Markets
Non-confrontational shareholder activism can work
Cheah Chor Sooi | 03 Nov 2017 00:30
Shareholder activism should be proactive, consistent, and persistent rather than occasional, says Tan
A successful shareholder activism approach need not be one that adopts confrontational manoeuvres as is often practised in the United States or Europe, but rather one which suits the specific country’s culture, operating environment and circumstances.

In the Asian context, a non-confrontational style which displays professional engagement with company boards and management can be as effective compared to hostile takeover bids that are often spearheaded by hedge funds or private equity funds.

Closer to home, the Minority Shareholder Watchdog Group (MSWG) – dubbed the principal shareholder activist in recent times – considers proactive engagement with companies through AGMs and company visits as an effective modus operandi to influence certain behaviour or action.

“Nevertheless, should professional engagement fail, shareholders may choose to take legal action against the company, although this is very rarely done in Malaysia,” MSWG general manager Lya Rahman tells FocusM.