Corporate governance is evolving, driven by a surge in activist investor campaigns in 2024. With a record 243 campaigns launched worldwide – the highest since 2018 – companies are rethinking board composition to strengthen their defenses and adapt to shifting investor expectations. Notably, a key part of this evolution is the growing demand for experienced communicators to join corporate boards.
Engaging With Activist Investors Is Critical
The surge of activist campaigns worldwide across companies of all sectors and sizes has fundamentally upended boardroom dynamics. About 20% of S&P 500 companies have a shareholder activist among their investors, with many activists – and their chosen director candidates – already serving on corporate boards. Board directors must engage productively with shareholder activists and their appointees, setting aside personal tensions that may arise from a contested proxy fight. More than ever, success in these interactions depends on strong communication skills and high emotional intelligence.
Communicators: A Critical Boardroom Asset
As activist investors gain traction, corporate boards face increasing pressure to improve stakeholder engagement and manage public perception. The replacement of a record 27 CEOs in 2024 highlights the stakes. In this climate, strategic communication is more essential than ever. According to Barclays 2024 Review of Shareholder Activism, organizations increasingly recognize that communicators bring critical expertise in narrative development, crisis management, and stakeholder engagement – making them valuable additions to modern boardrooms.
“Successful boards regularly engage with investors and prepare to clearly articulate their companies’ stories to alleviate potential governance issues during proxy season,” said Heather Smith, a leader in DHR’s CEO & Board Practice.
The ability to craft compelling corporate narratives, manage media relations, and build trust with investors and the public is becoming a critical asset. Communicators are skilled in anticipating and mitigating reputational risks, ensuring that companies present a coherent and persuasive message to all stakeholders, particularly during periods of scrutiny or upheaval.
Preparing for 2025: A Proactive Strategy
In DHR’s database of 1.7 million executives, including more than 46,000 communications executives, 11% of current or former Chief Communications Officers (CCOs) sit on corporate boards today.
“Boards that recognize a need to build stronger relationships among all stakeholders will increasingly seek leaders with communications and investor relations skills,” shared Heather Smith. “Thus, we expect the number of CCOs in the boardroom to increase over the next several years.”
As companies prepare for ongoing activist pressure this year, adding communicators to boards is becoming a strategic advantage. Experienced communications professionals bring valuable insights into stakeholder concerns and help craft strategies that align with public and investor expectations.
Moreover, communicators also play a key role in addressing environmental, social, and governance narratives, which are central to many activist campaigns. Their expertise ensures that corporate messages feel authentic and align with societal values and investor priorities.
Are You Prepared?
The rise of activist investors isn’t just a challenge – it’s an opportunity to evolve. Bringing communicators into boardrooms is a proactive way to protect corporate reputation and strengthen stakeholder relationships. Companies that prioritize strategic communication at the board level will be better prepared to navigate activist pressures, promoting transparency, resilience, and stronger alignment with stakeholders’ values.
“Proxy contests are battles of credibility and persuasion between a board and a dissident shareholder,” said Jared Levy, Partner and Head of Activism Defense at FGS Global. “Board refreshment and diversification help deter activism, but a strong communicator on the board who can engage effectively with activists and shareholders may be the single most potent defense.”
Heather Smith
Partner, Board & CEO Practice
As a member of the Board & CEO Practice at DHR, Heather works with clients to successfully place C-level executives, chairmen, CEOs and board directors. She is based in Chicago.
Jessica Bayer
Managing Partner, Corporate Affairs and Communications
Jessica serves as the Managing Partner of DHR’s Corporate Affairs and Communications Practice, based in Washington, D.C. With a strong, global network and experience leading C-level searches within the communications space, Jessica develops and maintains strong relationships with industry leaders, understands the evolving nature of agencies and is a trusted advisor to her clients.