What is a 'dear board-brief'?

"Dear Board-brief" is a letter from an activist investor to the management board of a company, in which the investor tries to convince the board to take certain drastic decisions. The letter is usually a formal starting point for exerting pressure on the board and takes its name from the salutation, which often begins with "Dear Mr. CEO..." or "Dear members of the Board of Directors...".

Before the letter is sent, the investor has often already built up a shareholding and carried out a thorough analysis of the company. One-on-one conversations may also have already taken place with the board. If these conversations do not lead to the desired action, the Dear Board-brief is sent to put the demands on the table and to place certain subjects on the agenda of the general meeting of shareholders (GMS).

The activist investor often seeks allies early on to reinforce their plans. If the board does not respond, the pressure is further increased via critical statements in the press, social media, or even by initiating legal proceedings.