Microsoft’s newest board member, G. Mason Morfit, is the president of ValueAct Capital, and at 38 years old, he is by far the youngest member of the board, which is otherwise populated by industry veterans in their 50s and 60s.
His appointment to the board is the result of the “cooperation agreement” struck between Microsoft and ValueAct Capital last August, which included an option for ValueAct to place Morfit on the board. At the time, ValueAct had accumulated Microsoft shares totaling about 0.8 percent of the company.
ValueAct wants Microsoft to reduce its focus on Windows, speeding up its efforts to put Office and other Microsoft applications on competing operating systems including iOS and Android, according to a report by Bloomberg News last month.
But much of Morfit’s work won’t be visible to people outside the company, or even outside the board. During an an April 2012 lecture series sponsored by Stanford Law School, Morfit explained the company’s approach to “activist” investing. Here’s a key excerpt from his remarks.
Everybody wants to talk about the latest scandal of the day, or the sexy conflict in the Wall Street Journal. That is a small, small minority of shareholder activism. As our firm evolved through the last decade, we’ve tried and failed and tried and succeeded at a lot of things. We’ve done proxy fights, we’ve done public campaigns, we’ve done very media-driven efforts. But we’ve found that the most effective thing we can do is working behind the scenes and building on our network, and, in a collegial spirit, influence companies. So the lion’s share of our success is due to stuff that you have no idea ever happened.
He added later, “For us it’s just a truism that people will do want you want if they like you and you haven’t publicly humiliated them. … You’re much better off, in our experience, influencing people through the power of fact-based analysis, relationships, introductions, earning trust.”
Morfit, a Princeton grad who previously worked in equity research, has been with ValueAct since January 2001, serving on a variety of boards at public companies, but none as big as Microsoft. Along with new Microsoft chairman John Thompson and CEO Satya Nadella, he is part of an overall changing of the guard at Microsoft that creates the potential, at least, for a much different type of company in the years ahead.
Here’s the full video of Morfit and former BlackRock executive Abe Friedman talking about activist investment strategies, part of a three-part lecture series at Stanford two years ago.