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 / Winter 2006 / Issue 45(originally published by Booz & Company)


Best Business Books: Governance

Such knowing detail sheds light on the clubby world of professional investors, where the Scotch and beef are always aged and the denominations of currency sloshing around have lots of zeroes. Mr. Biggs writes most engagingly when he takes readers inside such exclusive sanctums as Morgan Stanley’s annual hedge fund conference at the Breakers in Palm Beach: “There are many tribes at the conference. First, there are the professionals.... They have bored, cynical stares and limp handshakes. Then there is the rest of the crowd, the amateurs, mostly wealthy individuals and small, wannabe funds of funds. Germans with bulging eurobellies from family offices mingle with bloated Arabs in pale suits and white shirts, their handshakes as cool and clammy as snakeskin” and “vastly rich investors with homes in three climates” and “wealthy divorcees and widows with artificial brightness in their un-pouched eyes. Are they looking for a man or a hedge fund?”

After a while, Biggs’s descriptions of women, in particular, as greedy and way too possessive of their husbands’ hard-earned money, not to mention overly nipped and tucked, grow tiresome. Although the world of hedge funds is still dominated by men, it’s hard to believe that there aren’t a few smart women in there. Biggs does attempt to address this two-thirds of the way into the book, explaining that although the “vast majority of male investors accept that women are just as smart as men,” they “don’t believe that women are capable of playing the money game.” Equally frustrating is that Mr. Biggs admits to using composite characters so readers won’t be able to identify individuals. This technique doesn’t belong in a work of nonfiction. Despite these shortcomings, the book is a very enjoyable, not to mention insightful, examination of an echelon that most of us know very little about, but that controls an ever-larger chunk of the world’s assets.

All three of these books illustrate in vivid detail just how much corporate governance has changed over the past five years. Questioning a CEO’s business decisions or even his management style used to be the province of corporate gadflies who would vent their frustration at  the annual meeting and be viewed as a sideshow. Now, even professional money managers — the polar opposite of the lone shareholder — are voicing their concerns, and with surprising results. Their interest and, perhaps more important, their votes, have led to radical changes at several large companies, including Disney and Ford Motors Company. Is there more work to be done? Absolutely. With more than 13,000 publicly traded companies out there, it’s hard to snap your fingers and institute a “shareholders first” strategy overnight. But given the massive abuses that investors have experienced, even small changes are welcome.

Author Profile:

Michelle Leder ([email protected]) is founder and editor of, a Web site focused on governance issues. She is the author of Financial Fine Print: Uncovering a Company’s True Value (Wiley, 2003).
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