What is meant by shareholder activism?

Shareholder activism refers to the efforts made by shareholders to influence company practices, policies, or decisions. This activism can manifest in a variety of ways, such as proposing changes to corporate governance, advocating for environmental or social responsibility initiatives, or seeking alterations in strategic direction. Shareholders leverage their ownership stakes to advocate for changes they believe will enhance the company's value or align its operations more closely with their interests.

Engaging in shareholder activism can involve activities such as voting in shareholder meetings, initiating resolutions, or even launching campaigns to mobilize other investors. This influence is generally aimed not just at financial returns but also at promoting specific agendas that the activists believe are in the best interests of the company and its broader stakeholder community.