What is “shareholder activism” in relation to mutual fund investors?

Shareholder activism refers to the efforts by shareholders, in this case, mutual fund investors, to influence a company's behavior or decisions actively. This could involve advocating for changes in corporate policies, pushing for more transparent practices, or even calling for changes in management or board composition. The goal is to maximize shareholder value and ensure that companies act responsibly and in the best interests of their investors.

Mutual fund investors often hold a significant number of shares in various companies, and collective action can lead to meaningful changes. When they engage in shareholder activism, they might attend annual meetings, submit proposals, or rally other investors to vote in favor of initiatives that enhance corporate governance or sustainability.

Other options detail scenarios that either misrepresent the nature of shareholder engagement or do not align with the broader understanding of activism within the investment community. Shareholder activism is fundamentally about constructive engagement and influence rather than actions that limit rights or manipulate market dynamics.