Shareholder Activism in Private vs Public Companies
Shareholder activism is changing in the UK’s corporate governance arena. this article focuses on listed companies, but several of its lessons apply equally to private and owner-managed businesses. Shareholders are no longer content to stay quiet, and boards that have not thought ahead can be caught badly off guard.
What is shareholder activism in 2026?
There are three trends shaping the UK corporate governance:
- Investment trusts under pressure. Activist funds have been building large stakes in trusts with mainly retail shareholders that trade at a wide discount to net asset value. This has disrupted the whole sector.
- Long-only investors speaking out on M&A. With deal activity high and the IPO pipeline quiet, traditional institutional investors are increasingly willing to oppose takeovers publicly when they think the price is too low.
- Shareholders wanting a seat at the table. Two FTSE 100 companies are currently being pressed to appoint nominees of major shareholders to their boards.
The role of proxy advisers
Institutional investors rely heavily on proxy advisers. Most large investors now use custom voting policies rather than the advisers’ standard ones. In a routine AGM, advisers look at director independence, diversity, the number of outside roles and attendance. In a contested situation the questions change to credibility, responsiveness to shareholders and financial performance. A dissident candidate with relevant sector expertise and no conflicts or over-boarding concerns can win their support. For a listed board, the proxy advisers can make or break a vote.
What happens when a requisition lands
What happens when shareholders requisition a general meeting to appoint a director.
Under section 303 of the Companies Act 2006, members holding at least 5% of the paid-up voting capital can require the directors to call a general meeting. The directors must call the meeting within 21 days. The meeting must then be held within 28 days of the notice. That gives a timeline of roughly seven weeks. In that time the board must:
- check that the requisition is valid, including any accompanying members’ statement, which is limited to 1,000 words
- assemble advisers and prepare its response
- issue the notice and update the market
- engage shareholders and, for listed companies, the proxy advisers
- track likely voting outcomes before the meeting
Seven weeks is not long if the board is starting from scratch.
ThIS also covered a request to inspect or copy the register of members. Under sections 116 and 117, a company must normally comply within five working days. Its only alternative is to apply to court if it believes the request is not for a proper purpose. Such a request is often an early warning that something is being organised.
Why this matters for private companies too
These rights are not limited to listed companies. In a family or owner-managed company, a minority shareholder with 5% can requisition a meeting in exactly the same way as the uk compnaies act applies to all of these entities equally. The register inspection rules also apply in full. Disputes between shareholders, particularly on exit, succession or a sale, often surface first through these routes.
Five ways to be prepared
Practical advice that translates well to businesses of any size:
- Know who your shareholders are. Know who actually controls the votes and keep the register up to date.
- Understand how they are likely to vote. Know this on key issues before a resolution is tabled, not after.
- Stress-test your governance. Look at board composition, independence and tenure. Pay particular attention to sensitive areas such as directors’ remuneration.
- Keep talking to all shareholders. Treat them as engaged owners rather than adversaries, and don’t avoid the difficult conversations.
- Run a fire drill. Agree in advance who does what when a requisition or register request arrives, and which advisers you will call.
How we can help
If you would like to review your company’s governance arrangements, articles or shareholder agreements, or you have received a requisition or register request, please get in touch with your Client Care Manager.