Book Review: A Weekend with Warren Buffett and Other Shareholder Meeting Adventures

If you read just one book about corporate governance in your entire life, Randy Cepuch's A Weekend with Warren Buffett and Other Shareholder Meeting Adventures is certainly the most entertaining pick. It might even be the most informative as it teaches the one thing that you really need to understand about shareholder democracy. In Cepuch's words, it's "pretty much a myth."

In this slim, readable (I read it in one night) volume Cepuch attends the annual meetings of companies including Berkshire Hathaway, Starbucks, Google, Playboy (It's surprisingly unexciting), Bowl America, and Disney (the 2004 showdown over Michael Eisner). He discusses and grades the presentations, meals, free giveaways (from a wine tasting at Chalone's annual meeting to a coaster set and free magazine at Playboy's), and the entertainment value of each meeting.

The one recurring theme is the level of disdain the management teams show for shareholder proposals, and the rabble rousing questions of gadflies like Evelyn Davis. Votes are nearly always mere formalities because institutional investors almost invariably side with management and it is not possible to vote against a director -- You can withhold your vote but that's it. This entertaining little book shows the serious problems surrounding corporate governance in America. Some Carl Icahn quotes that come to mind:

"Too often it's not the most creative guys or the smartest. Instead, it's the ones who are best at playing politics and soft-soaping their bosses. Boards don't like tough, abrasive guys."

"We have bloated bureaucracies in Corporate America. The root of the problem is the absence of real corporate democracy."

"With some exceptions, the wrong people are running U.S. companies. It's been that way for years, and it hasn't gotten much better."

This book makes a compelling case for the need for activist hedge funds and investors like Carl Icahn and Daniel Loeb. Most of all, this book is just pure fun to read. Randy Cepuch is laugh-out-loud funny, and former SEC Chairman Arthur Levitt summed up the book well: "Cepuch's wonderfully readable book, with revealing dialogs between stuffy executives and passionate shareholders is an object lesson in corporate governance."