Activist investors can be a persistent thorn in the side of management teams and boards. While their demands can result in improvements to the company and shareholder value, the experience can also be stressful and demoralising. It can derail a firm’s long-term strategy, divert leadership from their priorities and compromise value. Knowing how to respond to such an event can help management teams and board members ensure the process is less disruptive, while increasing the chance of a more positive outcome. 

Doug Smith is co-founder and managing partner at Blackmoor Investment Partners, a UK-based activist investor. The firm holds positions in several listed companies including Domino’s Pizza Group, Devro PLC and The…