The landscape of corporate governance is undergoing rapid transformation, with shareholder activism and diversity, equity, and inclusion (DEI) remaining at the forefront of boardroom discussions. As companies navigate these evolving pressures, understanding how to proactively manage leadership transitions and build DEI strategies that align with business goals has never been more critical.
At Skytop’s 2025 Shareholder Activism Summit in New York City, Edelman Smithfield’s Patrick Ryan and Parichat Wrolstad shared insights on these pressing topics. Patrick spoke on the outlook for M&A activism in 2025, while Parichat explored the future of DEI. Their perspectives offer valuable takeaways for companies preparing for the challenges ahead.
Patrick Ryan on M&A Activism in 2025: What’s Next for Public Company Leadership?
The key message: Boards must take a measured, strategic approach to leadership transitions and M&A decisions, as activist investors increasingly leverage CEO performance to drive change.
- M&A activism remains a dominant force in corporate governance. Even if M&A activity rebounds, shareholder activists will likely continue targeting CEOs, given their recent success in influencing leadership transitions.
- Proactive succession planning is key. Establishing a special committee for CEO succession planning can appear reactionary and send the wrong message. Succession planning should be an ongoing, integrated process rather than a temporary, event-driven response.
- Strategic reviews require careful consideration. While announcing a strategic review may attract more bidders, it also presents significant risks. Boards must weigh the potential downsides before making such decisions. For deeper insights, read Patrick's analysis in the Harvard Law School Forum on Corporate Governance.
Parichat Wrolstad on DEI Reimagined: A Business-Driven Approach for the Future
The key message: Effective DEI programs must evolve beyond demographic metrics to become strategic business initiatives that create value and opportunities for all stakeholders.
- DEI strategies should align with business goals. Companies must reassess their DEI programs, particularly hiring practices and employee resource groups, to ensure they emphasize merit-based performance while fostering inclusivity and opportunity for all employees.
- Diverse hiring should prioritize business impact over quotas. Rather than focusing on demographic quotas, organizations should seek candidates with experience and skills that support long-term business objectives.
- Stakeholder engagement is essential. A successful DEI program must consider the priorities of key stakeholders—including employees, customers, business partners, and investors—to drive meaningful and sustainable impact.
- Diversity varies by industry and location. There is no one-size-fits-all approach to DEI. Companies must tailor their strategies to reflect their unique business landscape and operational needs.
- Transparency and communication matter. Clear messaging on how DEI initiatives contribute to business performance is critical for earning trust and ensuring sustained support from stakeholders.
Looking Ahead: Proactive Strategies for Business Leaders
The insights from Skytop's Summit underscore two critical priorities for corporate leaders:
- Be strategic about leadership transitions before activists force your hand
- Ensure your DEI programs directly support business performance
Companies that treat these as fundamental business priorities rather than compliance exercises will be better positioned to navigate stakeholder pressures in 2025. As boards and management teams plan for the year ahead, integrating these perspectives into their strategic planning will be essential for building resilient, inclusive organizations that stay ahead of activist challenges.
For additional guidance, reach out to Parichat Wrolstad (parichat.wrolstad@edelmansmithfield.com) and Patrick Ryan (patrick.ryan@edelmansmithfield.com) for expert insights.