My first exposure to boardroom politics

A boardroom meeting. FILE PHOTO | NMG 

By MAN ABOUT TOWN
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There has been a flurry of visitors from the head office who are coming to “review our plans and offer strategic advice.” I have not been pleased about these visitors because all of them have been
giving conflicting views on the way forward. On day one, we discussed our pricing model and how we intend to price our goods going forward. My boss and I had done quite some comprehensive analysis of the macro indicators and concluded that we needed to “ hold price to maintain our market position.”

When my boss presented this proposal to our visitors, their reaction shocked me. They came back and said “we cannot hold price, we must push prices up to meet the company’s agenda.” My boss tried to counter saying, “we have reviewed our numbers and our consumer stretch, and we think that might hurt us and our consumers will move to competition.”

One of the guys in the meeting proceeded to give a long lecture about how numbers are set by the head office each year and so “the end markets must deliver.” I could see that my boss was getting irritated and he kept looking at the CEO hoping for some back up. It took about 10 minutes of debate for the CEO to finally chime in and said, “I agree with my team, we need to review our pricing model. Price increases are not sustainable.” This seemed to stop the visitors in their track as they suddenly changed tact and said, “well you know that this is not aligned to company position so you will have to get the top bosses to review and approve it.” The CEO looked quite cocky about his position and said, “well I will do that.”

Once this stalemate was sorted, the rest of the meeting went quite well. The head office guys did not raise any issue other agendas discussed- they said that our plans were good. On their last night out, the CEO and my boss took them out for dinner and drinks. The next day I had to ask my boss, “what was that all about? The fight about pricing was too much.” He laughed and said, “ let me educate you on how things work in multinationals.”

He went ahead to unleash a flip chart to simplify. He summarised it by saying, “basically when the boss commits to the Board there is no turning back.”

I had to ask, “ So, how will our CEO get out of this?” He laughed and said, “ what these head office newbies do not know is that our CEO here and the global CEO go way back. They attended the same university in the US.” I was shocked by this and said, “ so, what has that go to do with anything?”

He laughed and said, “so basically, our CEO talks to the global CEO like every day. He had already gotten some sort of approval to our decision not to price up.” He continued, “we had a pre-alignment meeting to discuss how we would manage the process.” And just like that, it all made sense to me- the whole discussion had been stage managed.

He looked at me and said, “we decided not to let you in on the secret since you are too new- no need to get you involved in these politics.” In some way, I was glad I was not in on the secrets of this plan. I had to ask, “what happens next?” He said, “ you update your strategy document with the prices we discussed at the meeting and we start the approval process.”