DroneShield Board Enacts Mandatory Shareholding to Restore Trust: What Investors Should Watch in 2026

Mandatory Shareholding: DroneShield’s Board Responds to Investor Demands

On December 22, 2025, DroneShield Limited (ASX: DRO) took a decisive step to mend its frayed relationship with investors. The company’s board announced a new mandatory minimum shareholding policy for directors and senior management—an explicit move to align leadership’s interests with those of shareholders, following a turbulent period marked by insider selling and disclosure errors (Reuters).

Under this new regime, directors are expected to hold DroneShield shares equal to their annual base fee within three years. For CEO Oleg Vornik, the requirement is more stringent: he must accumulate shares worth double his annual salary, and do so within just twelve months (MarketScreener).

These rules aren’t just for show. They aim to repair a trust gap exposed in November, when senior insiders sold A$70 million in stock, a contract announcement was misclassified, and the abrupt departure of the U.S. head unsettled investors. The resulting governance concerns triggered calls for more transparency and tighter alignment between management and shareholders.

Governance Overhaul: Beyond Shareholding Requirements

The board’s actions go beyond shareholding. DroneShield is revamping its securities trading policy to mirror the standards of ASX 200 companies. The company also plans to appoint an additional independent non-executive director within the next year, aiming to strengthen oversight and independence. Legal firm Herbert Smith Freehills Kramer was engaged to review these changes, overseen by independent directors Simone Haslinger and Richard Joffe (CapitalBrief).

Further, DroneShield will review executive and director pay, with updates promised in the February 2026 remuneration report. The goal: to ensure compensation structures encourage long-term commitment, not short-term gains.

For a defence-tech firm like DroneShield—whose business model is built on trust and reliability as much as hardware and software—governance isn’t a peripheral concern. It’s central to the value proposition, especially when selling solutions to militaries and critical infrastructure providers.

Commercial Momentum: The European Military Contract and Q1 2026 Milestone

Despite the governance turmoil, DroneShield’s operational momentum hasn’t stalled. In mid-December, the company announced a landmark A$49.6 million contract with a European reseller for military end-customers. The order covers handheld counter-drone systems, accessories, and software updates (DroneShield.com).

Critically, a significant portion of the contract is already stocked, minimizing execution risk. Deliveries and cash payments are expected to be completed in Q1 2026—giving investors a near-term test of the company’s ability to convert contract wins into tangible results.

This rapid timeline is a relief for shareholders. They won’t have to wait a year or more to see if the “contract win” translates into “cash in the bank.” The outcome in Q1 2026 could either validate the turnaround narrative or rekindle doubts.

Stock Forecasts: Wide Range Reflects Uncertainty

Analyst forecasts for DroneShield remain spread out, a reflection of the stock’s volatility and the dual nature of its story: growth versus governance risk. MarketScreener and Investing.com report average target prices around A$4.70, with highs near A$5.00 and lows at A$4.40 (MarketScreener, Investing.com). Bell Potter’s research also points to a Buy rating with targets from A$4.40 to A$5.30, depending on assumptions about risk and growth (Fool.com.au).

On the other hand, TipRanks highlights a more cautious Hold rating with a A$2.50 price target, underscoring how governance concerns can weigh on valuation models.

The bullish case is simple: “big contracts are arriving and could normalize.” The bear case: “even a great product can be undermined by credibility issues.”

Risks and Watch List: What Could Shape 2026

Several key risks remain on investors’ minds:

• Governance risk: Rebuilding trust takes time and consistent action, not just new policies.
• Contract lumpiness: Defence procurement cycles are unpredictable—big wins can cluster, but quiet periods can drag on sentiment.
• Regulatory constraints: DroneShield’s disclosures note U.S. restrictions on certain products, limiting market access.
• Technological race: The counter-drone sector evolves rapidly; what works today may need reinvention tomorrow.

Heading into Q1 2026, investors will closely monitor:

• Successful delivery and cash conversion from the European contract.
• Quality and transparency of future contract announcements—after past missteps, clarity matters as much as the headline figures.
• Progress on board and executive shareholding targets, and broader governance follow-through.

Ultimately, DroneShield’s fate in 2026 will be shaped by the interplay of governance repair and operational execution. The company’s leadership has heard investor concerns and is acting to close the trust gap. But only consistent, accurate disclosures and reliable delivery will settle the debate—and decide whether DroneShield can reclaim its place as a trusted defence-tech partner.

DroneShield’s board-level reforms are a direct response to a crisis of confidence—demonstrating that in high-stakes sectors like defence technology, governance is not just a corporate formality but a core competitive asset. The next few months will be a test not just of policy, but of whether DroneShield can translate promises into performance and restore credibility where it matters most: in the eyes of its investors and customers.