In my high-flying banking days, it was normal for me to interact with multi-millionaire business owners and their CFOs fairly frequently.
During the countless beauty parades for investment banking mandates during my career, wining and dining the CEO or CFO was par for the course. And if the deal did well, you were almost guaranteed to get a seat at the table again for the client’s next trade.
Recently though, a friend of mine told me something unusual. When he was schmoozing quite a new client, the CEO and CFO were joined by someone else who they said was an independent director at their firm.
Now most of us would know that an independent director is usually, well, independent from the company, with no role in the day-to-day operations of the business.
In most cases, they have little inside knowledge of what’s happening at the firm, and are less informed about the going-ons than the management. Rather, they are part of the business because listed companies are required to have independent directors as a sign of good corporate governance.
This chap seemed similar, but was somehow different. He was apparently a new independent director at the firm and wanted to understand its fundraising potential and credentials. It was his first time holding such a role, and he wanted to do it justice (although there usually isn’t much for an independent director to actually do).
He apparently asked some insightful questions, but largely stayed quiet and on the sidelines and let his boss get on with it.
But after a few drinks, his actual job became a lot clearer. You see, while he claimed to be an independent director, his real job was to make sure the client toed all the right regulatory lines, kept his head down, didn’t get into any unwanted trouble and more importantly, stayed safe.
So, what does an 'independent director' of a company really do? In his case, he was just passing off as a director, while doubling as a bodyguard for his boss. What a CV it must be.