In 2025, shareholder activism is on the rise, and activist investors are preparing for a significant increase in corporate engagement. After a slower-than-expected second quarter in which only 59 new activist campaigns were initiated—a 16% drop compared to the previous quarter—investors are now gearing up for more aggressive strategies. With global markets stabilizing and an uptick in dealmaking activity expected in the second half of 2025, activist investors are anticipated to ramp up their efforts, focusing on governance reform, operational improvements, and unlocking shareholder value in underperforming companies.
Key Areas of Focus for Activist Investors
Activist investors—individuals or groups who push for change within companies to unlock shareholder value—are expected to focus on several high-priority areas:
Boardroom Reforms: One of the main focal points for activists continues to be the composition of corporate boards. Shareholders are pushing for greater diversity, independent directors, and leadership that holds management accountable. In fact, around 43% of campaigns launched last year targeted corporate boards, a trend that is set to continue as investors demand more influence over decision-making.
Mergers, Acquisitions, and Spin-Offs: With increased confidence in global dealmaking, activists are likely to target companies that they believe would benefit from mergers, acquisitions, or spin-offs. By breaking up large corporations or initiating M&A transactions, activists aim to unlock value that they feel is being underutilized. Activists are also likely to push for more strategic acquisitions that could drive long-term growth.
Operational Efficiency: Operational improvements will be a top priority for activists. Companies that are seen as inefficient or underperforming relative to their peers are prime targets for activist intervention. Investors will push for cost reductions, restructuring, and the implementation of leaner business models, driving companies to improve profitability and shareholder returns.
Corporate Response to Activist Engagement
Companies are now more proactive than ever in responding to activist demands. While proxy battles—high-profile campaigns in which shareholders vote on board members—are less common than they once were, companies are increasingly focusing on behind-the-scenes negotiations. As shareholder activism continues to grow, firms are realizing that it’s better to engage with activists early on and find mutually agreeable solutions rather than face public battles that could damage the company’s reputation.
Some companies are now adopting preemptive strategies, such as regularly assessing their board composition, improving operational transparency, and ensuring that their corporate strategies are aligned with shareholder interests. This shift in corporate strategy reflects an acknowledgment that engaging with investors proactively can be beneficial in the long run.
The Role of Institutional Investors
The support of institutional investors—such as pension funds, mutual funds, and hedge funds—is crucial to the rise of activism in 2025. These investors have become more vocal in their backing of activist campaigns, recognizing that shareholder activism can drive long-term value creation. The increasing role of institutional investors is transforming activism from a niche strategy into a mainstream tool for holding companies accountable and driving performance improvements.
Corporate Strategy in the Age of Activism
As activists continue to gain traction in the marketplace, companies must rethink their corporate governance and engagement strategies. Proactively communicating with stakeholders, being transparent about performance, and aligning business strategies with shareholder interests will be key for businesses aiming to avoid confrontation with activist investors.
