Conference 7.286::dcu

800.0. ""Qualified boards" scare me" by STAR::PARKE (True Engineers Combat Obfuscation) Mon Mar 28 1994 13:17

            Hmm, I think it is time to start another note Perhaps).

    This "qualified board" and "Need's accounting/banking experience"
    is for the boards.

    I have just received annual reports, in the last 5 weeks, from 12
    corporations in which I own stock, and notice an interesting pattern.
    I will leave specific answers to others, as I don't want to poison my
    portfolio's performance by naming my successes or failures, as they
    are current }8-)}


    Now, a few things to ponder (Chuck, Lisa, at al, are you listening?)

    	How many board members of a major auto corporation have either
    		built, or sold a car (or are even interested in how one
    		works) ?

    	How many board members of a MAJOR bank have any resume specific
    		accounting (raw accounting, not "runs a business")
    		experience?

    	How many members of the board of a major food company have
    		ever has a Far, run an assembly (packing) line ?

    I think, if we were to draw a parallel with the "qualified board" memo,
    it would scare you just on that basis.

    ALL of the boards in these corporations were composed of greater than
    50% of outside industry (the one for whom the board toils) personnel,
    at least according to the biographies.


    The STAFF of a Bank (President, perhaps COB, and other company
    employees) are supposed to do the day to day running of the business. 
    Their presentations MUST be understandable to the body of the board,
    which should have very diverse experience.  If it is NOT
    understandable, the boards of these corporations would send them back
    to try again and NOT just vote in lock step with what the staff
    recommends.


    The BOARD of these corporations oversees the staff and provides
    guidance and control from the point of view of the OWNERS
    (stockholders) of these corporations.   A diverse board will provide
    better oversight, because they DON'T know the "ins and outs" of the
    business at hand, but DO have a lot of experience to apply and points
    of view that DIFFER from those of the staff.

    The result of this mix in these 12 cases IS A LOT OF MONEY AND PROFIT
    and SYNERGY at the top.;

    WHY MUST WE AT DCU NOT AVAIL OURSELVES OF THESE BENEFITS?

    WHY MUST WE HAVE A "QUALIFIED" BOARD WITH ALL OF THIS BANKING AND
    ACCOUNTING EXPERIENCE ?

    WHY DOES THIS SOUND LIKE AN OLD PERSONS (BOYS/GIRLS) CLUB ?

    Gee, where are McNeal and Buda when you want them?  }8-)}
    
    
    And, a few comments as to the CONS (documented/documentable) as to why
    these "qualified" boards scare me.
    
    1)  Was not the board a "Qualified" board when C Mangone did his thing
    	?
    
    2)  Don't some of the most unmitigated disasters in banking point to
        boards heavily from the "industry" (or (shudder), law)?
    
    3)  Isn't it companies with "qualfied boards" (insiders) who have narrow
        views, and no vision of the marketplace, and therefore tend to be less
        successful (unless they make something like toilet paper which
        EVERYONE HAS TO BUY).