Our panelists drew comparisons to the aftermath of market upheaval driven by the COVID-19 pandemic in 2020 which kicked off at a similar time in the corporate calendar. "We saw a lot of activists go pencils down, some vanished from campaigns entirely. Then we saw a massive resurgence in 2021 which continued right up to now," said Carmen Lu of Paul, Weiss. "What we are seeing now is massive amounts of dislocation, lots of noise and a huge amount of uncertainty in the markets."

The webinar heard that, while some new M&A opportunities will arise from the dislocation, other activists will shift from an anticipated focus on M&A to more operational demands or even consider private engagement to better understand how companies are coping with the new pressures.

Time to settle

Panelists also stated that companies may be more open to settle so that their resources can be redeployed to deal with other issues or risks that have been presented amid the market turmoil.

"It's interesting to see the rise in early settlements in the last few years with UPC [universal proxy card]. It's hard to tell whether it's now market volatility or whether it was going to get settled anyway," said Geoffrey Weinberg of Sodali & Co. "Companies are more inclined than ever to give a board seat or two and avoid the costly and time-consuming contest."

The event also heard that amid such settlements, 2025 will also see a continuation of the multi-year campaign with the can kicked down the road for a more opportune time to push for change. "There are a number of companies under attack that know that it could be for several seasons. More activists are leaning to this approach," noted Gloria Lin of Evercore. "Activists may well be more open to settle right now but doing so while knowing that there is still opportunity to effect change and take credit for it."

A free pass for boards?

Also looking back at COVID-19 the webinar heard that there may be more deference to boards among stewardship groups in the current environment. However, companies will need to focus their messaging on how they are managing evolving risk, particularly those with international supply chains. "There is now more of an onus on boards to show that they do have processes to deal with all the challenges that have been and continue to arise in 2025," said Weinberg.

With shareholder engagement having seen the dynamic change in recent months due to SEC changes, off-season is now viewed as a key opportunity to engage with passive funds and investors to get a pulse on any concerns and a more candid view past the annual meeting cycle.

Campaign preparedness hygiene was also described as key with a refresh of vulnerabilities given the changing risks. "Imagine how your board would feature in a fight deck. What would those attacks look like? It's good housekeeping but particularly in this environment. You don't know what's ahead," said Lin.

We'll be bringing you all the key takeaways soon but for now, listen back here.

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