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The decision for Samuel Firestone
250766441 Joanne (jiayi Xu)
Samuel Firestone is a member of the board of directors of Lakeland Mining Corp. Because of a drastic tension between CEO—Peter Sevko, and chairman of the board-- Philip Scott., Firestone as a key member of the board needs to figure out who he wants to support. This decision is related to some problems which also need to be thought about. First, the decision is about whether to support chairman’s proposal (i.e. to exchange his resignation for a proper nominating committee). Second, he determines what actions should be done to alleviate the current conflict.
From examining the escalation of the conflict, the root cause of this issue is CEO did not have a clear understanding of his own role and responsibilities, and some board members do not realize the relationship between the board and CEO. CEO’s mixing up personal conflict with professional issues and the board members-Steve Smith and Tom McCoy’s very closed relationship with CEO. Therefore, Firestone should stand the side of the chairman. However, there still have been several problems need to be realized.
The first problem is that chairman’s resignation in exchange for the nominating committee. Firestone thought that it was not a wise strategy either for the board or for the long term interest of the shareholders for three reasons. First, the performance of Scott was good, even it was his first-rate chairman; it was not Scott’s fault for this situation-the conflict. Second, if Scott is resigned, it would put more pressure on the board in selecting a director as well as a qualified chairman. Moreover, Steven Smith, Tom McCoy and Frank Jones stand on the side of CEO because of their personal relationship. The following decisions in this board may be controlled by the CEO. As a public company, this information will affect the confidence of the stockholders. Based on the analysis, Firestone would not
250766441 Joanne (jiayi Xu)
Samuel Firestone is a member of the board of directors of Lakeland Mining Corp. Because of a drastic tension between CEO—Peter Sevko, and chairman of the board-- Philip Scott., Firestone as a key member of the board needs to figure out who he wants to support. This decision is related to some problems which also need to be thought about. First, the decision is about whether to support chairman’s proposal (i.e. to exchange his resignation for a proper nominating committee). Second, he determines what actions should be done to alleviate the current conflict.
From examining the escalation of the conflict, the root cause of this issue is CEO did not have a clear understanding of his own role and responsibilities, and some board members do not realize the relationship between the board and CEO. CEO’s mixing up personal conflict with professional issues and the board members-Steve Smith and Tom McCoy’s very closed relationship with CEO. Therefore, Firestone should stand the side of the chairman. However, there still have been several problems need to be realized.
The first problem is that chairman’s resignation in exchange for the nominating committee. Firestone thought that it was not a wise strategy either for the board or for the long term interest of the shareholders for three reasons. First, the performance of Scott was good, even it was his first-rate chairman; it was not Scott’s fault for this situation-the conflict. Second, if Scott is resigned, it would put more pressure on the board in selecting a director as well as a qualified chairman. Moreover, Steven Smith, Tom McCoy and Frank Jones stand on the side of CEO because of their personal relationship. The following decisions in this board may be controlled by the CEO. As a public company, this information will affect the confidence of the stockholders. Based on the analysis, Firestone would not