Activism, AI and M&A in a market that won’t sit still

As boards turn their focus to the 2026 proxy season amid growing macroeconomic headwinds, one message from activist investors is clear: volatility may delay campaigns, but it rarely deters them.

Diligent Market Intelligence convened leading asset managers and advisors to investors and public companies to learn what we should expect this proxy season. The key takeaway: performance and strategy remain the ultimate grading curve, regardless of geopolitical shocks or tariff-driven uncertainty.

Expect activism, even in choppy markets Diligent’s Proxy Season Preview 2026 report, which distils key takeaways from our recent Stewardship Series Summit in New York, highlights a backlog of campaigns paused during last year’s “Liberation Day” volatility that may reemerge if companies have not demonstrably improved. Activists are increasingly systematic, scanning for misalignment between performance, strategy, governance and pay, weak succession planning and boards slow to refresh or communicate. Abrupt strategic pivots, under-integrated M&A and failed “say on pay” votes are now common triggers for a campaign.

Rethink engagement in a reshaped ecosystem Regulatory shifts have complicated the traditional dialogue between boards and large asset managers, with last year’s Securities and Exchange Commission (SEC) guidance on 13G eligibility linked to more cautious engagement by index funds. At the same time, the influence of proxy advisors is moderating as leading investors rely more on internal policies and analysis than on recommendations. Boards can no longer assume that a small circle of gatekeepers will interpret their story for shareholders; they must own the narrative directly and be proactive sharing their strategy and governance with investors.

Pressure points: deals, AI and pay M&A has reemerged as a central battleground with investors more willing to challenge underpriced take-privates and to use withhold campaigns or dissident slates to influence outcomes. Meanwhile, lagging AI strategies and thin communication can give activists an opening to argue the company is falling behind or failing to explain its plan.

Action items for boards Directors should define a clear “North Star” strategy and align capital allocation, incentives and messaging to it, rather than swaying with each bout of volatility. Refresh board skills, particularly around technology and M&A; pressure-test succession plans; and ensure 2026 incentive designs balance flexibility with visible alignment to shareholder outcomes. In a season that continues to play out amid geopolitical uncertainty and economic volatility, and as director quality is under sharper scrutiny, activism preparedness is the best defense.

For more, download the Proxy Season Preview 2026.