Beyond Our Wildest Expectations
from November/December 2007
What's the most surprising thing that's ever happened to you as a director?
It's tough to top getting word that you're being sued for $300 million.
My biggest surprise was in a company ballgame, the General Maritime softball outing. They caught the ball I hit and had the nerve to throw out the head of the compensation committee—me! I thought they gave directors more respect.
Peter S. Shaerf, 53
Managing Director, AMA Capital Partners LLC, New York City
General Maritime Corp., TBS International
More than 25 years ago I was the CEO of a company where the chairman was the major shareholder and he wanted to do something that was illegal. I explained to the board that it was illegal and that I was voting against it. They voted for it, because he told them that he owned the majority of the stock and he needed to do this and they said, “What the heck.” I quit and they didn’t, and it was very shocking. It was shocking that they didn’t do the right thing. He ended up selling the company a year later, before anyone brought action on anything illegal. But the epilogue is that about four or five years after that this chairman was at another company with his son, and they were indicted for fraud there. The son went to jail for four years, and the father got off on a technicality. Somebody should have put a stop to this guy earlier, before he ended up throwing his son overboard.
Dennis McCuistion, 65
Financial and Strategic Planning Consultant, Denison, Texas
Affiliated Computer Services Inc.
We have kidnapping and ransom insurance. Our insurance will pay for ransom if someone takes the board. I didn’t realize we had that.
William M. Drohan, 53
President, Drohan Management Group, Reston, Virginia
Alliance Bankshares Corp.
One of the first boards I was on, the CEO developed a pathology. And as the only medic on the board, I understood the consequences and how a company could be driven by an illness. Eventually the company had to be sold.
Ronald N. Riner, M.D., 58
President, Riner Group, Naples, Florida
Angelica Corp.
I once was sued for $300 million. It was during the S&L crisis; I was on the board of a large savings-and-loan company that got into trouble, and was sued along with the other directors. It was the most shocking thing in my career. It was a long lawsuit and ultimately settled for a tiny fraction of the original amount, and was paid by the insurance company.
Stuart I. Greenbaum, 70
Former Dean and Emeritus Professor of the John M. Olin School of Business, Washington University, St. Louis
Reinsurance Group of America
I was part of Tronox’s spin-off from another corporation. I thought that the former directors would stay on the board for continuity after the spin-off, but they all resigned, leaving me and another director as the only remaining independent directors.
Bradley C. Richardson, 49
Executive Vice President of Finance, Modine Manufacturing, Racine, Wisconsin
Tronox Inc.
It’s not surprising anymore, but early on it was the real commitment you have to make to do this job. You can’t do it halfway. You can’t just call it in. The preparation for board meetings is critical and could be multiples of the time actually spent at meetings. It’s just like studying for an exam when you’re in college.
Joseph M. Cianciolo, 68
Former Managing Partner in the Providence Office, KPMG LLP
Eagle Bulk Shipping Inc., United Natural Foods Inc.
I had been CEO of a company for less than two weeks and I get this letter from Calpers [the California Public Employees’ Retirement System], a big shareholder, informing me that because of our lack of response to a prior letter and the company’s weak performance over the last three and five years, on Monday morning they were naming the company as one of the five worst-managed companies on the New York Stock Exchange. So I get on a plane and go out and see them and say, “Hey, I was just brought in to turn this company around and I have some ideas and I’m developing those, but I need some time.” I was kind of begging for mercy. I think they appreciated me coming out and talking to them, but their response was that they weren’t sure my board was behind me, that my board was weak and my board members needed to be replaced. That was difficult, and surprising. But I went back and confided in two very strong directors I respected, and they acknowledged that Calpers was probably right. And I worked with those two directors over the next year and replaced most of the other people on the board. I also wrote a letter to Calpers telling them what we were trying to do, and one year later they wrote me another letter complimenting me on the progress the company had made and its performance, and said that we were now probably one of their best-managed companies.
Robert R. Womaek, 70
Former Chairman and CEO, Zurn Industries, Addison, Texas
Commercial Metals Co.
