Activist investors force boards into action

A recent piece in The New York Times discussed the changing face of activist investing in Europe. While activist investing in the United States conjures up images of moguls like Carl Icahn and Dan Loeb, it seems that smaller investors are banding together to take on some pretty big companies in Europe.

According to Roger Lawson, communications director for the UK Shareholders' Association, "If there is a problem with the company, shareholders will say, 'Let's do something about it ourselves and don't trust the directors to do so.'"

It's pretty good logic. Remember: If you see a problem at a public company, it's there because the board didn't do anything about it. In most cases, if the board were effective, the problem wouldn't be sitting there for all to see. Often, criticism is leveled at executives and the board of directors tends to get a pass. But if there's a problem with the CEO, that all goes back to the board.

It's exciting to see a global trend toward more activist investing. And every underperforming company represents a possible opportunity for an investor with deep pockets willing to go in and agitate for change.