Barbarians in the Boardroom tells a compelling story of boardroom bust ups, dumped CEOs triumphant activists and pared back companies. It reveals real-life examples and interviews with executives and investors to explain why and how activist investors have managed to storm Wall Street and tear down City citadels. Owen Walker provides an insight into the way activists think, how they decide to target a company and how directors and executives could possibly work with them rather than against them. Amazon’s description of the book
When I first read the title I thought the book would be about the kind of activist shareholders we see in Europe such as Greenpeace and other environmental activists who buy a few shares to be able to attend the AGM’s to raise awareness of damaging activities by the company. Unfortunately this is a type of activism not covered by the book. If there is a second edition it might be an interesting element to include. It would be no harm if more companies were held to corporate social responsibility principles. This book however is mostly focused on more capitalist motivated activists, and mostly American ones at that.
To loop to the end of the book first, the author points out that a lot of the strategies employed in the US have not played out so well in the UK and Europe, where there is a far lower level of activist shareholder interventions. Cultural differences are one of the reasons, with less confrontational approaches tending to be the modus operandi this side of the Atlantic. The author does point out that the approach of activist investors has tended to make boards more accountable. Though sadly this seems to be mostly accountable toward major investors rather than all investors including the smaller ones.
The book is well written and tells the story well of major upheavals or challenges at Yahoo, Hewlett-Packard and Microsoft among others. It’s interesting to see how often CEO’s and board members end up being overthrown due to unrest among shareholders. Often for potentially short term reasons too. It does help illustrate the down side of going public and leaving yourself open to these sort of share holder upheavals, demonstrating the IPOs come with a downside too. The case studies are useful and interesting to read. Walker suggests that boards now tend to be quicker to respond to investor unhappiness to avoid proxy contests which invariably end up with blood on the floor for many board members.
It’s an useful book to read and it will be interesting to see what Walker writes about next.