Dear Chairman

Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism

Jeff Gramm

What it’s about

A sharp and illuminating history of one of capitalism’s longest running tensions—the conflicts of interest among public company directors, managers, and shareholders—told through entertaining case studies and original letters from some of our most legendary and controversial investors and activists.

Why I like it

Jeff Gramm understands investing and shareholder activism from first-hand experience. His research into the cases enables detailed descriptions of what happened and why, while the quality of his writing makes the story plotlines compelling and makes the characters jump off the page. This book is fun to read.

The primary thesis of Jeff Gramm's book "Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism" is that shareholder activism has significantly evolved over the past century, leading to a dramatic shift in the balance of power between shareholders and corporate management in public companies.

To support this thesis, Gramm makes several key points:

Historical Evolution of Shareholder Activism

1. Gramm traces the rise of shareholder activism from the 1920s to the present day, showcasing how it has transformed corporate governance.

2. He analyzes different eras and pivotal boardroom battles to understand the factors that have caused shareholders and management to collide.

Influential Investors and Their Strategies

3. The book features never-before-published and rare letters from legendary investors like Benjamin Graham, Warren Buffett, Ross Perot, Carl Icahn, and Daniel Loeb.

4. These letters illustrate how investors interact with directors and managers, their thought processes regarding target companies, and their profit strategies.

Changing Power Dynamics

5. Gramm argues that shareholders have gained unprecedented power in the struggle for corporate control.

6. He examines the evolution of mechanisms like proxy fights and shareholder proposals, highlighting their increasing significance in corporate governance.

Pros and Cons of Shareholder Activism

7. While paying tribute to the ingenuity of public company investors, Gramm also exposes examples of shareholder activism at its worst.

8. He discusses instances where hedge funds engineer "stealthy land-grabs" at the expense of a company's long-term prospects.

Impact on Corporate Governance

9. The book provides insights into how public companies work and who really controls them.

10. Gramm explores the concept of 'shareholder democracy' and its implications for corporate governance.

By presenting these ideas through case studies and original correspondence, Gramm offers a comprehensive view of the complex relationship between shareholders, management, and boards of directors in public companies, ultimately providing a nuanced understanding of modern capitalism.