The Activism Gap

Add to Calendar: Add to Calendar: 2026-09-22 16:30:00 2026-09-22 17:30:00 The Activism Gap Event Description Hedge fund activism has become a central feature of modern corporate governance, yet academic research and policy debates have largely focused on activist engagements with large-cap public companies. Most activist engagements, however, do not target trillion-dollar companies or play out on the front pages of the financial press. Instead, they take place far from the spotlight in small-cap public companies, which comprise the majority of public companies in the United States. These companies operate in a markedly different governance environment—one characterized by limited analyst coverage, weak media scrutiny, low levels of institutional investor engagement, and diminished public and private enforcement. We term this striking difference the “Activism Gap.”This Article provides the first comprehensive analysis of hedge fund activism in small-cap companies. Drawing on a comprehensive dataset of activist campaigns between 2015 and 2024, supplemented by qualitative interviews with market participants, the Article documents three core findings. First, hedge fund activism is prevalent in small-cap firms and accounts for a substantial share of all activist engagements. Second, activism in this segment is predominantly governance-oriented rather than extractive, with activists frequently seeking limited board representation through short-slate campaigns rather than control or immediate value realization. Third, despite greater structural and informational constraints, the quality and success rates of small-cap activist campaigns rival those observed in larger firms.The Article then examines how recent regulatory, contractual, and doctrinal developments—including the proliferation of advance-notice bylaws, amendments to Schedule 13D, the adoption of universal proxy cards, and heightened constraints on institutional investor engagement and proxy advisors—disproportionately burden activism in small-cap firms and threaten to widen the existing “Activism Gap.” Finally, it offers policy recommendations to support a more balanced governance ecosystem across public company sizes.  Speaker’s BioYaron Nili is a corporate law and securities law scholar whose research focuses on traditional corporate governance, the role and function of boards of directors, shareholder activism, hedge funds, and private equity. He joined the faculty of Duke Law School in July 2024. He is a research member of the European Corporate Governance Institute (ECGI).Prof. Nili earned his LLB and MBA in finance from The Hebrew University in Jerusalem, where he was editor-in-chief of the Hebrew University Law Review. He went on to clerk for Justice Ayala Procaccia on the Supreme Court of Israel before attending Harvard Law School, where he studied as a Fulbright Fellow, receiving his LLM degree and subsequently his SJD. While at Harvard, Nili served as a John M. Olin Fellow in Law and Economics and as a fellow at the Program on Corporate Governance. He also worked at Simpson Thacher in New York as a corporate associate, representing financial institutions and other companies in commercial lending transactions, mergers and acquisitions, and securities. Prior to joining Duke Law, Prof. Nili was a professor of law and the Smith-Rowe Faculty Fellow in Business Law at the University of Wisconsin Law School, where he taught courses in corporate and securities law.His recent publications appear or are forthcoming in the Cornell Law Review, Yale Law Journal, University of Pennsylvania Law Review, California Law Review, Northwestern University Law Review, and Southern California Law Review. Seven of his recent articles have been voted by business law professors as among the top 10 corporate and securities law articles of the year.  Moot Courtroom, Case Western Reserve University School of Law School of Law School of Law America/New_York public