Article | Harvard Business Review | May 2014

How to Outsmart Activist Investors

by Bill George and Jay W. Lorsch

Abstract

We offer opinions on how management and corporate boards of directors can best manage investor relations with activist stockholders such as hedge funds who are demanding major changes within a corporation to improve stockholder return. Beverage industry firm PepsiCo is cited in support of the contention that creating and maintaining a long-term strategic plan is of value in thwarting such investors. Executives and directors are advised to analyze their corporations from the point of view of an activist investor, to create harmony within the board of directors, and to measure performance against specific and publicly stated goals.

Keywords: Investment Activism;

Citation:

George, Bill, and Jay W. Lorsch. "How to Outsmart Activist Investors." Harvard Business Review 92, no. 5 (May 2014): 88–95.