Notably, these gains came despite large institutional investors softening their proxy voting guidelines — particularly about board composition — and reportedly continuing to support incumbent directors in most contests. This demonstrates that even without a wholesale change in institutional investor posture, boards that fall short on governance remain vulnerable to sound, persistent pressure from activists.

What this means for boards. These trends are a reminder that upholding strong governance practices isn’t a check-the-box exercise but a credibility signal. Investors continue to scrutinize board structure, leadership, refreshment practices and responsiveness to shareholder input. And when they perceive weaknesses in performance and oversight, they’re more willing to support calls for change, whether through shareholder proposals, withheld votes or activist nominations.

Against this backdrop, boards should prepare for the possibility of more targeted campaigns — not just proxy contests — from well-resourced investors that aim to signal discontent. This season, several of these campaigns led to director resignations or prompted governance changes, even though many of the targeted directors still received just above majority support. In an environment where universal proxy rules empower shareholders to vote director-by-director, the margin for error on demonstrating board quality and accountability has narrowed.

How boards and management can adapt. To stay ahead of investor expectations and mitigate potential governance vulnerabilities, boards and management teams should consider the following actions:

• Review and modernize governance provisions regularly. Reassess charter and bylaw provisions — such as supermajority vote requirements, classified board structures or limitations on shareholder rights — to reflect governance best practices and investor views. As a starting point, review voting results on recent shareholder proposals to identify where investor support is strongest and anticipate where pressure may build next.
• Maintain transparent board evaluation and refreshment practices. Articulate how the board evaluates its own performance, maintains its independence and aligns director skills with company strategy. Activists often target boards that appear stagnant, overly insular or lacking in relevant expertise. A well-executed board assessment process — particularly one that incorporates tools like individual director evaluations and periodic third-party facilitation — can help uncover and address many of the vulnerabilities activists seek to exploit. When done thoughtfully, it also equips the board to confront those concerns directly and credibly in engagement with investors or activist shareholders.
• Be proactive in high-risk scenarios. Earlier this year, we emphasized the importance of understanding how activists pursue their objectives, particularly as they adopt new strategies. We advised companies to anticipate emerging activist scenarios and take steps to strengthen their preparedness. This guidance remains as relevant as ever. As we head into the 2026 proxy season, don’t underestimate the impact of withhold campaigns, exempt solicitations or other nontraditional activist strategies. Of directors who say their boards have conducted tabletop exercises in the last 12 months, only 31% of them have been focused on preparing for an activist investor.4 Boards should engage early, evaluate any gaps in board composition and dedicate sufficient time toward activist campaign readiness.

1Unless otherwise sourced, voting data was provided by Proxy Analytics as of June 30, 2025.(go back)

2PwC, 2025 Annual Corporate Directors Survey, Forthcoming.(go back)

3PwC, 2025 Annual Corporate Directors Survey, Forthcoming.(go back)