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From: "G Stolwyk" <>
Date: Wed, 27 Dec 2000 00:09:43 +1300

Let us talk about Directors, who are in one of the following groups and who
(1) Think that the company must have its own executive plane and want the Board to make it a priority item on the agenda.
(2) Feel that such a highly visible item should be exchanged for some Bentleys and a luxury office with plenty of entertainment! 
(3) Don't want planes, Bentleys or luxury offices but want increased fees to be the first item of business. They feel that because they are called 'directors', they are entitled to more money. They hardly work or prepare for meetings.
This will result in the CEO and/or Chairman having to control the affairs of the company and could lead to the collapse of the firm. Not many will now be in that category.    
(4) Say, that because more stringent rules apply, they now have to work harder. Cynical shareholders say that these directors relied on the CEO 'carrying' the Board, and were not sufficiently active before the change of rules!
(5) Are the so-called professional directors. They can earn a tidy sum when their directorship's fees are added up.
Some perform quite well; others don't because they can only talk about balancing the books.
Some attend meetings of too many companies and may produce mediocre results. 
6) Use their position mainly for share trading.   
(7) Do work and question the CEO when clarification is needed. Many perform very well.
(8)  Are Chairmen or CEO's. Their performance varies.
(9) Top flight Chairmen and CEO's.
NZ has not enough of these. They are well known and deal with very complex matters. 
I don't begrudge their salaries or options! Given time, they tend to attract excellent board members as well. Some restructure large rundown companies.
They always look for ways to grow the company. They are the company!
H: Would you agree that groups 1 and 2 were 'wiped out' in the 1987 crash? Many directors of these 2 groups were incompetent and tended to attract their own kind. 
Publicity was their tool and this never discussed the true cost of acquisitions.
Once they obtained majority control on the Board, the fate of the company was sealed.
Yes, and some like to come back!
Shareholders- particularly those of unlisted companies- will need to keep track of Management contracts.
Some can be very onerous and/or may not be fully disclosed.
G: An investor needs to refer to the CV's of the directors and look at the composition of the Board. This should reflect the nature of the business. An example could be SKC, their website: < >  This company has a highly regarded CEO, Board and Management who are focussed and have a vision.
The departure of a competent CEO can have a detrimental effect on the share price.
When a new Board takes over, it is possible that, given time, a company will perform very well. An example could be AFF, their site: < >. They are also rebuilding an existing plant and the outcome of their restructuring will be closely watched!   
(Holds SKC and AFF)    

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