This section provides some guidance on the potential and limitations of shareholder activism. Since many traditional financial firms now offer social funds, many social investment firms are now offering shareholder activism to set themselves apart. Not only are socially responsible investors more likely to sponsor social resolutions, but they are more likely to vote for them as well. Activists must break down desired changes into objectives that can be done step by step.
Shareholder activism operates on making incremental progress every year.
But even modest change in one company may dislodge overall resistance to change in an industry. For example, company conversations may need to be confidential. So, in order to get a better result from shareholder negotiations, publicity efforts may need to be scaled down or up Need to think through implications of resolution. Although uncommon, some companies have stopped talking to shareholder activists after a resolution has been filed. Requires ability to translate demands into concrete yet significant annual steps for companies Can require defending resolutions on short notice, participating in meetings with companies, and evaluating copious amounts of corporate material.