By:  Diane Benjamin

Pretend a big corporation has a CEO and a Board of Directors headed by a guy who tells the CEO what to do.  Most on the Board believes anything they are told and never look for facts themselves.  The Board fails to realize they have a responsibility to the stockholders, they happily support the CEO and the head Director.

Then the CEO is caught lying to the Board and spending money they never authorized.  The CEO is caught red-handed violating company policy.  Does the Board take action against the CEO?  The head of the Board wants the rest of the board to be clueless so policies are never questioned.  Some on the Board think they should always agree on everything.  The Director makes sure the majority of stockholders are clueless about the company’s financial condition and the CEO’s performance.

The corporation is failing because the CEO isn’t capable of creating realistic budgets.  Some of the stockholders have noticed the CEO is inept, but the Board is still silent.  The Director doesn’t care because he thinks the company merchandise prices can be raised without any consequences.

The Director of the Board doesn’t want the CEO replaced because he completely controls the CEO.  The Director claims the CEO isn’t responsible for any problems, the Board stills supports both the CEO and the Director.

Stockholders get angry, the Director calls them nasty names.  The stockholders get angrier.

Does the Board ever realize they work for stockholders?  Does the Board ever realize the Director lives in fantasy land?  Does the Board ever realize the CEO isn’t performing his duties?

Do the stockholders sell out and abandon the corporation?  Will the Board of Directors even notice if they do?  Will the stockholders boot the Board and demand accountable management?

How bad does the CEO’s performance have to be before the Board snaps out of their trance?  Bankruptcy?

 

Answers to some of these questions this week!

.

.