Taste Note - Amazon Corporate Governance Best Sellers
Dear Chairman: A Century of Shareholder Activism, Letter by Letter
A Kurums Book Taste review of Dear Chairman for directors and executives who want to understand activist investors before one addresses a letter to them.
Why this book fits Kurums
Shareholder activism arrives at most boards as a surprise attack; Gramm's book makes it legible history. Through eight landmark campaigns - from Benjamin Graham prying excess cash out of Northern Pipe Line in 1927 to a hedge-fund dissection of BKF Capital - each built around the activist's original letter, it shows what provokes intervention, what works, and what wreckage looks like.
For the Kurums Corporate Governance audience this is pre-reading for the inevitable: the situations that attract activists - lazy balance sheets, empire building, misaligned pay, entrenched boards - are diagnosable from the inside first. Reading the letters as a director is cheaper than receiving one.
What the book argues
The through-line is that the balance of power between shareholders and managers has swung for a century and the letters track every swing. Graham's Northern Pipe Line campaign establishes the primal scene: a company hoarding securities worth more than its market price, a management seeing no obligation to return it, and an owner doing arithmetic. From there the book moves through the proxyteers of the 1950s, Ross Perot inside General Motors, corporate raiders, and modern hedge-fund activists - each era inventing new tactics against the same underlying disease of unaccountable control.
The middle chapters argue that activism is a tool, not a virtue. Perot's letters to GM - he called the company's treatment of Class E shareholders what it was and was bought out to go away - show boards paying greenmail to silence their most informed critic. The raider chapters show value unlocked and companies gutted with the same instruments. Gramm, an activist investor himself, keeps score honestly: intervention corrects managerial failure and also manufactures short-term exits at long-term cost, sometimes in the same campaign. The letter's quality - the analysis it contains - is the best predictor of which kind you are facing.
The closing argument is that governance is ultimately a question of who watches, because someone always will. Empty-suit boards, staggered defenses, and dual-class structures change who intervenes and how roughly, not whether. The BKF chapter - a small asset manager destroyed in the crossfire of an activist campaign that was right about costs and wrong about consequences - stands as the book's warning to both sides: the fight itself has costs, and the best outcome is the letter never being worth writing.
Key ideas, translated to your desk
Do the activist's math first
Excess cash, sum-of-the-parts gaps, pay untethered from performance - run the screen on your own company every year. If the letter writes itself, expect the letter.
Judge the letter, not the sender
Some campaigns are informed owners correcting real failure; some are exit engineering. The depth of analysis in the first contact tells you which - respond to the argument, not the reputation.
Entrenchment changes the attacker, not the risk
Defenses that insulate a board attract the rougher class of intervention and repel the constructive kind. The durable defense is a share price that reflects managed value.
Use it at work
- Run an annual 'activist screen' on your own company - balance sheet efficiency, segment valuation, pay-for-performance - and present it to the board.
- Draft the response protocol before any letter arrives: who speaks, who analyzes, what gets taken seriously.
- Read Perot's GM letters with your board as a case discussion: what would we do with an informed internal critic?
- Review your defenses - staggered terms, dual-class, poison pill settings - against the book's evidence on what they actually attract.
Read it if
- You are a director, CFO, or IR lead at a company any fund can screen.
- You want activism explained through primary sources instead of punditry.
- You enjoyed Barbarians at the Gate and want the century of context around it.
You can skip it if
- You operate only private, closely held companies with aligned owners.
- You want a how-to manual for running campaigns - this is history and judgment, not tactics.
- Case-study formats frustrate you; the book generalizes sparingly and on purpose.
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