Recent efforts by US hedge funds to publicly challenge some of Australia's largest companies have put shareholder activism firmly on the agenda.
In May, US activist investor Elliott Management wrote to the directors of BHP Billiton accusing the board of a "do nothing" approach towards unlocking shareholder value, calling for an independent review of the firm's petroleum business.
Citing Elliott's efforts to "shake up" BHP, Bennelong Australian Equity Partners investment director Julian Beaumont said it was not symptomatic of a "broader" trend.
"Activism has said to be on the rise for a number of years now and it goes in patches – and clearly there's another patch right now," Mr Beaumont said.
"But there doesn't seem to be any broader scope for it. A lot of the activism in Australia's actually behind closed doors."
In fact, most fund managers prefer to maintain their relationships with the companies they invest in and, as a result, are reluctant to criticise them publicly, Mr Beaumont said.
However, shareholder activism is certainly healthy for investors, he said – whether it is out in the open or not.
"Management needs to be somewhat more accountable. What's been shown – particularly overseas, but perhaps to a lesser extent in Australia – is that management teams do improve their corporate governance through their disclosure and do come back to be more responsive to shareholders as a result of shareholder activism," Mr Beaumont said.
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