Business Brief: Execs Gone Wild

Posted on March 27, 2007 by Roger Martin

On first glance, the prosecution’s strategy—blowing up private e-mails that demonstrate Conrad Black at his most arrogant—seems effective. What jury would sympathize with a man who’s capable of such comments as “We don’t want a large institutional shareholder like Tweedy, Browne flapping about in such an agitated and indiscreet state” and “I will take on the task of hosing down shareholders in need of it as a matter of some priority.” But the flaw in taking the trial in that direction is that it plays right into the defence’s best line of argumentation—i.e., that the context was to blame, not the man.

While such e-mails may sound outrageous to the prosecutors, it wouldn’t be very hard for the defence to find lots of similar statements from executives at other companies who are not on trial for anything. If the prosecution is trying to prove that a man who treats shareholders with such profound disrespect is also clearly capable of corollary criminal acts, they are going to have to explain why hundreds of other American executives who have treated shareholders with the same contempt over the past decade are not accused of any misdeeds. While the recent wave of moral outrage has driven the audacity underground, it continues to be a feature of the current context in which executive talent is playing an aggressive value extraction game. I can’t see how this line of attack will do anything but expose a flank of the prosecution’s case—if the defence sees the exposure, that is.

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