Note: This is a fictional story. Any resemblance to real life events or people, is mere coincidence.

Once upon a time, somewhere in Malaysia, there was a company whose CEO was accused of receiving a donation of over US$2 million from a rival company. These accusations were made by reputable financial newspapers both local and foreign which published a detailed account of their investigations.

In response, the company’s board of directors convened an emergency meeting and immediately ordered an investigation into the matter.

The CEO attempted to defend himself, saying, “I have not used any of this money for my own personal benefit. After all, what other people choose to pay me, in their own personal capacity is none of your business. This is my personal money in my own personal account.”

However, the board was not convinced.

“We cannot have our CEO’s integrity being compromised because they feel beholden to another company,” remarked a board member, “To make decisions in the best interest of our company, our CEO must be free of outside influences.”

And so the board of directors commissioned an investigative task force to look into this matter, which comprised of the CFO, the director of governance, and a senior partner from their auditing company.

The CEO was told not to interfere with the work of this task force as the investigation had to be transparent and independent so that they could show the many shareholders, that this company was being governed properly (the companies stocks had fallen rapidly since the scandal had broken as shareholders started selling stocks due to their lack of confidence).

“Please let the task force do their work freely”, the board instructed the CEO, “after all, if you are innocent as you have said, there is nothing to hide, and you have nothing to worry about.”

But alas, the CEO did not heed the board’s directive.

Instead, in the next seven days,

  • The CEO fired the director of governance, just before this director could submit his investigation report on the CEO. The CEO claimed that this director was sickly and taking too many days of MC. He was replaced with a new director (without board approval) who promptly released a statement to the press that the investigation was over and that the CEO was innocent of all charges
  • The CEO opened up investigations into staff of the CFO (finance department), accusing them of leaking classified information to the press, and had a few important staff transferred into the CEO’s department, as punishment for not halting the investigation into his US$2 million donations. He even had one foreign staffer fired and her work visa cancelled.
  • He threatened his audit company, saying that if they continued with the investigation, he would fire them as auditors and replace them with another company.
  • Perhaps most boldly, he fired his deputy CEO, and a few other vice -presidents, for openly questioning his own ethics and conduct. In fact any staff who spoke out against the CEO was fired on the grounds of unethical behavior. People loyal to the CEO were instantly promoted to positions of leadership, regardless of whether they were qualified for the positions.

Interestingly the CEO declined to sue the newspapers who published the expose for defamation. He talked about taking legal action but mysteriously chose not to take any further action.

Special board meeting called

The board was furious that the CEO had blatantly ignored their directives and clearly sabotaged their investigation into his secret financial dealings. So they called a special board meeting as well as an EGM of all shareholders with the agenda of forcing the CEO to be accountable for his actions and to ensure the ‘clean’ governance of this company. The meetings were scheduled to take place on Aug 29 and 30 in the company’s Grand Hall.

In response the CEO told the board of directors that to use the Grand Hall, they had to make a booking and get approval from the facilities manager, who in turn promptly told them that the Grand Hall was already pre-booked for a company dinner on the 31st and so the venue was not available!

“Anyway, the venue is not really suitable for the event you are planning”, remarked the facilities manager to the incredulous board members who retorted, “We are the board of directors who run this company. You are an employee of the company who is supposed to work for us! How can a company dinner take precedence over a gathering that can save this company from bankruptcy?

“What’s the point of celebrating the company’s anniversary if the whole company goes bankrupt?”

The board of directors were at their wit’s end. How did things come to this? How could a CEO act in such an arrogant, irresponsible and thuggish way without fearing the consequences of his actions? Had the CEO forgotten that he was answerable to the board?

Had the CEO forgotten that this was not his company to do as he wished with, but rather that he was supposed to be a steward of the company’s resources? Had the CEO forgotten who was the real boss of this company?

So what’s the moral of this fable?

Some CEOs have forgotten that they are indeed accountable and answerable to their board of directors. Similarly some political leaders have forgotten that they are accountable and answerable to their citizens, who are the board of a country. Perhaps some of them need reminding of who holds the real power. See you all at the EGM this weekend.