Changing Management in the Face of Shareholder Activism: Issues to Consider
Recently it has become relatively common for shareholder activists to advocate for changes in senior management, not just changes in board composition. In the face of this pressure, some companies have announced changes to their leadership teams. These changes can create strife in the boardroom and tension among employees. Leadership transitions also raise a number of disclosure and other legal issues that companies should take into account if a board decides to respond to activism in this manner. This article provides a checklist of issues that regularly arise in these situations.