We have always believed that management was important, as noted in our blogs of July 18, 2013, “Does Management Matter?” and October 12, 2015, “Management Matters.” Recently, management seems to have become, more than ever, headline news. Consider Bob Iger’s return to Disney and the antics of Elon Musk and his unfathomable purchase of Twitter.
While we believe that management matters, investors (shareholders) have few remedies, short of selling their stock or not investing in the first place. Corporate governance is usually in the hands of the board of directors. It would seem that Disney’s board believes that enticing Bob Iger to return will be beneficial. As for Tesla’s board, are they really in charge? The company’s business is under pressure, the shares are among the worst performers and the CEO is dumping shares.
Investors best strategy is to remain focused, perhaps consult with their advisor(s) and act decisively when appropriate.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA