I have never been a member of a Board of Directors, but I have been sufficiently near to one or three to learn a thing or two about how certain things work. It might be useful to share a couple of thoughts on this for those who have less experience of these office dynamics.
First: these Members of the Board are not, or not in any meaningful way, invested in the Company’s long-term success. They are employees, not owners.
Second: these members of the Board have one goal in mind, the renewal of their contract.
Third: these members have someone, within the board, who would like to see them out. More importantly, there is also someone who is waiting to leave a mark for himself (contract renewal, perhaps advancement to CEO or Vorstandsvorsitzender), the sort of “junior but smart member”, “fresh thinking”, “future of the Company” guy (or gal).
Fourth: the Supervisory Board is, often, also not made of people directly invested in the long-term welfare of Company. They are “old glories”, people coming from prestigious institutions of the same kind, people put there by investors, but who are not themselves the investors they represent. Their investors (say: funds) are, themselves, steered by employees, repeating the game one level up.
If you put all this together (granted, the elements might play in a different way in any company, but I have seen each of these elements clearly at play more than once), you can better understand why, in one week, momentous decision can be made, perhaps even destroying valuable brands after immense amounts of money to create, establish and protect the goodwill.
Bad Lives Matters (not, not a typo) starts to make noises. In the Board meeting, “rebel guy” puts himself at the head of the movement, and proposes “change” in a kind, very polite, but forceful manner. The times, they are ‘a changin’, and all that. His risk is limited. He is “change guy” after all. He knows, also, that he rides the wave of modernity, and it is dangerous to shut him down. There will be no major shareholder telling him: “Shut up, you stupid boy. I haven’t created this Company from scratch to have a nobody like you destroy all I have made”.
At this point there is a huge wave coming down, and “change guy” (or gal) is happily surfing on it, perhaps seeing himself as the next CEO already. Who will be the first who stems himself against the wave, and risks getting “change guy” (including surfboard) on his teeth? All too often, nobody. If it goes badly, it will be the end of his contract renewal chances, because “change guy” wants to go up, and has his knives sharpened. There might be calls for his head, too.
It needs love for the company, commitment to the workers, and a great amount of personal integrity to put oneself in the middle of the firing line and draw one’s Peacemaker, come what may. But the Boards I have known and worked with had no Gary Coopers in them, and no desire whatever of a High Noon-style confrontation. How many Boards in the West are like the ones I have experienced? Not all, for sure; but very many, I am afraid.
Does it mean that these board members really agree with the agenda, or care for the Bad Lives Matter (no typo) movement? Certainly not. They are doing what is safe to survive. They always knew that “change guy” (there is often a “change guy”) wants to go up fast. They also knew that their effective seniority in the board can be easily nullified by other facts: say, several wives of Supervisory Board members are on the side of Change Guy, or the Supervisory Board Members are invited to too many rich-liberal-infested parties to really be on their side. They have their agenda, too. They don’t want to be sidelined, or be considered dinosaurs by their influential acquaintances. They might represent other, PC corporations, and they don’t want to be more realist than the King. I know what they’ll be thinking: “Hey, it’s your money after all”.
And this is, in my experience, how it goes. It does not need a big initial impact. It is like a big domino play where the first piece is the “change guy” (who has been eagerly waiting for something giving him more “profile”) and the rest happens from itself, because no domino piece after the first is strong enough to put an end to the game.
Similarly, decisions can be made, which everyone considers bad, but which are made because… it’s the safe thing to do at the moment. I have seen it happening. It really opens your eyes about the way in which those who are supposed to protect the shareholders go about their job.
I have seen this dynamic at work in relatively conservative companies. I can only assume that this dynamic is absolutely brutal in more or less “woke” companies with diffused property, where there is no dominant figure, and the domino game can build really fast. I am absolutely sure that many, within these companies, know that the woke fashion is madness. But they don’t want to be crushed trying to resist the wave of falling domino pieces. It is enough that one starts it (and one always will), and the “get woke, go broke” dynamics comes into play.
And there you have it: