When boards do battle, sometimes the consumer wins


Activist William Ackman lost his battle to implement some change in Target's board of directors. It was a good fight, a long and ugly fight that cost him an estimated $10 million, but one he lost. It's a blow to corporate gadflies everywhere, but at least he showed up. And some of what he pushed for is actually turning up in stores, to a shopper's benefit.

Ackman owns approximately $55 billion in Target stock, but wanted a seat on the board of directors for himself and few friends. His hedge fund Pershing Square Capital Management controls nearly 8% of the retailer's outstanding shares, and has been pressuring management to compete more directly with Wal-Mart on price by expanding the assortment of grocery items in stores. Management didn't like this.

Nevertheless, Target has expanded the food selection in the discount stores and continues to build supercenters with a full grocery selection. Some of Ackman's other initiatives, like selling and then leasing back company-owned real estate, seems foolish right now, even to a layperson, and probably won't go anywhere. But more items at low prices offering an alternative to Wal-Mart? How is that bad for customers?

Corporate gadflies and shareholder rabble-rousers are often discounted, but sometimes they bring a lot to light. A company is usually a poorer place without them. There are plenty who don't think shareholders should have any say in running the company. But sometimes these insider battles actually end up scoring a win for consumers.

Originally published