AI, Identity-Driven Shareholder Activism, and the Future of Corporate Governance

Artificial intelligence (AI) is rapidly transforming corporate governance. While much attention has focused on AI’s impact on operations, compliance, and risk management, its influence on shareholder activism deserves equal scrutiny—particularly as younger, technologically fluent investors bring their generational values to bear on corporate decision-making.

This evolution signals the potential emergence of identity-driven activism: a form of shareholder engagement that reflects priorities beyond short-term returns, such as climate action, diversity, and long-term social accountability—or any other cause, whatever it may be, to the extent that it creates common ground. Millennials and Gen Z investors, armed with AI-enabled tools, are increasingly capable of identifying causes they care about, crafting targeted proposals, and coordinating collective action with remarkable precision and speed.

In my recent paper (Between Promise and Power: Artificial Intelligence, Shareholder Activism, and the Corporate Governance of the Next Generation), I explore this development in depth. I argue that while AI has the potential to democratize corporate influence by empowering smaller and values-driven shareholders, its transformative promise remains—at least for now—largely aspirational.

AI certainly lowers barriers to participation. It helps investors aggregate preferences, conduct real-time analysis, and design data-informed campaigns. The 2021 campaign by Engine No. 1 against ExxonMobil exemplifies the kind of identity-aligned activism that AI could support or scale in future scenarios. Though not AI-driven, the campaign—launched by a little-known hedge fund holding only 0.02% of ExxonMobil’s stock—successfully secured three board seats by leveraging ESG arguments and strategic data use to gain the backing of major institutional investors like BlackRock. It stands as a powerful precedent, not of AI in action, but of the type of insurgent, values-driven activism that AI may help further empower.

However, empirical data from the 2022–2024 proxy seasons suggest that AI’s democratizing potential remains structurally constrained, with its primary benefits accruing to large and well-resourced actors. My analysis identifies four notable trends:

• First, shareholder proposals reflecting generational values—such as ESG, diversity, and corporate ethics—have increased in volume yet now face mounting resistance. Average support for ESG proposals dropped from 35% in 2021 to 23% in 2024, with early 2025 figures suggesting a further dip to 20%.
• Second, despite AI-enabled platforms improving technical access for retail investors, there is little evidence of a corresponding rise in millennial participation. For example, in 2024 only 40,000 of the 2 million eligible retail investors at Vanguard opted to direct their votes under the firm’s pass-through program.
• Third, while activist campaigns are growing in number, their effectiveness has diminished. In 2024, activists won fewer board seats than in 2022, and the success rate in contested elections fell to a three-year low of 38%. Early 2025 data indicate a rebound in outcomes, with activists securing 34% more board seats year-over-year.
• Fourth, although AI is increasingly embedded in activist strategies—including predictive analytics, sentiment analysis, and voting simulations—these technologies remain largely concentrated in the hands of institutional investors and well-capitalized funds. Millennial-led or grassroots initiatives have yet to gain meaningful access to, or benefit significantly from, these technological advancements.

At the same time, corporations are deploying AI to strengthen their defenses against activist interventions. Companies are turning to predictive modeling and sentiment tracking to uncover vulnerabilities, anticipate potential challenges, and reinforce the position of incumbent boards. From AI-generated earnings scripts to sophisticated risk assessment systems, these innovations are being harnessed to consolidate managerial control—making it more difficult for dissidents to succeed. In many cases, the same algorithmic tools that empower activists are being repurposed to neutralize them.

This dual use of AI highlights a core paradox: the same technology that promises to decentralize influence may also entrench existing power structures.

The risk is not only that smaller shareholders remain marginalized in an environment where access to sophisticated AI tools is disproportionately concentrated among institutional investors, but also that the very features that make AI powerful may further exacerbate ideological fragmentation within shareholder bases and intensify polarization, complicating consensus-building and effective corporate oversight.

Yet, realizing this potential may provide directors with a generational opportunity to incorporate younger voices into decision-making. Boards could indeed play a pivotal role—not merely by responding to activist pressure, but by anticipating generational demands. By integrating AI into their own governance strategies and embedding younger perspectives into boardroom deliberations, directors could transform AI into a vehicle for channeling technological innovation into social innovation within the governance landscape. Put another way, AI, if used responsibly, may support the emergence of a governance paradigm that is more inclusive, forward-looking, and ethically attuned to the expectations of the next generation.

As is often the case, opportunity comes hand in hand with risk—and the value of the potential AI offers will depend on how these risks are addressed by lawmakers, regulators, and, above all, corporate boards.

While caution is warranted, the broader opportunity should not be missed. Corporate governance is entering a period of accelerated change—and AI is both a mirror and a motor of that change. How boards, investors, and regulators engage with it will shape whether AI becomes a tool of concentration or a catalyst for democratic renewal.

‘What’s past is prologue’: the transformative potential of AI may indeed represent a new chapter in corporate governance—one built upon the foundations of what has come before, yet oriented toward a future rich with possibility. While the data remain inconclusive, the fulfillment of this promise may ultimately depend on whether directors anticipate rather than resist generational change. With foresight and responsibility, this next chapter could well be one of innovation, inclusivity, and enduring progress.