Love Letters, They’re Not

CorpDuelTwo well-regarded participants in the corporate governance debate have issued letters to the public recently, defending their views.

In one letter, Carl Icahn, perhaps one of the best known corporate activists, defends his view that corporate management, if left unsupervised by a corporation’s shareholders, would make sub-optimal or perhaps deleterious decisions for the corporation.  Naturally, he sites his current targets, Lions Gate and eBay, as examples.


“I have made a great deal of money by understanding some simple facts.  Very often assets of significant value are mismanaged by highly-compensated, but less than highly-competent, managers and boards of directors, all whom are protected by highly-compensated lawyers and bankers – with stockholders not only paying the fees of these advisors but also losing out on the returns that they otherwise could be enjoying if they took on their proper role as business owners.   In such situations, if investors can install good managers and elect directors that will hold those managers accountable, then the true value of those assets can be realized.”

Click here or past the link to read the Carl Icahn Letter on the website –

In the next letter, Leo Strine, Jr., Chancellor of the Delaware Chancery Court and legal scholar affiliated with several universities, addresses and counters a pro-activist essay by Professor Lucian Bebchuck, Professor of Law, Economics and Finance at Harvard Law School (Click here for Prof Bebchuck’s bibliography and links to additional information.)


“Bebchuk has spent his entire career obsessed with ensuring that stockholders are not harmed by corporate managers, whether intentionally or because those managers have incentives that do not align exactly with those of the stockholders. He has been remarkably successful in seeing his agenda to make corporate managers more directly responsible to
stockholders become the predominant market reality. Fidelity to his own insights would seem to suggest a new agenda, which is ensuring that the entities of which most ordinary Americans are in fact equity investors—money managers in the form of mutual funds and pension funds—are as accountable as the managers of the productive enterprises on which our nation’s economic future is largely dependent. Until he broadens his lens to make sure that all who wield power using the funds of American investors are accountable, Bebchuk is himself fairly labeled an insulation advocate.”

Click here or paste the link to read Chancellor Leo Strine’s letter in the Columbia Law Review –