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6 things to do with an “activist investor”



News that Carl Icahn will be joining the board of Yahoo (YHOO) is clearly good news for everybody involved. One can only imagine the sense of eager anticipation with which Jerry Yang and his fellow board members are anticipating the arrival of the “activist investor.” 

I put the phrase “activist investor” in quotes because it’s something of a euphemism, sort of like “freedom fighter” when used in association with the word “Afghanistan.”

Be that as it may, I’m sure there is nothing but smiles and capitalist fist-bumping going on in the streets and corridors of Sunnyvale, where Mr. Icahn’s insights into the daily management of the Yahoo business organization will, I am sure, be most welcome, as will be the pleasure of his affable and reticent company.

Sometimes when an important visitor or new associate comes to call, it’s tough to figure out how to prepare for the great event. Here are a few thoughts on how Mr. Yang and his associates might work it out:

  1. As a statement on how seriously Mr. Icahn takes the various strategic options facing the company, fellow board members could don conical caps with elastic chin straps and greet his arrival with the tooting of little paper horns. Confetti will be optional.
  2. As an expression of fiscal restraint, lunch should be served on paper plates. Plastic spoons and forks are advisable. While Spam is not required, mid-shelf cold cuts should suffice.
  3. In recognition of Mr. Icahn’s expertise as an operating executive, every piece of paper generated by the company’s various segments should be deposited in a polite pile by his seat. A subsequent meeting should be set up immediately to glean wisdom based on his command of the details.
  4. During all board meetings, an open conference call line should be established between the Yahoo board room and the office of Microsoft (MSFT) CEO Steve Ballmer in Redmond, Washington, to avoid confusion and lack of clarity in subsequent communications.
  5. While it is almost certain that Mr. Icahn, with limited experience with the Internet and its many challenges, will take a low profile at board meetings, management and the existing board should make sure to listen carefully to anything the new member has to say, in the unlikely event he is moved to speak on any given issue, and to avoid the impulse to blurt imprecations. A fresh perspective from a smart source untarnished by jaded experience is always valuable.
  6. Under no circumstances should Mr. Icahn or any of his associates be offered any financial incentive to go away. This would obviously be a highly insulting move, since he has joined the board as an activist dedicated to the well-being of fellow Yahoo shareholders everywhere and by no means for personal lucre.

Those are just some initial thoughts. I’m sure Mr. Yang and his team are coming up with more and better ones even as we speak.