The piece doesn't really expand on their tendency to overreach, other than saying that Carl Icahn's push to remove YAHOO!, Inc. (NASDAQ: YHOO)'s entire board of directors "seems excessive", even though that board badly mishandled a takeover offer from Microsoft Corporation (NASDAQ: MSFT), resulting in a crumbling share price.
Is Icahn overzealous? Perhaps, but that's a matter of opinion. What isn't a matter of opinion is this: corporate executives and directors can have many motives. Good corporate governance aligns their interests with those of shareholders, but issues of job security, empire buildings, relationships, and emotional ties can often reign supreme over a commitment to shareholder value, especially when an executive owns a small chunk of stock and receive a large cash compensation package.
And then there are the activist investors, mercenaries who only get paid when other shareholders get paid: when the stock price rises, and stays high. Criticism of activists as short-term in focus is badly misguided. They tend to own large blocks of stock that can't be easily liquidated on a short-term run-up. Only a sale of the company or the creation of long-term value helps activists make money.
In terms of motives, there's no question: the interests of activists are always more closely aligned with shareholders than those of executives and directors. For that reason, I think investors should generally be receptive to the concerns of activists and always be skeptical of the current management team's response.
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