Professor Jack Yoest discusses the growing misuse of shareholder proxy fights, originally meant to protect investor interests when corporate management failed in its fiduciary duties. Instead, large institutional investors and proxy advisors increasingly use these fights to push ideological agendas, such as ESG initiatives, or to manipulate corporate decisions for their financial benefit, often at the expense of average shareholders. A key example is the ongoing proxy fight at U.S. Steel, where hedge fund Ancora Holdings opposes a $14 billion acquisition by Nippon Steel, despite overwhelming shareholder and worker support.
Yoest argues that reforms are necessary to prevent such manipulations. Increased transparency for proxy advisors, limits on ideological activism, and stronger governance safeguards could help restore proxy fights to their original purpose—enhancing corporate governance and maximizing shareholder value. If left unchecked, these proxy battles could undermine investor confidence and corporate stability.