Dealing With Activist Investors: The New Reality for FTSE 100 CFOs
FTSE 100 boards are facing rising pressure from activist investors and their CFOs are increasingly in the spotlight as the frontline of this new reality. Firms like Cevian, TCI and Elliott have ramped up demands, pushing for strategies that include spin-offs, aggressive cost reductions, divestitures and sharper capital allocation. According to a report by Alvarez & Marsal, the number of UK companies publicly targeted jumped by 30% in 2024, with more than 50 facing activist demands, the highest level since before the pandemic. For CFOs, this means heightened scrutiny and a change from purely defensive tactics to a more strategic role: aligning finance, strategy, governance and long-term value protection in an environment where activism shows no sign of easing. As outlined in the report, activist campaigns disproportionately impact certain sectors in the FTSE 100. Consumer goods, financial services and industrials have been the most frequently targeted sectors. Companies within these industries often have complex portfolios with segments that activists perceive as undervalued or underperforming, creating interesting opportunities for calls to streamline operations and refocus capital allocation.
Activist investors now arrive with sharper tactics and bigger ambitions, pushing well beyond governance tweaks to demand fundamental operational and financial change. Calls for spin-offs to unlock hidden value, divestitures of non-core assets and rigorous cost-cutting programmes have become standard. For CFOs, in charge of balancing capital discipline against growth, the emphasis has moved towards execution and measurable performance. Engagement with activists presents a complex challenge. CFOs must respond to proposals without compromising long-term strategy or unsettling internal teams. As guardians of the company’s financial performance, they play a central role in assessing divestiture options, revising forecasts and weighing the impact of restructuring or efficiency drives. At the same time, they face the delicate task of reconciling activist demands with the expectations of wider shareholder groups and stakeholders who may prioritise stability or long-term growth. Clear, credible communication is critical whether in the boardroom or through investor relations as CFOs translate complex trade-offs into narratives that build trust. It is their blend of financial precision and diplomatic skill that determines if companies can navigate activist pressure without losing strategic direction.
Operational efficiency and capital allocation have become defining battlegrounds. Activists frequently challenge CFOs to justify every spending decision, prove that investments deliver acceptable returns and move quickly to divest underperforming assets. This requires CFOs to have deep insight not only into financials but also into operational levers across the business. The speed with which they can provide credible revised financial scenarios influences the board’s ability to negotiate or, when necessary, fight activist campaigns. Transparency on cost structures, resilient cash flow forecasting and scenario planning for different activist demands are all vital. CFOs who fail to anticipate and respond with agility risk surrendering control of the agenda or eroding investor confidence at a critical moment. They have a crucial strategic and tactical role in managing activist pressure.
Early constructive engagement with activists can help protect long-term value while addressing shareholder concerns. Negotiated outcomes such as partial divestitures or accelerated capital return programmes can been achieved without full-scale boardroom battles. CFOs who take the initiative in these discussions often succeed in easing tensions and creating space for strategic recalibration. Still, confrontation remains a reality. Some activists push for board seats or public votes on key issues, raising the stakes. In such situations, precise disclosures and a clear articulation of strategic rationale become critical tools in the board’s defence.
FTSE 100 CFOs are meeting activist pressure with greater preparation, clearer communication and increased operational agility. Many now expect activism to target their companies and are developing dedicated response plans. The most resilient CFOs think like activists themselves, adopting an investor mindset that emphasises strategy, capital discipline and operational excellence. Practically, this means taking a central role in evaluating demands for portfolio reshaping, cost reduction and capital returns, while delivering credible financial scenarios that demonstrate shareholder value creation. Transparency around spending priorities, efficiency gains and cash flow forecasts strengthens their hand in both negotiations and defence.
Activist campaigns are set to remain high amid market volatility and evolving investor expectations. CFOs must expand their toolkit, building rapid response frameworks, working across finance, strategy, legal and investor relations and staying ready for divestitures or restructures, while ensuring clear, credible communication with shareholders. Looking to 2026, activism is expected to spread into sectors like technology and energy, where inefficiencies may be exposed. CFOs will need deeper operational insight, robust scenario planning and tighter governance to pre-empt or counter proposals, while boards prepare for more sophisticated tactics, from public campaigns to pushes for board seats. Success will depend on strong shareholder engagement and financial narratives that resonate widely.
At Partner Executive we believe that the rise of activist investors is transforming corporate governance and financial leadership within the FTSE 100. CFOs no longer operate solely as the architects of internal financial control but must be agile strategists and skilled negotiators under intense external pressure. Handling activist demands requires a balance of financial discipline, strategic clarity and stakeholder engagement. The CFOs who master this balance will not only protect their companies from destabilising activism but may also harness it as a catalyst for disciplined value creation.
