Governance Arbitrage: Blowing Up the Public Company Governance Model to Maximize Long-Term Shareholder Value

Governance Arbitrage: Blowing Up the Public Company Governance Model to Maximize Long-Term Shareholder Value

by Henry D. Wolfe


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Maximizing the board’s potential is critical to maximizing the value of any company, but in most public companies today, the board is an undervalued and underutilized asset, focused mainly on compliance and oversight rather than on maximizing performance and long-term shareholder value. The real problem is that the traditional public company governance model itself is flawed and solutions proposed for improving it are typically focused on changing the model from within—inadequate attempts to “tweak” boards rather than to transform the model into one that is more effective. This unique book offers a fresh new approach—the value maximization model—based on private equity governance. This more robust model results in a board that is directed by a clearly defined governing objective, populated with the right directors, and fully developed as an asset of the company. This radically new model makes an arbitrage play possible—a tangible gain in company performance and shareholder value.

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Product Details

ISBN-13: 9781988344089
Publisher: De La Vega Occidental & Oriental Holdings
Publication date: 04/01/2019
Pages: 240
Product dimensions: 5.50(w) x 8.50(h) x 0.75(d)

About the Author

Henry D. Wolfe is a private investor who has been an active catalyst for the creation of substantial value for shareholders in a variety of industry situations, both public and private. He has been a frequent guest lecturer at Harvard University and is a Visiting Professor at York University in Toronto. Wolfe is a graduate of Clemson University, where he was a member of the Clemson rugby team and served as its captain. He and his wife live in Chicago.

Table of Contents

Acknowledgments vii

Introduction: The Governance Arbitrage Value Creation Thesis 1

Part I Analysis

1 The Public Company Governance Model: The Board as an Undervalued and Underperforming Asset 9

2 Analysis of the Private Equity Governance Model 43

Part II The Plan

3 Governing Objective 65

4 The Critical Role and Qualifications of the Non-Executive Chairman 77

5 Director Selection 133

6 The Agenda: Achieving the Governing Objective 155

Part III Case Study and Conclusion

7 Case Study: Starboard Value and Darden Restaurants 193

8 Governance Arbitrage 205

Notes 213

Index 223

About the Author 232

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