The Globe and Mail's Jacquie McNish thinks Conrad Black would have been better off to kiss and make up with his angry shareholders five years ago. True, but then he wouldn't be Conrad.
Conrad Black has blamed many enemies for the prosecution that led to yesterday's guilty verdicts. He condemns the U.S. justice system for a "vicious and relentless" inquisition. He fingered his first accuser, former U.S. securities regulator Richard Breeden, as a corporate-governance "zealot." And he has cast his rebellious shareholders as "ingrates" and "terrorists."
The one person Lord Black seems genetically incapable of blaming is himself. For the sad truth is, he was his own worst enemy. Had he simply folded his losing hand when shareholders of Hollinger International Inc. first called him a "thief" in 2002, Lord Black would probably not be facing the humiliation of prison.
"This didn't have to happen. It is so sad, and no one takes any pleasure in this. He had multiple opportunities along the way to avoid this," said Gene Fox, a managing director of Cardinal Capital Management in Greenwich, Conn., and a leading shareholder critic of the lucrative side payments to Lord Black and his senior team that were at the heart of the Chicago fraud case.
Mr. Breeden, who reached a boardroom settlement with Lord Black in 2003, only to see him try to pull the wool over the eyes of his directors, said the press baron's defiance all but goaded the justice system to pursue him.
"If he had just honoured the agreement he signed with his own board, this might have ended very differently," he said. ...
For decades, an unquestioning board and the security of multiple voting shares had protected his corporate fief from shareholder attacks, particularly with historically acquiescent Canadian and British investors. But in the early 2000s, those defences were no match for furious U.S. shareholder activists who were declaring war on profligate executives after the collapses of WorldCom and Enron. Backing those rebels were crusading U.S. prosecutors who were targeting errant businessmen as public enemies.
At a time when compromise or conciliation might have allowed Lord Black to negotiate a retreat with dignity from his Chicago-based Hollinger International, he instead pursued a fatal strategy to fight and deceive his opponents in a series of battles that culminated in yesterday's guilty verdict.
After angry shareholders confronted Lord Black at a Hollinger International annual meeting in New York in 2002, he promised some of his biggest shareholders a new era of restraint and transparency. Behind the scenes, however, Lord Black raged in private e-mails about his critics. "Don't yield an inch," he warned one subordinate in a 2002 e-mail. In other e-mails, he dismissed investors as "self-righteous" critics who suffered from "Enronitis" and the "hysteria school of corporate governance."
When one Hollinger International executive pushed Lord Black to restrain the flow of company money to his pockets, the press baron retorted in an 2002 e-mail: "We should not allow the agitations of shareholders ... to force us into a hair shirt, the corporate equivalent of sackcloth and ashes."
As a result, a Hollinger special committee uncovered US$32 million in unauthorized payments in 2003. By November of that year, Black was out ... and so on and so forth.
Here's the CTV.ca timeline of Black's career.