Building Activist Resilience - A Framework for Public Companies

Shareholder activism isn't an emergency to manage—it's a predictable risk to prepare for. Most companies begin their activist defence only after receiving the letter or reading about themselves in the press. By then, you're already behind. 

For public companies in the £1bn to £10bn range, the question isn't whether you'll attract activist attention, but when. 

Early Warning Systems That Actually Work 

Activist approaches rarely come as complete surprises—if you're watching the right signals. 

Build monitoring into your investor relations rhythm: 

• Track significant movements in your shareholder register, particularly accumulation in known activist trading accounts or sudden hedge fund interest. 

• Listen to the event-driven investment community. When your company starts appearing in their discussions, you've moved onto the target list. 

• Notice unusual patterns: new faces at investor presentations, information requests that probe specific operational details, or questions that benchmark your performance against specific peers. 

These signals typically appear weeks or months before activists make contact. That lead time is invaluable. 

Strategic Positioning Before Contact 

The strongest activist defence is a compelling strategy that pre-empts their thesis. 

Regularly pressure-test your own story: 

• Where would an activist attack your capital allocation? Are you holding underperforming assets out of sentiment rather than strategy? 

• How does your cost structure compare to peers? Activists will run this analysis—you should run it first. 

• Can you clearly articulate why your current strategy delivers superior returns to activist alternatives? 

These questions can be addressed proactively through board strategy sessions, and communicating your answers consistently to shareholders before anyone challenges you publicly. 

Stakeholder Relationships as Infrastructure 

During activist campaigns, companies discover which stakeholder relationships are genuine and which are transactional. The time to build trust is before you need it. 

• Maintain consistent dialogue with your top shareholders about strategy, performance, and governance—not just during earnings season. 

• Keep employees informed about company direction. Activists often approach employees; you want their loyalty established beforehand. 

• Develop strong relationships with unions and customers through transparency. These groups can be powerful allies during campaigns. 

An Integrated Approach to Preparedness 

Activist resilience requires ongoing coordination between investor relations, corporate communications, legal counsel, and the board. 

At Sodali & Co, we help clients build activist preparedness into their regular corporate rhythms—combining intelligence monitoring, governance assessment, and stakeholder engagement into a cohesive framework. This proactive approach ensures companies face activists from positions of strength rather than scrambling to respond. 

Activist campaigns are expensive and distracting—even when you win. The better approach is making your company a less attractive target through strong performance, clear strategy, and robust stakeholder relationships. 

Discover the full insights in the video below.