The original article was published in 13D Monitor’s The Activist Report – August Issue in August 2025.
Leza Bieber is a corporate partner at Freshfields US LLP, where she is the US head of activism defense and shareholder engagement, focusing on activism and takeover defense preparedness and corporate governance.
Ms. Bieber advises boards of directors and executive management teams on activism, governance and crisis management, including stakeholder engagement and board and disclosure issues. Ms. Bieber received a J.D and a B.A in economics and psychology from New York University.
13DM// Please tell us a little about your practice and how Freshfields views shareholder activism?
LB// Freshfields has, over the last several years, fully built out top tier US corporate, regulatory, and litigation practices, supported by over 500 lawyers in NY, DC, Boston, and the San Francisco-Silicon Valley area. An important feature of this success story has been the firm’s activism defense capabilities. Central to our growth and momentum is our broad, holistic and multi-disciplinary approach to corporate issues. Shareholder activism defense exemplifies this approach, both in the US and globally.
The Freshfields activism defense team is global. We understand the playbooks of major activists across the United States, Europe and Asia and meet frequently to share ideas, troubleshoot and expand our knowledge. We marry jurisdiction-specific advice with insights from the global team, arming clients with both strategic and tactical expertise.
While we are happy to work with clients for the first time that they receive an inbound from an activist, we also know that a significant part of activism defense occurs well before an activist emerges, from putting in place an effective playbook and plan that can be leveraged in an active situation, to earning the trust of the boardroom on a “clear day,” to working with companies to proactively think like an activist across strategic, operational and governance lenses, to working with management teams on effective shareholder engagement programs and ensuring that feedback is appropriately directed and understood.
My own practice follows this expansive view and focuses on activism defense and takeover preparedness, corporate governance and shareholder engagement. When I was first starting out as a lawyer, the notion of practicing both activism defense and corporate governance was uncommon and not well-understood. The resistance to this approach to activism makes me laugh a bit and is a sign of how far we’ve come in so short a time as an industry. Today, it would be unthinkable to have an activism practice without understanding governance pressures. I think that the holistic “double-major” approach has enabled us to have a practice that is as dynamic as the ecosystem. In addition, many of the trends today, both activism and governance, are best understood in a somewhat historical context and having fluency and experience that builds on that context is an important pillar of our practice.
The firm’s focus on serving client needs has enables us to approach shareholder activism as an evolving area of corporate strategy and to integrate our deep expertise across M&A, securities law, executive compensation, crisis management and securities litigation to provide strategic, forward-thinking advice and advice under urgent, high-stakes conditions as needs arise and change.
13DM// Your team recently concluded a report on key trends and developments across the 2025 proxy season. What were some of your key takeaways?
LB// We’ve called this season the “back to basics” season and noted a retreat to safety among many stakeholders. After the SEC 13D/G guidance, many large institutional investors changed their engagement protocols and their proxy voting guidelines, even mid-season. A change in administration and a focus on ESG scrutiny also drove some of these mid-season guideline changes, as well as public retreats from ISS and Glass Lewis. Institutional investors have been more reticent to support ESG proposals and this year, there were no environmental shareholder proposals that received majority support and only five proposals, all on reports requesting political contributions, received majority support. Anti-ESG proponents have increased the number and types of pressure on companies in novel ways, which has required company adaptation. All of this occurs under the watchful eyes of activists, many of whom continued significant campaigns and a number that engaged in withhold vote campaigns.
The adaptation and change by the stakeholders before and during proxy season leaves companies in an interesting position. On the one hand, there is less direction from some stakeholders, particularly on issues that companies do not believe are core strategic issues. On the other hand, without the direction, companies will need to fill the vacuum with a self-generated story in an environment where candid shareholder engagement is difficult to obtain. The next few months during engagement season will be critical for companies, and I suspect we will feel the impacts of this proxy season for a number of seasons to come.
13DM// CEOs have been a big subject of activist campaigns recently. We divide CEO activism into two types: (i) CEO succession where reasonable minds can differ and (ii) removing an empire builder with strong shareholder support (i.e., MASI, APD). How does the activist defense strategy differ between these two types of campaigns?
LB// In either scenario, the initial step is to figure out what the activist actually wants. In most cases, unhappiness with the CEO is a symptom, not the root cause. Getting to the root of the issue and what the activist is seeking to achieve (and in what timeframe) is an early priority.
CEOs are a relatively infrequent target for replacement on the board in a proxy contest because replacing the CEO as a director often does not serve the activist’s strategic purpose. However, it is also true that an activist that gains representation on the board through a proxy contest or a settlement, often heralds instability (and often replacement) for the CEO within the relative near term.
It is important to also understand the boardroom dynamics around the relationship with the CEO, including the level of private support for the CEO, the CEO’s specific role in the strategic plan development and execution, the board’s views on succession planning and the relationship among the board, the management team and the board.
It also cannot be ignored that there is a very human element to activism defense. The targets tend to be individuals that are highly successful and care deeply about the company and take their fiduciary duties to shareholders and their role seriously, whether professional director or CEO. Navigating the human element differs in each campaign, but takes on a different dimension when CEO activism impacts the CEO and individual directors.
13DM// How do you view the increasing use - and success - of recent withhold campaigns?
LB// The initial question here is overshadowed by a more fundamental question: what it is that activists want in 2025? There are a handful of proxy contests each year, and a significant number of settlements, many of which reach compromise on the basis of appointment of independent directors. Sometimes these independent directors are handpicked by the company from the existing director shortlist.
There is an open question about what utility a board seat serves for an activist. The nascent prevalence of withhold campaigns suggests a more limited utility in obtaining an independent director seat on the board without golden leashes, a voting commitment, information sharing, or direct pecuniary gain to the activist, especially when compared to the utility of unlocking value through M&A, capex investment or return of capital, generally refreshing the boardroom and getting engagement with the activist’s ideas.
If the value in a given campaign is achieving all of the latter goals, it is possible that they can be achieved without a director, which saves the activist the pressure and reality of finding a qualified opposing independent candidates and the full cost of a proxy contest. When these facts align, I think we will see activists look for creative ways to achieve their aims at lower costs, which is likely to include withhold campaigns.
For companies, it underscores the importance of looking at board composition critically and having a healthy approach to refreshment. Based on the pattern of targeting three directors in a withhold campaign, somewhere between a quarter and a third of the board may be vulnerable to attack without a viable alternative. The strategy in a campaign response that is solely defense with limited offense element is different and one that more companies will need to prepare for.
13DM// Is there more of an appetite for settlement these days?
LB// Objectively, yes. Settlement numbers continue to be healthy over the last few years, and the number of proxy fights that go to a vote continues to be relatively small. When adjusted for different indices and industries, the number of proxy fights is still smaller yet, while the same is not necessarily true of settlements.
Settlements provide certainty and allow both sides to avoid significant costs, financial and otherwise, to running or defending a proxy contest. It also allows one side to avoid being the loser of a public vote. In addition, as mentioned above, the board seat itself is often not the prize, but a tactic to get to the prize. Getting the pomp and circumstance around getting onto the board out of the way in a more streamlined manner allows both companies and the activists to move on.
However, like many activism and governance trends, the settlement vs. fight calculus lives on a pendulum, and we are likely tilting towards one side. The relative frequency of settlements and infrequency of voted proxy contests suggests this empirically. However, there is a growing sentiment, including from investors, that companies may be quicker to settle in situations when there would be shareholder support to sustain a more protracted fight.
This all assumes that both sides understand when they are winning or likely to win a proxy contest. With investors feeling increasingly hamstrung about engagement, the ability to predict how a campaign will end is also eroding, which will change the settlement calculus.
13DM// What expertise or skillset is the most critical for board members to have today and would make a board vulnerable if it lacked it?
LB// It has become increasingly important for boards to demonstrate that the skills that directors bring, individually and in the aggregate, support the company’s strategy. A board should be reflective of the vision and strategy, while also obtaining two things from directors: 1) sufficient experience to ensure that appropriate questions are asked and that oversight occurs and 2) the skills and connections that a director brings to the board and company. There should be sufficient inputs on both fronts to justify occupying one of only a few seats at the table.
It is difficult to understand the dynamics of a boardroom from the outside. The director with a non-traditional background may be the one who consistently, through careful questioning, questions the premise of issues and ensure sufficient foundation for decision-making. It may be the non-traditional background that enables and empowers that director because they do not have intrinsic shorthand embedded in their view. Similarly, the longest tenured director may be the board’s and at times management’s institutional memory and connection to understanding prior decision-points. And yet, in campaigns, there is often a focus on a non-traditional background or tenure as points of vulnerability. The difficulty in assessing the functioning of the board is the precise reason why it is important to be able to tell a more complete story than can be conveyed through solely a literal check-the-box exercise.
13DM// We have seen many interesting tactics this year in proxy fights such as the Company including dissident nominees on their slate without a settlement and the Company decreasing the size of the Board in the midst of a proxy fight. What do you make of these tactics? Any other interesting tactics you are seeing?
LB// I think these tactics also underscore the earlier discussion about the utility of proxy fights and the relative costs. As the costs to run a proxy fight remain significant, or continue to escalate, without a desire for the outcome of the proxy contest to be the end goal, companies and activists actively look for ways to resolve the contest and there is a measure of creativity and creative lawyering that can be involved. With the costs of a contest high for both parties, we can expect increasingly creative tactics and solutions to resolve the initial conflict to pave the way for the goals of both sides.
Depending on a company’s defense profile, settling without a settlement agreement may have a similar risk profile as an agreement. Or it could be that the relative cost of the agreement in avoiding the financial cost of a proxy contest, as well as management and board attention and opportunity cost, makes a settlement without an agreement a rational choice. Similarly, while many companies do settle, we also cannot expect them to roll over because an activist entered the scene and we can and should expect companies to be creative in shoring up available defenses. Similarly, we occasionally see, and this season did see, a settlement for board seats solely for to-be-named directors, which indicates a potential lack of candidates in the near term, but a desire for both the company and activist to reach an initial solution. Similarly, we also sometimes see activists withdraw campaigns with the promise of increased longer-term guidance and/or return of capital. Both of these outcomes further the thesis about utility, costs and goals.
13DM// 13D Monitor provides Company Vulnerability Ratings for over 2,500 public companies and has been remarkably accurate in predicting which companies will be engaged by an activist median rating of a company engaged is 79.9 out of 100). In your experience are companies generally surprised when they are engaged? Should they be?
LB// Despite preparation, there is still a surreal moment when it becomes apparent that there is a live activism situation. The public numbers can fuel this sentiment, as the number of publicly known activism campaigns is dwarfed by the amount of private engagement that occurs.
No matter how well prepared a company is – the number of tabletops, the level of detail in the playbook or manual – there are elements to a live engagement that cannot be prepared for, and even for directors that have been through the process before, there’s also a level of surprise at the intensity, timing demands and coordination that is required in a live situation.
I have also found that there is also an activism sweet spot – companies that are performing incredibly well are not positioned for an activist to launch a campaign. However, companies that are performing too poorly may not be attractive if an activist does not have a particular thesis or solution. As a result, there are often companies that are worried about activism because they acknowledge there are avenues for criticism that find themselves without an activist. There are also companies that are surprised each year because they are performing, but the activist has a thesis to boost performance or cure underperformance compared to a particular set of companies. However, it is also rare that there is a boardroom without a director with activism defense experience, along with advisors cautioning that any company could be at risk, so on some level, boards know that the level of vigilance corresponds with the level of risk.
13DM// Index funds own approximately 25% of the U.S. public equity market, more than double what they owned 10 years ago, and there is no sign of a slowdown. How integral are they in a proxy fight? Is there a point when they become too powerful? Is the separation of Vanguard just the tip of the iceberg?
LB// Index funds can be, and regularly are, outcome determinative in proxy contests, as well as other votes. It is not uncommon for the top 10 investors in the company to own anywhere between 25 - 50% of public companies. At the same time, we’ve seen this season that endorsements from ISS and Glass Lewis in a proxy contest can be influential but not outcome determinative, especially compared to some of the index funds.
In addition to the Vanguard separation, we’ve also seen an effort to increase directed or direct voting at a number of index funds, which puts voting decisions in the hands of the underlying owners or managers, and not the institutions. This year and proxy season, we’ve seen the index funds face increasing levels of scrutiny over the power they wield with a vote and other actions and policies, and the separation and direct voting programs are methods that functionally de-lever some of the voting power these institutions have.
There is a balance to be struck. Having a sophisticated and concentrated investor base has its appeals. Fixing, in part, for overconcentration by rapid de-concentration will have its own challenges. Our proxy plumbing system is byzantine and it can be difficult for companies to understand their investor base. Directed voting adds a layer of complexity and opacity to the process, whereby it is near impossible for a company to reach its investors. In addition, there is a lack of understanding about how much concentration does exist if the index fund beneficial ownership number obscures its voting authority. There is a balanced middle ground of concentration that is beneficial for companies and index funds and as index funds reckon with their growing influence, it will be helpful for the market to not overcorrect.
13DM// What do you think the most pressing corporate governance issues will be over the next five years?
LB// It feels a bit like a cop-out these days, but like society at large, AI is going to impact corporate governance and how companies think about governance, engagement with stakeholders, the boardroom and oversight. The oversight of AI within companies is an ongoing governance question that will eventually come to land on some range of acceptable principles and oversight that is likely to be a mix of technological advances and improvements, guiding good governance principles, litigation and enforcement and perhaps regulation, much like many governance questions.
What it means to have good governance exists in a world where AI is burgeoning is a much more interesting question. How will companies think about disclosure when AI can write compelling disclosure more efficiently than a team of humans? As investors increasingly use AI to provide information on companies and make decisions, what will happen to the impact of proxy advisory firms? How will companies leverage AI or figure out what inputs investors use in order to solicit votes? What will it mean for director pre-read materials when they can be summarized with an AI tool? How will companies express nuance and ensure that individual circumstances are taken into account when nuance can be lost on AI?
It is not hard to imagine the impact in activism that is sure to emerge in the coming years, from the substance of settlements, the calculus of whether to settle and the ways in which AI can be leveraged in a proxy fight in terms of disclosure, ad campaigns, social media, solicitation and voting practices. There are bandwidth and resource considerations to how many campaigns can be launched by any one activist at any time. Even the most prolific activists have their limitations. AI may fundamentally change the resourcing and scale of activists, as well as lower the costs of an unsuccessful campaign.
This ignores the substantive questions about a digital revolution that will shake up the white collar workforce perhaps more than the industrial revolution and how quickly boards and companies will be able to adapt and oversee that transition, the opportunities that arise as a result of AI, and the arms-race nature of finding and exploiting use cases ahead of competition (and even what competition means in an AI world).
All of these issues will find their way onto boardroom agendas soon, and both the governance of the issue as well as the substance of the issue are likely to challenge boards and management teams in the near future, with winners and losers likely starting to emerge as soon as the agendas start to shift. The emergence of winners and losers in a competitive space has long been the place where activism thrives.
