Win Swenson: First of all, the director’s interest in the supplier by now should have been fully disclosed to the board and management pursuant to Globetech’s conflict of interest policy. Second, it is good that the director has apparently resisted the supplier’s request that the director become more involved – the supplier should be able, on the merits and according to Globetech’s regular procurement policies, to have meetings and provide information on its own without “special” help from the director.
The question remains, is the call the director did make – which could have been meant entirely to be helpful – also out of bounds? Interestingly, when senior, non-executive board members are asked whether they think this call would be OK, they often say yes, seeing the good intentions behind it. When senior executives are asked this question, they more often say no. They say that when you receive a call such as this from a board member, it is impossible not to perceive it as pressure – no matter how well-meaning. Executives can see the call as evidence that “I have you and this deal in my sights, so don’t screw it up”. If the director making the call also sits on a compensation or other committee with influence over a senior executive’s career, then the pressure can be even greater. Board members should resist the temptation to be “helpful” in areas where they have a personal interest.
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