Relational Investors and Home Depot

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Professor Jay W. Lorsch and Research Associate Kaitlyn A. Simpson prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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Ralph Whitworth
After a childhood spent hopping from town to town in the Nevada desert with his geologist father, Whitworth moved east to attend law school at Georgetown. While there, Whitworth served as a legislative aide for Senator Paul Laxalt (R-Nev), which gave him a strong understanding of the changing landscape of corporate law and regulations.4 Laxalt was campaign chairman for Ronald
Reagan, and Whitworth worked on Reagan’s 1984 re-election campaign, learning the power of the media to advance a cause.
After graduation, he joined Mesa Petroleum, the company founded by T. Boone Pickens. Working side-by-side with Pickens—an oil tycoon-cum-corporate raider-cum-shareholder activist—Whitworth became interested in revitalizing underperforming companies and improving corporate governance.
With Pickens, he and his future Relational Investors co-founder, David Batchelder, took part in “epic takeover battles” for oil and mining companies.5 Prompted by falling oil prices in the early 1980s,
Pickens’ corporate raids were intended to reverse declining profits. Pickens amassed stock in oil companies he felt were poorly managed and could not easily resist his takeover bids.6 Pickens did not consummate many bids, but his offers drove up the stock price of the companies he attacked, and he made millions of dollars when he sold his shares. At the same time, Pickens publicized corporate abuses and shook up boards and management,

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