Canadian athleisure brand Lululemon is forecasting a second consecutive year of profit declines in 2026. Revenue growth has slowed in recent quarters, not helped by poor design and quality resulting in product lines being paused or discontinued. Founder Chip Wilson is pressuring the board to shake up the leadership team and revive the company’s sagging share price, which, at the time of writing, has more than halved over the last year.

The struggles have attracted the attention of Elliott Investment Management, which has built a stake of over $1 billion in Lululemon and put forward former Coach and Ralph Lauren executive Jane Nielsen as a potential CEO candidate. Elliott is what’s known as an activist investor. This is the name for a group or individual that becomes a shareholder in a company with the sole purpose of pushing for change. An activist investor will usually target companies that are considered undervalued.

Last year, Swatch Group became the target of American fund manager Steven Wood, founder of GreenWood Investors, who has called for an overhaul of the Omega owner’s corporate governance and culture. Also last year, Barington Capital Group launched a campaign for a change of leadership at Victoria’s Secret. The New York hedge fund argued that the American underwear retailer had lost its value since being spun out of parent company L Brands (now trading as Bath & Body Works) in 2021. Other luxury names targeted by activists in the past few years include Kering and Richemont.

More shares, more influence

According to data from Barclays Investment Bank, activists launched 255 campaigns globally in 2025, up from 244 in 2024 and surpassing the previous record of 249 in 2018. The aforementioned Elliott Investment Management led the way with 18 campaigns, spending $19 billion building up stakes.

Shareholder activism has long been the remit of specialist investors. Yet it has “evolved significantly over the past decade, particularly as high-net-worth individuals (HNWIs) and family offices become more sophisticated in how they deploy capital,” says Samuel Leach, head of investor relations at real estate finance and investment platform TAB.

The courses of action available to HNWIs that hold shares in a UK company depend on the size of their stake. “Even a smaller shareholder can make their voice heard,” says Greg Kearney, senior responsible investment analyst at wealth management firm Quilter Cheviot. “You can vote at company meetings, speak at AGMs, and even join forces [with other shareholders] informally to pressure management.”

The greater the stake, the more influence that can be yielded. Under the UK Companies Act 2006, those that own at least 5 per cent of voting shares can formally request a meeting with the board to discuss changes in strategy and put forward resolutions, such as to demand climate action.

If the stake held is at least 25 per cent of voting shares then a shareholder has the power to block special resolutions. These are extraordinary decisions, such as an increase to the board’s bonuses, that require at least 75 per cent of votes to pass. “In short, a small stake grants you a vote and a voice, but a big stake lets you put issues on the agenda and demand action more forcefully,” says Kearney.

Shareholder activism with regard to US companies is a bit more complicated. Shareholders with as little as $2,000 invested can submit proposals on corporate ballots, though these can easily be rejected before being put forward for a vote. Rules are beginning to be introduced to restrict the power of smaller investors, however. Since September 2025, shareholders in companies incorporated in Texas are required to own at least $1 million or 3 per cent of voting shares in order to submit a proposal. A stake of this size may not sound like much to HNWIs, but it’s a sign of how the US is looking to rein in the influence of individual shareholders.

The pros and cons of shareholder activism

If a family office or individual is putting a sizable amount of money into a company, shareholder activism can be an effective tool for protecting their investment. “For many HNWIs and family offices, activism is less about confrontation and more about stewardship. When a meaningful amount of capital is at risk, it’s entirely reasonable for them to want transparency, disciplined capital allocation, and alignment between management and shareholders,” says Leach.

Kearney argues that pushing to shape a company’s direction and policies “means you’re not just a passive owner. You can actively remind a company of expected standards of behaviour that potentially enhance long-term value or reflect your principles.”

Engaging in shareholder activism can be tiresome and time-consuming, though, because it will often involve detailed research and protracted discussions with a company with no guarantee of success, Kearney adds. Publicity-shy investors should also be wary: it may be necessary to go public with a campaign in order to get the desired outcome.

A public campaign shouldn’t be undertaken lightly as it comes attached with “reputational friction”, Leach warns. There is also the risk of a company opting for a quick fix to quieten the noise rather than taking the time to make changes to its long-term strategy. “Shareholders must carefully balance the potential upside of driving change against the possibility of destabilising a company they are invested in.”

As for how HNWIs should go about trying to enact change, Kearney recommends finding a wealth manager with a strong stewardship programme and plenty of experience engaging company boards.

“A good wealth manager will know the right timing and tactics to influence management and will focus on constructive engagement rather than public confrontation,” he says. “This can lead to more productive outcomes – companies are often more receptive to constructive approaches. In the end, whether acting alone or through a manager, HNWIs can be catalysts for change.”

Read more: Will European luxury stocks be back in vogue in 2026?