One thing I think about - imagine you get appointed to the Board to a public company, a company with $150 million in annual revenue and about 1000 employees. This would be a medium sized company. You appoint a CEO with two bankruptcies and you don't tell any of the shareholders the process you used to hire that CEO. The CEO lies to your …
One thing I think about - imagine you get appointed to the Board to a public company, a company with $150 million in annual revenue and about 1000 employees. This would be a medium sized company. You appoint a CEO with two bankruptcies and you don't tell any of the shareholders the process you used to hire that CEO. The CEO lies to your face in order to get capital from the bond markets to do a big building investment but also doesn't build the building. He uses your COVID relief money to give contracts to his friends. He also moonlights with a recruiting firm (with Board OK) and hires away your top employees to a third company. The CEO then bounces to a bigger company, while using the company card to relocate. He then owes you fines related to breaking his contract and uses a subordinate to proxy the (late) payments for him.
And the whole time, you're like "he's our guy!"
Then all of a sudden, when the shit hits the fan, you're like "Oh wow, we didn't have any financial controls? I had no idea!" - the shareholders would sue this board into orbit and YOU, the Board Member could actually go to jail. You'd at least be tied up in litigation for years and it would be misery.
I also think it's worth reminding people that the board members responsible for appointing said CEO brought him in with high pressure/expectations to get said "big building investment" done, to the point where other potential warning signs were overlooked and dismissed. Including the estimated annual savings on bussing magically amounting to exactly the annual repayment of the loan .
One thing I think about - imagine you get appointed to the Board to a public company, a company with $150 million in annual revenue and about 1000 employees. This would be a medium sized company. You appoint a CEO with two bankruptcies and you don't tell any of the shareholders the process you used to hire that CEO. The CEO lies to your face in order to get capital from the bond markets to do a big building investment but also doesn't build the building. He uses your COVID relief money to give contracts to his friends. He also moonlights with a recruiting firm (with Board OK) and hires away your top employees to a third company. The CEO then bounces to a bigger company, while using the company card to relocate. He then owes you fines related to breaking his contract and uses a subordinate to proxy the (late) payments for him.
And the whole time, you're like "he's our guy!"
Then all of a sudden, when the shit hits the fan, you're like "Oh wow, we didn't have any financial controls? I had no idea!" - the shareholders would sue this board into orbit and YOU, the Board Member could actually go to jail. You'd at least be tied up in litigation for years and it would be misery.
That's all wild when you put it like that.
I also think it's worth reminding people that the board members responsible for appointing said CEO brought him in with high pressure/expectations to get said "big building investment" done, to the point where other potential warning signs were overlooked and dismissed. Including the estimated annual savings on bussing magically amounting to exactly the annual repayment of the loan .
I think that's absolutely true - I think certain board members were like "by any means necessary" and he was OK SURE
One thing to add: imagine that much of this was known by the public more or less contemporaneously because it was documented in the press.