USA Law and Practice Contributed by: Kai Liekefett, Derek Zaba, Ram Sachs and Evan Grosch, Sidley Austin
course of action and request a meeting with senior leadership and/or board members. Public Pressure In other situations, an activist may immediately lead with a press release, including an open letter to the board or shareholders, setting forth concerns and a specified plan of action. Such steps often coincide with the first public disclosure of the activist’s position An activist may nominate director candidates for election to the target company’s board and/or submit other shareholder proposals at the next annual share- holder meeting. An activist can also ask shareholders to take similar actions at a special meeting of shareholders or via action by written consent, to the extent permitted by applicable state law and the target company’s govern- ing documents. Litigation/Books-and-Records Demands Books-and-records demands by activists have also increased in prominence in recent years, enabling activists to obtain access to confidential corporate records. In Delaware, a stockholder must demonstrate a “proper purpose” to succeed in such demand. In 2025, Delaware’s General Assembly amended DGCL § 220 to define the books and records sub- ject to inspection. Such books and records are now defined to be a set of identified core materials, such as board minutes, board materials and any agreement entered into under DGCL § 122 (18). in the company. Proxy Contest Furthermore, the Court of Chancery may order the production of other, additional records if all demand requirements are met and the stockholder has dem- onstrated a compelling need for inspection to further its “proper purpose” and that, by clear and convincing evidence, specific records are necessary and essen- tial to further such purpose. DGCL § 220, as amended, expressly allows corpora- tions to redact unrelated information and require the
stockholder to enter into a confidentiality agreement as a condition to production. 11.4 Recent Trends Shareholder activism is an ever-present reality for US companies. Activists typically target companies with perceived shortfalls in performance or governance. The threat applies to companies across market caps. Size has not been a barrier to activists, as companies with a market capitalisation of more than USD100 bil- lion have faced prominent campaigns. Following the Trump administration’s announcement of reciprocal tariffs in April 2025, global markets faced the largest decline since the onset of COVID‑19, as the prospect of major US import levies disrupted supply chains and heightened inflationary risks. The uncertainty stirred by these tariffs suppressed the appetite for corporate M&A, a major driver of activ- ism, in H1 2025. Though the overall activism volume softened compared to 2024, the number of activist campaigns globally still remained above levels seen in 2020 through 2023, demonstrating the resiliency of shareholder activism despite ongoing macroeco- nomic turbulence. First-time activists remained an important catalyst, representing 42% of funds wag- ing H1 2025 campaigns and spearheading 31% of H1 2025 campaigns. Moving forward, with the expected downward trajec- tory of interest rates and a looser regulatory environ- ment in Washington, M&A is likely to re-emerge as the most prominent argument among activist agitators, particularly for companies in the mid- and small-cap range. In advance of this shift, companies should pressure-test existing strategies and prepare for demands to conduct one-off strategic reviews. Companies should engage with advisors to proactive- ly identify steps to eliminate or mitigate weaknesses and address concerns from the broader investment community. In some cases, it may be appropriate to develop and disclose a governance transition plan to align with investor expectations. 11.5 Most Active Shareholder Groups Hedge funds are typically the drivers of activism in the USA. There is a significant ecosystem of funds raising
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