The problematic question is "Why?" The follow-up question is "Why this investor?" Reuters reports ValueAct owning a 0.8% stake in Microsoft, hardly a level that bespeaks meriting a board seat on its own. Is there unique expertise at ValueAct? Co-founder Jeff Ubben ran Fidelity Management's Value Fund, and when he left, it had $4 billion under management when he left to join the merchant bank Blum Capital. Again, this is certainly a high level of asset management experience, but hardly unique or noteworthy.
Here's an interesting video in which Jeff Ubben talks about ValueAct's approach to active investment management:
ValueAct, according to Reuters, will be prevented from launching any proxy action against Microsoft while serving on the board. But, in a sense, ValueAct has become a "senior equity shareholder" to other larger, non-insider equity owners of Microsoft. Why?
Can their stake change while they serve on board? Hopefully not. They could turn out to be a source of ideas to restructure the company, which I would believe would be along the lines we wrote about, which is about a fundamental rethinking of how capital is allocated within a different corporate structure. The problem is that the option of getting feedback and ideas from shareholders is always open to a savvy management with open communications with all of its shareholders. Handing a board seat to a small investor in order to get ideas hardly seems like a "value."
Just like Steve Ballmer's announcement, the timing and content of this announcement are quite peculiar, and it should be explained by the company, beyond shareholders having to read a Reuters news story.