FTI Consulting published an update to its interactive Global Shareholder Activism Map, which shows that shareholder activism gained momentum and geographic breadth in 2016.
To measure the potential risk in each jurisdiction, FTI Consulting created an index to track activism threat level by country and map key activists within each location. The analysis reveals that 342 activism campaigns took place outside the United States last year, compared to only 70 non-U.S. activist campaigns in 2010.
The research shows that Canada, Australia and the United Kingdom have the highest risk for an increase in activism outside the United States. These countries have experienced changing economic factors, including a strong U.S. dollar, undervalued asset prices and increased global scrutiny of corporate governance standards.
New markets such as South Korea and Japan felt the effect of governance changes and increasingly shareholder friendly sentiment in 2016 with landmark shareholder activism campaigns. Investors likely will continue to exert their influence in this region as they become more comfortable with this environment.
“The success of shareholder activism in North America continues to fuel its spread across the globe,” said Steven Balet, a Managing Director and Head of Corporate Governance and Activist Engagement at FTI Consulting. “These global shareholder activists are not necessarily U.S.-based nor do they necessarily conduct their activism in the U.S. style. They have, however, been increasingly successful in many jurisdictions across Europe, the UK and Asia.”
The disruptive threat of activism presents boardrooms around the globe with fresh impetus to better understand shareholder issues and concerns in order to prevent activism occurring and to be better prepared should they be targeted, Mr. Balet added.
The Strategic Communications segment of FTI Consulting conducted secondary research to map the regulatory environment of 14 critical activist investor jurisdictions. The Global Shareholder Activism Map contains activist campaign data as of December 31, 2016, sourced from Activist Insight. The map examines nearly 4,500 activist campaigns and excludes campaigns aimed at amending bylaws, as they are often automatic fillings from passive investors.
FTI Consulting developed an index to indicate country-specific activism threat levels, which encompass current campaign trends, corporate governance changes and the overall likelihood of future activism investment. Country insights include summary overviews, disclosure requirements, shareholder rights and company defense advantages/disadvantages. FTI Consulting’s Global Shareholder Activism Map will be updated regularly to reflect the most recent developments by country and highlight new trends in global activism investing. Register here for updates.
The Global Shareholder Activism Map, the full report, along with infographic and other insights on shareholder engagement and activism, can be accessed here. More insights are also available at http://www.ftiactivism.com.