The increasingly aggressive and rising level of investor activism leveled against corporations has been both a cause of concern to managements and boards and a sign of greater corporate responsiveness to investor stakeholders.

NY_stock_exchange_traders_floor_LC-U9-10548-6Among the major companies recently targeted are Amgen, Apple, Microsoft, Sony, Hess, P&G, eBay, Transocean, ITW, DuPont, and PepsiCo. Yet even as critics decry such moves as an encouragement to short-termism, advocates contend they can lead to greater corporate efficiency and higher share prices.

But what should a CFO’s approach be when a shareholder activist comes knocking? As it turns out, there are many ways of mounting a plan of defense or acceptance — although few advise open confrontation. Instead, says consultant James Berkeley in an article in this CFO forum on approaches to investor activism, finance chiefs should consult the “investor within” and take a careful look at their companies from the point of view of what an activist might think. Similarly, it’s helpful to “Think like an activist,” writes Jim Cudahy, president and chief executive of the National Investor Relations Institute. “Take a hard, objective look at your company from the perspective on an activist.”

An important part of that self-scrutiny should include an analysis of the board as to how stale its perspective might be, writes Paul Loop, PwC’s governance leader. Finally, to avoid damaging confrontations with activists, finance chiefs and their bosses should encourage an attitude “that centers on proactive communication and mutual respect” with investors overall, according to Henri Steenkamp, a CFO himself.

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