The “What Not to Do” Poster Child for Corporate Disclosures
The “What Not to Do” Poster Child for Corporate Disclosures
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December 16th, 2024
By Frank Glassner, CEO Veritas Executive Compensation Consultants
In the world of corporate governance, where the line between right and wrong should be as clear as day, James Craigie has become the poster child for the "what not to do" category. Formerly at the helm of Church & Dwight—yes, the folks bringing you Arm & Hammer and OxiClean—Craigie’s tale is one of boardroom antics worthy of a daytime soap opera.
Let’s dissect the debacle: Craigie, masquerading as an independent director, forgot to mention his rather cozy relationship with a high-ranking executive—a friendship that featured not just a few casual get-togethers but lavish international vacations topping $100,000. Imagine, if you will, a board meeting swapped out for a yacht meeting. Doesn't quite scream "independent," does it?
But Craigie didn’t stop at just hiding his swanky getaways; he was also neck-deep in the CEO succession process, championing his buddy without disclosing that their friendship extended beyond the boardroom into the areas of luxury and secrecy. He essentially turned the CEO succession into a personal matchmaking session, all the while keeping his fellow board members in the dark.
The SEC wasn’t amused. They dished out a $175,000 fine and benched Craigie for five years from playing director or officer in any public company game. This round of penalties wasn’t just a slap on the wrist; it was a clear message: shareholders deserve directors who can make decisions without their judgment being clouded by undisclosed friendships and luxury jaunts.
Craigie's misadventure serves as a glaring signal to all corporate boards that the "general independence test" isn’t just bureaucratic red tape—it’s a critical safeguard against the kind of drama that can destabilize corporations and erode shareholder trust. Back in 2010, the New York Stock Exchange was already onto such issues, calling out questionable real estate deals between directors and CEOs.
So what’s the moral of this story? Boards, it’s time to sharpen those pencils and get serious about those D&O questionnaires. It’s not enough to tick boxes; we need to unearth any skeletons that could rattle shareholder confidence. After all, no one wants their boardroom decisions to be swayed by who’s sharing cocktails on whose yacht.
As for the rest of us watching from the sidelines, let’s remember that in the high stakes world of corporate governance, transparency isn’t just a nice-to-have—it’s the whole game. Craigie’s downfall is a stark reminder that when it comes to director independence, there’s no room for secrecy or buddy-buddy backroom deals.
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