Last week, activist hedge funder and (suddenly) huge Yahoo shareholder Daniel Loeb wrote a letter demanding that much of the Yahoo board step down.He wrote:
“From the failed Microsoft sale negotiations, to a subsequent bungled and disappointing search deal with Microsoft, through a series of misguided CEO selections, and most recently the Alipay debacle, this Board’s failures have destroyed value for all Yahoo stakeholders…Against this background, it is evident that merely replacing the Company’s CEO – yet again – will not be enough to alter the direction of the Company. Instead, a reconstituted Board with new Directors who will bring fresh eyes, relevant industry expertise and increased investor alignment to the table is immediately necessary.”
In an enthusiastic response, a one-time senior executive at Yahoo emailed us a plan for how the board might be reconstituted.
A slightly edited version of that email:
If you ask me, Yahoo should have a board made up of:
- Financial experts who will figure out how to unlock the value of the company, asian assets etc.
- Consumer Internet experts who will contribute to the product vision, see through the BS that Yahoo product has been selling to the board for years, and help hold management accountable for delivering.
- Advertising and marketing experts. It’s true that Yahoo should be more of a media company and less of an advertising technology company, but the company should also remember that the vast majority of their revenues come from advertising and keep some experts around.
- General corporate governance experts – only need one or 2 of these.
- Management/turnaround experts.
- People who get disruptive innovation and the internet
These people can afford to buy a nice chunk of Yahoo stock in addition to whatever equity they get as a Director. That should probably be a pre-requisite of joining the board.
This source went on to name some candidates.
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