insights at the LA CorpGov Forum 2025 underscored the critical role of board preparedness and proactive engagement in transforming activism into an opportunity for governance innovation.

The Evolving Dynamics of Shareholder Activism

Feldman’s session at the LA CorpGov Forum highlighted a pivotal trend: the Canadian market has seen a surge in shareholder activism, driven by ESG-focused campaigns and the rise of activist funds with permanent capital. According to Feldman, “Activism is no longer a niche phenomenon—it is a central consideration for corporate boards, requiring advanced notice provisions and bylaws to manage risks while fostering dialogue with shareholders” [1]. This aligns with broader global trends, where activists increasingly target well-performing companies on governance and sustainability issues, even when financial performance appears robust [2].

Goodmans LLP’s experience in cross-border activism further illustrates this complexity. The firm has advised boards and shareholders in high-profile proxy contests, emphasizing that activism is not inherently adversarial. For instance, Feldman noted that “activists often bring fresh perspectives on board composition and ESG strategies, which can catalyze meaningful improvements in corporate performance” [3]. This duality—activism as both a challenge and a catalyst—demands that boards adopt a dual strategy: defending against short-term pressures while leveraging activist insights to enhance governance frameworks.

Board Resilience: From Defense to Opportunity

CorpGov’s agenda on board resilience emphasizes that proactive governance is key to turning activism into a strategic asset. One core strategy is maintaining strong relationships with institutional shareholders. As highlighted by State Street Global Advisors (SSGA), boards that demonstrate responsiveness to investor concerns—particularly on ESG issues—tend to secure greater support in proxy contests [4]. For example, SSGA’s 2023 proxy voting guidelines explicitly prioritize companies with transparent ESG practices and diverse board nominees, signaling a shift toward aligning governance with long-term value creation [5].

Another critical tool is the universal proxy rule, which allows shareholders to “mix and match” nominees from both company and activist slates. This mechanism, Feldman argued, “amplifies shareholder voice and encourages boards to incorporate diverse perspectives, including ESG expertise, into their decision-making” [6]. By embracing such reforms, boards can preempt activist campaigns and position themselves as stewards of inclusive governance.

Case Studies in Proactive Governance

Goodmans LLP’s work in Canada provides concrete examples of how proactive governance mitigates activist risks. In one case, a publicly traded energy company faced pressure from an ESG-focused activist demanding a board refreshment and a shift toward renewable energy investments. Rather than resist, the board initiated a dialogue with the activist, leading to the appointment of ESG specialists and a revised sustainability roadmap. This collaborative approach not only averted a proxy contest but also enhanced the company’s reputation among institutional investors [7].

Similarly, CorpGov’s research underscores the importance of board independence and transparency. Companies with independent audit committees and risk-management units reporting directly to the board—akin to SOX-style oversight—have demonstrated greater resilience in activist scenarios [8]. These structures ensure that governance teams can swiftly address concerns without undue influence from management or shareholders, fostering trust in the board’s stewardship.

Strategic Implications for Investors

For investors, the takeaway is clear: boards that proactively engage with shareholders, integrate ESG criteria, and embrace structural reforms are better positioned to navigate activism and drive long-term value. Feldman’s insights at the LA CorpGov Forum reinforce that “the best defense is a strong offense—boards must anticipate activist pressures and align their strategies with investor expectations” [9]. This alignment not only mitigates risks but also unlocks opportunities for innovation, such as leveraging activist expertise to enhance operational efficiency or market positioning.

In conclusion, shareholder activism, when met with strategic foresight and governance agility, can serve as a catalyst for corporate transformation. By adopting the principles of transparency, inclusivity, and ESG integration, boards can turn activism from a threat into a powerful tool for value creation.

Source:
[1] Jon Feldman at the LA CorpGov Forum 2025, [https://www.goodmans.ca/insights/event-item/jon-feldman-at-the-la-corpgov-forum-2025]
[2] 2021 | Page 76, [https://corpgov.law.harvard.edu/2021/page/76/]
[3] Jon Feldman's Post, [https://www.linkedin.com/posts/jon-feldman-3a2b881_capitalmarkets-shareholderactivism-corporategovernance-activity-7267210908249055234-i29C]
[4] Introduction: A Critical Juncture for Shareholders, [https://corpgov.law.harvard.edu/2022/11/page/6/]
[5] Committee of Concerned Shareholders, [https://www.concernedshareholders.com/]
[6] Jon Feldman at the LA CorpGov Forum 2025, [https://www.goodmans.ca/insights/event-item/jon-feldman-at-the-la-corpgov-forum-2025]
[7] State of Shareholder Activism in Canada, [https://missionmatters.com/state-of-shareholder-activism-in-canada/]
[8] Enhancing Corporate Governance through Effective Oversight and Accountability, [https://www.researchgate.net/publication/381101359_Enhancing_Corporate_Governance_through_Effective_Oversight_and_Accountability]
[9] Jon Feldman's Post, [https://www.linkedin.com/posts/jon-feldman-3a2b881_capitalmarkets-shareholderactivism-corporategovernance-activity-7267210908249055234-i29C]