Starboard Value is seeking to overhaul Yahoo Inc.'s board, including a company founder, but its intention screams "terrible governance," according to former Office Depot CEO Steve Odland.
"Activists play an important role, particularly in companies that are underperforming or where their boards are unresponsive," he told "Power Lunch." Still, "they are essentially enacting a nonpremium takeover of the company," noting that building a company board that lines up with a specific leader's idea raises concerns.
Starvalue holds 1.7 percent of Yahoo shares. The activist hedge fund's discontent comes as it perceives Yahoo has failed to deliver a turnaround for the company.
In the last year the stock has plunged 21 percent, but has held up 5 percent year to date. Yahoo traded slightly lower on Wednesday.