Infuriate Your Boss

Infuriate Your Boss – Chapter 22

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The following are approximately the first 1000 words from Chapter 22 of Jonar Nader’s book,
How to Lose Friends and Infuriate Your Boss.

The boss’s boss:

Infuriating directors

This chapter looks at the role of company directors, because when things go wrong, everyone wants to know what happened, and why. Knowing how passionate I can be about this topic, I decided to temper my opinions by inviting four leading company directors to contribute to the debate. I have captured the gems of advice about the duties of directors, especially independent non-executive directors, also known as NEDs (who are less likely, hopefully, to be in anyone’s pocket, and who are, desirably, ‘conscientious’).

The four directors and I agreed that it was the task of NEDs on boards to ask the right questions (and to question the answers provided by management) as to the state of affairs of the company. Unfortunately, the fear of infuriating the chairman, or challenging boardroom solidarity, shackles true independence. NEDs can feel intimidated. They do not want the city’s movers-and-shakers to receive bad reports about them. They want to be seen as one of the ‘gang’ of trusted high-brow leaders who rub shoulders with the rich and reclusive, from whom a nod is as good as a wink.

In this day and age, when corporate collapses are social calamities, we can no longer accept board meetings that are run like tea parties. Leaving things as they are is not an option in a world where a simple sneeze can infect even the most humble of investors whose entire life-savings can be wiped in one afternoon. Understandably, those who are on a gravy-train will frown upon anyone who pulls the emergency cord. When they are forced off the locomotive and made to observe the world from ground-level, they soon see a different picture, and they declare that ‘the world has changed’.

In fact, nothing has changed. It’s just that they have woken-up to the reality from which they had extricated themselves. Through ignorance or arrogance, they had distanced themselves from the real world. When they are brought face-to-face with the truth, they are shocked at the contrast.

The same naïvety continues to afflict onlookers of the corporate jungle. All of a sudden, they are concerned about share-options, executive bonuses, corporate governance, personal liability, the triple (now quadruple) bottom line, corporate social responsibility, and, of all things, corporate ethics.

Who is there to question the CEO’s obsession with the share-price, or whether indeed we need a stock market at all? While the focus has been on boards and directors, what about shareholders? Do they not owe a duty of care to the company in which they have invested (not withstanding the converse)? What about the very nature of boards? We spend a great deal of time pondering the role of boards, but we never question the need for their existence, in the first instance.

If we do not ask these types of questions either as digital-age philosophers or directors or policy-makers, then who will?

Many years ago, on television and radio stations around the world, I said, ‘Executives who daily monitor their company’s stock-price, ought to be sacked on the spot. Their job is not to monitor the stock price, but to deliver on the promises made to the customer.’ Much laughter and merriment ensued. Nasty phrases were used to describe the calibre of my grey matter.

Then, over time, my jaw dropped when Mr Richard G. Humphry AO, the then Managing Director and CEO of the Australian Stock Exchange, wrote to me to concur with my views and said, ‘A CEO should focus on the management of the business and not be distracted by the share-price.’ Fancy that. How minds turn. How sensibilities surface. How obvious things become to those who step out of the quagmire.

Mr Humphry also wrote, ‘It is important that manage-ment pursues strategic and tactical objectives without necessarily being reactive to short-term movement in share prices which often reflect market sentiment rather than necessarily applying to the performance of the individual company.’ Well done. It seems that a few brave souls were willing to jump on an unpopular wagon. Full marks to him. I wonder if that made his grey matter as questionable as mine, or if it releases me from the sin bin? Oh the penalty of foresight.

The issue of passive investors is also interesting. Yes, we need investors. But no, we do not need their money if they are going to stand on the sidelines, with no commitment whatsoever, being able to withdraw their support as fast as a telephone call to the stockbroker will allow, or as quickly as an Internet transaction will permit.

Shareholders cannot call themselves ‘investors’ if they do not understand the companies in which they are investing. They have no right to command attention or demand decisions from the board of directors if they are only interested in doubling their cash before the market crash.

What right do shareholders have, to expect senior executives to possess long-term perspectives about corporate wealth-creation, when they, as shareholders, chop and change their loyalty at the press of a button? I love listening to shareholders of this persuasion. They talk in short bursts like, buy, sell, sell, buy. And then they boast about their ingenuity with something like, ‘I made four million dollars in a single trade. Not a bad day’s work.’ It disgusts me no end. And I tell them!

I have inadvertently offended many of my wealthy friends. I never begrudge anyone making money. But for goodness sakes, go earn it. Don’t sit around gulping brandy while pretending to be a capitalist. A parasite is all I see, simply because such trading of shares damages a company’s market position, and it all filters down to the production-line where diligent workers are subjected to cost-cutting and long stressful hours that sap the energy and creativity out of their environment.


I keep telling everyone that the board is not responsible to shareholders. You won’t find a textbook that agrees with me on this one! The board and the shareholders are, in my opinion, one entity. They come together to make a promise to an innocent third-party called the customer. The board sets the strategy and empowers the CEO to run the show, while the shareholders bring ‘capital’ or ‘access’ to the table. On one side we have the brains and the muscle, while on the other we have the money and the tools. Neither side is more important than the other. Management must treat the resources with respect, and shareholders must stop thinking of themselves as the bosses. They are equals who bring something to the table. They bring finance and resources, while management brings the ideas and the labour. Together, they form one entity, called a company. They go out making promises to innocent customers who not only pay for everything (and I mean absolutely everything), they also pay a huge sum on top, and this extra free money is called profit. People seem to forget that customers pay for every aspect of every element of the product or service, as well as all the salaries, design, storage, insurance, and every imaginable expense, and having done this, customers then put their hand it their pocket and pay more. More for absolutely nothing.

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