I’m now on 3 mfg company Boards (have been on 10 Boards total – some PE/VC portfolio companies). They all are/have been different but as you said, we directors “are the fiduciaries of all shareholders”. I went to a 2 day conference in DC last week called “Private Company Governance Summit 2013” organized by the 2 magazines Family Business and Directors & Boards. Great conference – good talks by both PE types and well known family company execs.

Your comment “”never get mad at the money, it will change its mind.”

Good one – I think I’ll steal it and use it.

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Jim, great comment and the voice of wisdom and experience — Boston accent or otherwise. Hey, everyone loves folks from Boston. I think.

Boards have an awesome responsibility. They are the fiduciaries of all shareholders. When one explores the duties of a Board, it is difficult to see how anyone with even a modicum of wisdom or judgement would ever agree to sit on a Board.

A Board’s responsibilities are never really examined until something goes wrong — as it will almost always eventually. When the sun is shining, the Board could be in Aruba and nobody would ever really know whether they are doing their jobs.

A seasoned executive knows that the instant he takes OPM, he has set the watch to ticking until he will eventually be replaced or exit under his own power. Rarely, rarely does taking OPM result in a peaceful and long term relationship without substantial and meaningful change.

Why should it? The new money is intended to fuel change by its very nature.

Executives, even when owners, need to know that they have lit the fuse when the check clears. There is no reasoning or equivocating with money.

I always say — “never get mad at the money, it will change its mind.”

Like any organized team sport, business requires a clear game plan and a damn good score card to track progress. When the plan is not working, the plan has to be changed.

BRC
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The Ledge struck a chord. Not at you, just the topic in general. I happen to be one of those ‘favorite big name MBA types’ (at least I think). In my opinion there are generally 2 categories of these people who populate the company Board meetings. Type #1 MBA is someone who knows what it is like to sit on the management side and doesn’t mind wandering around the company and talking and listening to all the real people. Type # 2 (probably the Type your Ledge friend has to deal with) is generally very smart, but clueless about operations, people, culture, etc. I hope I am in Type 1. Even being a Type 1, I have sometimes been lumped into #2. Consider the conversation I once had with a self made founder of a struggling, PE backed mfg business located in the South…he told me that he had no intention of ‘listening to a f**#k^^g, Ivy League MBA from New England’ (heavy emphasis southern accent on Ivy League and NE). Well now, what to do here!. I asked this gentleman if I was supposed to jump on the next plane north or were we going to settle in and fix the company he and his team had totally messed up? We fixed the place. Here is how: http://mchughco.com/operational-inefficiencies-hurt-cash-flow/. With respect to owners like this guy and maybe your Ledge person, I say ‘be careful what you wish for’. You want the $$ from the PE and VC folks, be prepared for the full range of consequences, i.e. do your homework and understand what that firm is like to deal with. I could go on about many other examples, but better over a skype call again. And your point about communication…could not agree more. Over communicate with these investor folks – I learned the hard way that ‘surprise’ is not something that goes over well.

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When in trouble — always remember first to continue flying the airplane.

Aviate, navigate, communicate, confess the problem.

BRC
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