Archive for July, 2015

Is shareholder activism in controlled firms possible?

July 16, 2015 1 comment

We recently refered to this in our recent post (1), when analyzing the evolution of activism and particularly in Europe where controlled companies are common.

This is the question to which Kobi Kastiel, (a Fellow of the Program on Corporate Governance, and Terence M. Considine Fellow at the Center for Law, Economics and Business, Harvard Law School), tries to answer in a paper published in 2015 (it received The Victor Brudney Prize for June 2015) under the title “Against all Odds: Shareholder Activism, in Controlled Companies”, (1).

The author refers to the New York Times Company and its engagement with shareholders after a 2008 activist campaign led by Harbinger Capital Partners, Firebrand Partners, and Morgan Stanley. The company ended hiring two directors named by activists, selling non-core assets, reducing its Capex, lowering its operational costs, etc. But this company was not the typical target of such a campaign as it remained controlled by the founding family, which according to the broadest opinion should have prevented an activist campaign to succeed, (it would have needed a dispersed stock ownership). Read more…

Choosing among strategy options. Strategy approaches.

I have posted several comments on strategy before, (1), and a certain idea that all options seem reasonable arises, but of course, strategy cannot be drafted following ten different alternative procedures, (if there were only ten…). Harvard Business Review published in June 24th 2015 an article by Martin Reeves, Knut Haanaes and Janmejaya Sinha, based on this particular idea, which at the same time is an abstract of their book “Your strategy needs a strategy” (2) y (3). Choosing a strategy option correctly is more relevant every year as the path of change becomes faster and faster. The authors compile up to 81 options since 1958, and they state that the relationships between them are not clear and neither are the reasons clear to choose one or the other in any given set of circumstances. (See below just a sample of the options). Read more…