I’m loving this piece posted on the “Cooley M&A” blog entitled “Activism in 2025 and Beyond: Universal Proxy, Litigation Leverage and a New Playbook for Preparedness” that includes a host of nuggets gleaned from a recent “Market Talks” panel featuring Cooley’s Bill Roegge, Jamie Leigh and Sean Brownridge, as well as Goldman Sachs’ Neil Rudisill and Collected Strategies’ Jim Golden. Here’s an excerpt:
Universal proxy + withhold campaigns + litigation = a new settlement dynamic
- Better nominees, more committees: Activists are winning more through settlements – often by adding highly qualified independent directors to their slates and demanding the formation of board committees with strategic or operational mandates – than at the ballot box.
- Control slates are harder: Mix-and-match voting under universal proxy makes partial refreshes easier and full control slates harder, nudging both sides toward negotiated outcomes.
- Swarming persists: Multiple funds engaging “in parallel” (and often without formal “group” formation) amplifies pressure. Golden called it the end of the “stonewall” era: “Access to management and boards happens faster,” and boards are “open to the idea of communicating with would-be activists.” Swarming, Brownridge noted, “puts a lot of pressure on the company when it comes to determining how to resolve a situation, how to settle and what the settlement actually looks like.”
Preparedness: ditch the static playbook of decades past
Cooley partner Jamie Leigh framed it simply: “Make defense and engagement more real, more real-time and more germane to the business.” In practice:
Board readiness
- Run an activist’s playbook on yourself quarterly: total shareholder return (TSR) vs. peers (1/3/5 years), capital allocation, R&D/capex discipline, governance pain points (tenure, skills mix, say-on-pay support, individual director performance).
- Maintain an internal pipeline of directors and refresh proactively: Don’t wait for a campaign to introduce needed skills and position your board for success.
- Put a rights plan “on the shelf”: “Having a poison pill ready to go … so that you can adopt it within 24 to 48 hours [is] critical,” Roegge advised, as significant stake-building continues to be an effective pressure tactic.
Engagement and communications
- Speak with one voice, board-led: Tighten protocols so directors route outreach through the CEO/chief financial officer/general counsel. Assume everything could be public. Train on Regulation Fair Disclosure and discovery risks (e.g., texts, Slack).
- Modernize the PR stack: “The media landscape is not just the [Wall Street] Journal, the [New York] Times, Reuters, Bloomberg anymore,” Golden stressed. Prepare digital, social and retail shareholder strategies; don’t wait to get “punched in the face” to build content and cadence.
- Stock surveillance and sentiment: Monitor activity, map decision-makers at top holders and close the “signal vs. noise” gap Golden highlighted between the company’s investor relations front lines and the board.
Process and timing
- Tabletop exercises: Run mock engagements and ISS/Glass Lewis sessions. Keep “break-the-glass” materials current, not stale.
- Be early, not easy: As Rudisill observed, boards are increasingly testing “low-cost solutions” early to save time and demonstrate reasonableness – without needlessly “caving.”
- Keep contests about substance: Gamesmanship isn’t the answer, but boards should be confident in governance frameworks installed on a “clear day” and hold activists accountable for material shortcomings in nomination materials.
Outlook: what to expect in 2026 and beyond
- More withholds, more private nominations: Expect activists to keep using private placeholder notices and alternative activism strategies to preserve leverage, including after windows close.
- Steady contests, quicker settlements: Contests should remain stable to down as universal proxy continues to channel outcomes into negotiated outcomes.
- M&A activism to climb: With sponsors increasingly active and initial public offerings reopening, watch for a resurgence of sale/breakup themes, “bumpitrage” on announced deals and contested separations – particularly in tech and industrials.
Three quotes to remember
Neil Rudisill: “You can win the [bylaw] battle but lose the war” if the public narrative becomes about governance failings rather than strategy and performance.
Sean Brownridge: “The universal proxy rules … haven’t been that much of a win [for activists]. … They haven’t been winning in a big way in proxy contests, but they have been in the settlement environment.”
Jim Golden: “A no-confidence vote … has serious ramifications, and it’s cheaper [than a full proxy contest],” turning defense into “a true PR narrative campaign.”
Authored by
Broc Romanek