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What really is happening at board level

So, I read the situation quite wrong in my earlier blog, and the member of the board who got up and walked away was not just bored with the talk, but annoyed that her arguments were not listened to.

At least I had the sense to suggest I didn’t have any inside knowledge on the goings on in the corridors of the Ems, but with Lady N’s commentary we now know a lot more.

The Lady says that she was fed up that the board was run along the lines Frizman said, rather than anyone listening to her, even though their shareholdings were nearly equal.

This is certainly odd, and for once it does venture into an area where I have a clue what I am talking about (me being the chair of a plc and all).

Every board of directors that I have been on is dominated by argument and debate which has nothing to do with the number of shares you have.   You are on the board because you have something to contribute to the development of the company, not because you own the company.  Quite often you have a mix of share owners and those who have zero or few shares.  I have never ever known anyone be so crass as to mention their percentage ownership in relation to board policy.

Imagine this scenario (and I take out the names so as not to make it too personal)

Member A argues for a new stadium, and presents statistical analysis about the ability to fill it, figures on costs and the like.  He refers to the waiting list for tickets at the current stadium.

Member B says, “just because we have a waiting list we don’t know they will all turn up if you give them tickets.  People say they will do all sorts of things, and they don’t.  Supposing 38,000 is all we will get.”

Member A says, ok, I don’t think much of that argument, but I tell you what, let’s play our European games at Wembley.   If we can get 75,000 there, then I reckon we can get 60,000 to a ground just round the corner from Highbury.   So they do that, prove it and the plan is back on.

Member B: I still don’t like it – Highbury is our home.  We’ve been there since 1913.  It’s home.  I don’t like all this modern stuff.

Member A: That’s an emotional argument.  Emotion is important, but I can show facts and figures on how, if we don’t move, we will slip down the league because we won’t generate enough money, and top players won’t want to come here.

Member B: All these facts and figures.  You can make statistics say anything…

And so on.  I’m sure you have come across this sort of thing before – one person arguing emotionally and one arguing with stats and logic. Of course I don’t know if anything remotely like this happened in the board meetings at Arsenal, but it would be unusual if it did not.  I’ve certainly seen it many times – and normally the best thing is to get that person off the board, or simply to ensure you out vote that person each time an issue arises.

If (and it is pure supposition on my part) this is what has been happening at Arsenal, then the upheavel of recent months has been in a good cause.  A complex operation like Arsenal needs minds of the highest calibre on the board, and maybe that has been something that has been missing of late.

5 comments to What really is happening at board level

  • Will

    …and if the insane people outnumber the rational ones?

  • FunGunner

    Then the company or the club goes downhill.

  • And if the insane people outnumber the rational ones, then the company falls to bits very quickly, because its decisions lose the company vast amounts of money.

    The fact that Arsenal has witnessed the situation seen this week suggests that if my thoughts on what is happening behind closed doors is right (and of course it is only a supposition – I have only the evidence of public statement) the rationale approach has been winning through quite satisfactorily. and will continue to do so.

    Tony

  • don't believe the hype

    I don’t know much about the business background of the ex-board member, but as you say just being a shareholder alone should not be a reason to sit on the board if what you need is hard nosed business people or people with football or sport knowledge.

    I just hope that when she says she has no intention of selling her shares, that she is in a position to do just that and does not react emotionally to being ousted and decide to cash in.

    All we can do is focus on supporting the team while we wait and see what the fall out brings.

  • jbh

    Something doesn’t add up. No reason not to keep her on the Board unless she has done something completely unacceptable. Most Boards have some members that are not of the top rank, and she has been loyal and an important part of the lock down. I suspect conversation was more like this:
    Person BS My how our position is going downhill re value of shares, I could have got X 6 mths ago.
    Person A We need to be patient re property and other matters, now is not the time to sell
    BS But I have to protect my family wealth. K – can you guarantee that you will buy my position at X ?
    K No way
    BS Then I think that we should speak to U. At least he can guarantee X in this difficult market
    All together now: No No No

    Lack of loyalty did for Dein and I think it may be the reason for BS going.