Shareholder Activism In Guernsey

Shareholder activism refers to the use of ownership position in order to influence a company's policy and practices and is a very live issue in the current economic climate. It has risen exponentially over the last few years, fuelled by economic pressures and a robust merger and acquisition environment.

Whilst shareholder activism can be no more than simply a gentle suggestion by a shareholder in relation to the direction of a company, in general, the term shareholder activism usually connotes more extreme action by a proactive shareholder seeking to effect change in a company (often publicly).

This note aims to set out some of the main powers available to activist shareholders in relation to publicly traded Guernsey companies, together with some of the potential pitfalls which need to be avoided when taking such action. It also looks at how companies can mitigate against the risk of an aggrieved shareholder.