The Next Threat to M&A: Employee Activism

September 16, 2021
By Blair Hennessy

First published via Corporate Board Member. 

Employee activism is having a moment. From walkouts to social media campaigns on issues spanning from social injustice to sexual harassment, employees have mobilized to prove that they can create real change and influence corporate decision-making at the highest levels. The rising influence of employee activism is on a path to collide with one of the critical corporate actions any company takes: transactions.

At its core, employee activism pushes companies and management teams to do more (i.e. stand up for social justice) or be better(i.e. improve climate commitments). Employee activism in M&A is rare because it demands employees go one step further by outwardly rejecting a decision that management has endorsed. For this collision of interests to occur, a number of puzzle pieces have to come together.

Board directors need to consider this new risk in dealmaking. While a rare occurrence right now, employee activism on a transaction could have broad-reaching impacts on the deal and the longer-term ability of the organization to attract and retain talent key to its growth.

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