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Crashing Boards

Investors consistently ask why directors at Enron, Tyco, Adelphi and a host of other scandal  plagued corporations did not take steps to prevent the carnage wrought by their megalomaniac CEOs. For the answer to this question, we must look at the hit film Wedding Crashers. In Wedding Crashers, a pair of lovable scoundrels (Owen Wilson, …

Investors consistently ask why directors at Enron, Tyco, Adelphi and a host of other scandal  plagued corporations did not take steps to prevent the carnage wrought by their megalomaniac CEOs. For the answer to this question, we must look at the hit film Wedding Crashers.

In Wedding Crashers, a pair of lovable scoundrels (Owen Wilson, Vince Vaughn) persistently crash weddings they have not been invited to, doing so partly to freeload, partly to meet nubile young women. According to the Wall Street Journal, the movie has been such a hit that it has inspired scores of copycat incidents around the country, with wedding crashers painstakingly scouring the society pages seeking nuptial celebrations that look like they might be fun to infiltrate.

The situation has become so serious that wedding parties now routinely hire guards to inspect guests’ credentials and make sure no pranksters slip through. Usually, the wedding crashers are merely asked to leave or denied entrance. But if the situation persists, we will surely be hearing about arrests, litigation and even violence.

What investors do not realize, indeed, what many corporate boards are laboring night and day to keep under wraps is that an epidemic of board crashing is also sweeping across the country. Some board crashers are little more than industrial spies who pretend to be directors to gather valuable intelligence for the firms that employ them. But most of the board crashers are doing it just for laughs. And up until now, most of them seem to be getting away with it.

“Provided they don’t wear outrageous costumes or show up bombed out of their minds, it’s really hard to tell a fake board member from a real one,” says a director at a San Jose software firm. “We had two guys in here last year who kept begging us to reposition ourselves and get into the online snowboarding business. I was sure they were board crashers, but I just didn’t have the nerve to call them on it.”                              

One reason board crashers can operate with such impunity is because many boards are so large and change membership so often that the directors don’t really get to know one another very well.

“There was a gal at one of our meetings last year who couldn’t have been more than 25,” reports a banking industry executive who serves on eight boards. “There was something about her that just didn’t feel right- the way she kept saying €˜dude’ and referring to The Blair Witch Project. Not until I got back to the hotel did I realize that she was a phony-and filched my BlackBerry.”

A basic sense of politeness, ingrained civility and even a lingering touch of noblesse oblige often discourage authentic directors from confronting unfamiliar faces who might be board crashers. And when a confrontation does occur, and the suspected interloper actually is a legitimate member of the board, the results can be humiliating.

“There was one feller down at the far end of the table who kept rattling on and on about maximizing shareholder value, something we never, ever did at meetings,” recalls an octogenarian director who has since retired. “Well, the way he carried himself just didn’t sit right with me, and finally I got right in his face and asked who the hell he was. Damned if it wasn’t Donald Trump himself. Guess my eyesight isn’t what it used to be.” In the long run, do board crashers cause any real damage? “Mostly, they’re just pranksters looking for a few laughs,” reports an oil industry executive who serves on five boards. “So usually we’ll indulge them. It’s only when they try to persuade the board to hire a private army to invade Nigeria, or sign all our North Sea oil rights over to Greenpeace that we have to call security.”

And what do the board crashers have to say for themselves? “I’ve crashed weddings, funerals, high school reunions and the rules committee at the Académie française,” reports one 30-something board crasher. “But board crashing is the most fun for one reason and one reason only: The eats are out of this world.”

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About Joe Queenan

Joe Queenan is a regular contributor on business issues, corporate culture, and financial follies to Barron's and The Wall Street Journal.