Strength In Numbers

The influence of activist investors is on the rise

- Susan Hely

Australian investors have a lot to thank vocal shareholder activists for. Activists play a crucial role in shining a spotlight on poor corporate behaviour that could be dampening down the share price. By persuading shareholders to join in a proxy fight, activists can force companies to cut undeserving director and manager remuneration, explain their environmental policy, broaden the diversity on the board and address other high-profile issues.

Activists have ammunition such as the two-strikes rule, and when they mobilise and pool 5% of listed shares they can force companies to make changes that improve shareholder value and boost the share price.

PLAN YOUR STRATEGY

If you hold shares, either directly or through your self-managed superannuation fund, there are ways to flex your investor muscle. With the annual general meeting season on the horizon, from September to the end of November, there is no better time to plan your strategy and make your vote count.

“Annual meetings are the retail investors’ forum, where they get to eyeball the directors and ask the board questions,” explains Judith Fox, CEO of the Australian Shareholders’ Association (ASA). Retail share investors have a view that their vote doesn’t count but she insists it does, particularly when it is aggregated with those of other small investors.

JOIN THE COMMUNITY