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Even rarer than a white truffle

A few weeks ago, I wrote that when a director resigns and includes a letter explaining why they resigned, it was as rare as a white truffle. In a typical year, there’s typically fewer than 10 of these letters, even though director resignations are one of the most common 8-Ks filed. In this case, a former director at Werner Enterprises claimed that he was dismissed from the board because he questioned the number of related-party transactions.

So imagine my surprise when I was looking at Werner Enterprises for a different project and came across a second letter from that very same former director, Vikram Mansharamani. In the letter, which was dated March 5 and filed with the SEC on March 7, the former director says that he was not renominated to Werner’s board “for the very reasons I resigned”.

The letter went on to raise concerns about a nearly $400K contract awarded to a board member and the company’s over emphasis of ESG issues — not to do the right thing, but “to improve an ESG scorecard”. It also noted that by not renominating Mansharamani, it sent a message to board members to conform, or they too, would be asked to leave. As Manshararamani wrote: “get on board with our views or you’ll be off the board.”

As an outsider looking in, it’s essentially impossible to say who’s right here. What is clear is that this type of dispute is almost never made publicly. It’s much more common for those with a short position in the stock or an activist investor to point out problems. But two letters from a former director? That is very very rare!