The Sun.
London, England, 1867-09-12 00:00:00

The Management of Public Companies

A board of directors is chosen, or, in the first in-
educe at least, usually chooses'itself. A board, the
well-known action of which form of association is
to bring into prominence the worst features of each
individual member and to cast his better qualities
into the shade, is usually a compound, inconsistent,
and irresponsible artificial personage that under-

takes the management of a large business, with the
principles and details of which he is necessarily un-
acquainted, and deals with a large capital of which
it owns an almost infinitesimal share. The real in-

terest of the proprietors, and the " policy" of the
directors, are thus materially dissociated, and very
frequently opposed. It will be remembered that
the men most anxious for the dignity or for the re-
muneration of directors are for the roost part those
who desire thus to fill up the time because it is
not better employed. The anatomy of one
board might throw light on the structure of
scores. Here you have the respectable country
gentleman, engaged for his name and for the weight
that ho may add to his less known colleagues,—

anxious to keep name and weight, but seeing little
further over the green cloth spread before him than
it is convenient for the secretary to allow. Then
comes the active, shrewd, director on, or some how
or other closely connected with, the Stock Ex-
change. His influence goes to decide measures that
may be expected to affect the price of shares, to
tide matters over a crisis, or even to bring on that
shock which " must come" before affairs can mend.
Then follow two or three gentlemen, whose names
are down on many lists, and who are continually
consulting their watches and their pocket-books in
order to be in time to earn the next guinea at some
other board. You may sometimes add to these the
obstinate and .stupid director, who may in other re-
spects be a most estimable man, but who is accustomed
to make a great hole in the available working time of
the Board by insisting on an explanation of what is
patent to everyone else, though sometimes he is not
without value. Among these, or besides these, as
secretary, director, manager, or what not, may be
found the real wire puller, the man who, unseen
and irresponsible, moves the whole ; and who, if
he were the known and responsible manager,
avowedly and equitably paid for his services, and
responsible, at least iu character, for the con.
duct of the undertaking, would give it the best
chance of success. With a machinery such as
this how can we be surprised to be told one
day of a company which, " having taken legal
advice," has " suspended the proceedings" to
which they led their shareholders to look for sol-
vency; another, of one which, having paid a dividend
of 51 per cent. upon eight millions of capital in
1854, has since that time spent another eight mil-
lions without producing a shilling of additional
profit in the shape of returns; in short, from day to
day, of the scandalous results of the most imbecile or
most wanton mismanagement. A famous French
financier is said to have gained the first
capital of which he made such active use
by the simple expedient of annexing to the list
of deaths which were chronicled in a local
newspaper with which ho was connected the
name of the medical attendant on the defunct.
So intolerable, after a time, did the attention
thus excited to the results of the practice of his prey
become, that a large purse was made .up to buy off
the nconvenient chronicle. A shareholders' manual,
giving in a, legible print the names of directors of

failing and faltering companies, pointing out the
date of their services, and giving adequate indica-
tions of the state of capital account, of dividend dis-
tributed, and of dividend earned, from year to year,
might be of service to the next crop of eager pur-
chasers of " something really reliable." A better
and more business like plan has been adopted by
another large company, which, while involved
in the struggles and the expenditure of the time,
has kept to some extent out of the slough which has
engulfed its most active rival. The chairman hav-
ing intimated that the affairs of the company were
now in such a state that he could leave them with-
out peril, and that he must attend to his own in-
terests, the shareholders very wis.Ay secured the
services of a man who seems to know what he is
about, and to carry out what he put poses, by voting
him an annual salary of £2,500. A step of this
kind is true economy. The true cry for the mass of
helpless shareholders,—the only point to be kept, in
the first instance, before every half yearly meeting,
is, " Wanted, a Manager."—Builder.