This archive report was first published on 8 December 2019.
On December 8, 2019, Business Daily Africa published an article highlighting the importance of investor activism in corporate governance.
According to the article, investor activism is often viewed as a nuisance by corporate executives, who see it as an attempt to interfere with their decision-making processes.
However, the article argues that activist shareholders play a vital role in promoting shareholder democracy and constraining managerial misbehaviour.
Activist shareholders, who bear the costs and benefits of a company's decisions, have a vested interest in ensuring that the corporation is run in a way that maximises shareholder value.
By advocating for proper governance, activist shareholders can help to identify corporate weaknesses and promote value creation.
Instead of viewing activist shareholders as a threat, corporate boards should see them as a valuable source of feedback and guidance.
By engaging with activist shareholders and responding to their concerns, corporate boards can develop robust corporate models that are responsive to the needs of investors.
