The Birmingham age-herald., 1906-06-14
DIRECTORS WHO DO NOT DIRECT.
Pleasant Job Is That of the Dummy
 Director.

 Arthur Warren in Success Magazine.
 A great stir has been made in the
 world about dummy directors. One
 would think this new discovery,
 whereas the fact is that most directors are dummies and have ever been so. The majority of them are on their re- spectiye boards because they were wanted for other purposes than direct ing. The statutes had to be compiled with, custom had to be honored, names
 are useful, and votes are absolutely
 necessary. Most directors do not di-
 rect. They vote as they are told to,
 pass resolutions which are prepared
 and laid before Inem by the man, or
 men, in control, approve the papers
 they are asked to approve, disapprove those they are asked to reject, listen to reports which have been boiled down to the bone and bereft of detail, pocket their fees, adjourn, and, a few minutes later, attend other directors
 meetings for other companies, perhaps in the same street or even in the same office building.
 Many boards meet only once in three months. They have executive commit tees of their members which meet once a week. Let us suppose that board is composed of fourteen or fifteen
 members, or more, and that the execu- tive committee contains seven mem bers or less. Very rarely is there full board meeting; 1t is not often that a l majority is present. Usually the off | cial quorum has to be drummed up.
 1 Ills is true, also, of executive com
 mittee meetings. The directors have so many meetings to attend that they cannot be present at all of them. How, then, can they know much about the
 business that they are supposed to di
 rect? If any of their employees knew
 as little they could not hold their places for a week.
 l knew a persistent old gentleman
 who spent half of his life at this sort of thing. He played at directing as
 another man might play at golf He
 was on the boards of fifty-three com | panies, and some ten executive com mittees. He was reputed to attend a | thousand meetings a year. You can easily figure 1t up, for he was very dili | gent in attendance. He would fit iron meeting to meeting. remaining long enough at each to collect his fees. He | was a very well known man, very rich | his fees earned him at least $20,000 g ; year, and, as he lived very modestly | for so rich an old man, he could, and did, put all his dividends into invest ments. How much did he know about the affairs of the fifty-three companies | He knew when they would declare div l idends and what the rates would be ! nat Is always very profitable knowi edge when it comes to you in advance l He knew before each event, wher | stocks and bonds would be issued ant
 the details concerning them. If bor l rowing or lending was to be done ht | knew of it. It was his business to know these things. He was a professiona ] director But what his fifty-three com | panies were really doing, and how they were doing it, he knew only wha he was told in brief formal reports anC l in chats with the chairmen of thc boards. Of course, he relied on thei
 word. They relied on his vote. They put good things in his way; he pu l good things In theirs.