Mister Meanor gives sound advice on personal versus company loyalty and when it pays not to reveal all that you know.
Dear Mister Meanor
I have just recently been promoted to the board of directors of my company.
At a directors' away day I learned that a division of the business headed up by a long-standing friend of mine is likely to be closed down. Only the directors will know of this decision until a public announcement is made.
Unfortunately my friend is about to move house and take on an enormous mortgage. I fear he will be financially ruined as at his age he is unlikely to find a job with a comparable salary. What should I do?
In a quandary, the Quantocks
Dear In a Quandary
What an unenviable position to be in, especially as, in this case, there is unlikely to be a satisfactory solution. What you should do, in the first instance, is go back to the board and explain the situation fully. If they are sympathetic and allow you to tell your pal about his clouded event horizon, then all well and good.
If not, then you must keep your counsel. You are now a director and the key to the executive washroom carries with it certain responsibilities.
Moreover, there is no point in trying to drop hints to your friend. The chances are that he will twig, and when he does he may well tell another 'close friend'. Once the cat is out of the bag, it is only a matter of time before it ends up right back where it started, on the boardroom table.
You can be sure it won't take your fellow directors long to identify the snitch in their midst.
Of course, once the closure is made public and your friend realises that you knew all along, your friendship will be under severe strain. Sorry to tell you what you may not want to read, but that's too bad; the mantle of high office is often uncomfortable to its wearer. But you will have to get used to making decisions like this.
Dear Mr Meanor
I am part of a management team which intends to complete a buy-out of a division of our company in six months' time for around £2 million. I happen to know that, come the end of the year - post buy-out, that is - we already have an order which will generate roughly this sum, effectively giving us the business for nothing. Should I tell the parent company?
Unsettled of Settle
Legally, professionally and ethically, you ought to tell them. However, British business has a long and noble tradition of creating millionaires by selling them undervalued businesses, a trend evident over recent years with the selling of nearly all of the Government's 'family silver'. Examples abound in the private sector too.
A number of major plcs have seen divisions they sold through MBOs/ MBIs turn into high achievers.
Besides which, any company that is considering such a step should have the division in question firmly under the microscope in search of exactly this sort of thing. So in spite of your misgivings, it is perhaps best to keep mum. And whatever you do, don't voice any of these qualms to your venture capital backers, or they'll be out of the door before you can say 'honesty pays'.
Yours mala fide