Skip to Main Content

Spencer Stuart Director Pulse Survey: Activism Preparedness

March 2023

With proxy season looming, we surveyed directors for their insights on their board’s activism preparedness. Directors of nearly 360 public companies responded, and nearly all reported having some sort of activism action plan. More than half gave their board’s preparedness plan high marks.

According to the surveyed directors, the five most common “activism preparedness” action steps are:


Only 30% reported conducting a “tabletop” exercise to identify vulnerabilities and possible responses.

When it comes to external support, three-quarters of respondents said their board has identified outside legal counsel, while two-thirds have identified an investment bank or financial adviser. Fewer than half said the board has identified a communications firm for assistance.

Most of the surveyed public directors have taken action in response to the U.S. Securities and Exchange Commission’s new rule mandating a universal proxy ballot in contested elections. Nearly 40% reviewed the corporate bylaws, and another 23% amended the bylaws.

Directors monitor investor sentiment by listening to quarterly analyst calls (82%) and receiving regular updates on management meetings with shareholders (78%) and the shareholder base (76%).

1. On a scale of 1-5, how would you rate your board’s action plan to respond to an activist seeking changes to the board? (1 being no plan, 5 being a well-defined action plan)
How are boards preparing for an activist situation? Most have identified outside advisers and enhanced shareholder engagement.
2. What actions has the board taken to prepare for an activist situation? (Select all that apply)
Identified advisers 66%
Enhanced shareholder engagement practices 63%
Enhanced proxy disclosures 55%
Changed board composition 47%
Upgraded board assessments 46%
Conducted tabletop exercise (e.g., analyze business and governance vulnerabilities as an activist might) 30%
None 8%
Other 4%
Boards are more likely to have identified outside law firms/counsel for activist situations.
3. Please select the advisers you have identified to work with in an activist situation. (Select all that apply)
Outside law firm/counsel 75%
Investment bank/outside financial adviser 64%
Communications firm 41%
Proxy solicitor 24%
None 12%
Search firm 5%
Other 1%
Directors report taking a variety of approaches to familiarizing themselves with shareholders and their views on company performance.

Regular updates from management on the shareholder base, management meetings and joining quarterly earnings calls are all common approaches.

4. In the last 12 months, what has the board done to familiarize itself with its shareholders and their view on company performance? (Select all that apply)
Listened to quarterly earnings calls 82%
Received regular updates on any management meetings with shareholders 78%
Received regular updates on the shareholder base 76%
Participated in shareholder engagement 40%
Participated in/attended investor day 30%
Invited shareholder(s) to speak at a board meeting 9%
None 1%
Other <1%
The majority of public companies in our survey took some action in response to the UPC by reviewing or amending bylaws.
5. What actions to your bylaws has the board taken in response to the universal proxy card rule? (Select one)

* Percentages may not total 100% due to rounding.

Related Insights