Boardroom coup

A boardroom coup is a sudden and often unexpected takeover or transfer of power of an organisation or company. The coup is usually performed by an individual or a small group usually from within the corporation in order to seize power. A Boardroom coup draws upon the ideas of a coup d'état in the same way that a corrupt, dysfunctional or unpopular group is pushed out of power.

Examples of Boardroom coups

Paramount and DuMont

In 1940 the television company Paramount, in an attempt to strengthen their business, took control of fellow rivals DuMont after failed attempts to work with other established companies in their field, including CBS, RCA and AT&T. Preceding these failures Paramount decided to obtain stocks in another television company, DuMont. After their purchase Allen DuMont, the owner of DuMont television, began to see his powers within the company flagging as Paramount now owned a large proportion of his company. Paramount with its newfound power proceeded to appoint its own directors amongst DuMont’s. The company established their coup by giving crucial financial positions to those they had hired, stopping DuMont from having any financial input into the company and effectively becoming their owners.

Apple

In 1985 Steve Jobs was stripped of his title as Apple’s chief visionary after a boardroom meeting in which Apple’s representatives sided with then CEO Sculley. Despite the success of a new advertising campaign release in 1984 there was significant backlog of unsold stock, which was worth millions in revenue. Demand for the products dropped significantly between the years 1984 and 1985, leading to rising tensions between the CEO and Jobs. In an attempt to raise confidence in the company and his own ability, he launched a brand new computer named the Turbo Mac. His new piece of technology featured a multitude of different features from previous Mac models including a faster operating system, customised internal parts exclusively for the Turbo and the ability to store data from within. The project however was unsuccessful due to problems in the physical technology of the system. After this failure and no sign of improvement in profits at the corporation, a boardroom meeting was set up to decide Apple's and, unknowingly to him, Jobs’ future as well. No concrete solutions were made and a few months later, in 1985, Jobs and Sculley had a showdown. Sculley ousted his power, diminished his former title and forced Jobs to leave the company.

Apple II

After Jobs' removal, Apple had been faltering in its market position once again and was being overtaken by the other technological powerhouses. Scully, in an attempt to save the company, started to begin the process of finding a buyer. A multitude of companies were offered the corporation, but none accepted. In 1996 Gil Amelio took over the helm at Apple and with the bad publicity the corporation was receiving Amelio struggled in reinstating any hope for the future. He was fighting a losing battle for Apple and was considered by many to be worsening its struggle for survival. In June 1997 a meeting was set up with senior board members of Apple. The executives intended to discuss, exactly as it was nearly 10 years earlier, the state of the company and of Amelio. However, this time a clear decision was reached and a couple of weeks later Woolard, a member of the Board of Directors, delivered the news to Amelio by telephone that he would no longer be the head of Apple. Jobs, who had been busy after his resignation with his new company NeXT Inc., was reinstated as interim CEO after Apple bought his business in 1996 and was formally restored to the board in July 1997, just days after Amelio was ousted.

General Motors

In 1990 Robert Stempel was appointed to CEO of General Motors, a company that he had worked for since 1962. He had started in their Oldsmobile Division and gradually climbed the various ranks of the company until he was given the position. An economic recession hit the globe in the late 1980s and into the early 1990s which significantly impacted on GM and the automotive industry in general. The pressure to keep the company profitable came upon Stempel. He, alongside the board of directors, looked for ways to cut costs in every division. Particularly, they looked to restructure the make-up of the company so that it would bear the brunt of the recession less forcefully than his rivals. However, in 1992 the board took action against Stempel. With a vote the managing directors, as well as external directors, fired him. They believed that he was not only responsible for level of GM’s losses, but they also accused him of doing little to return the company to the success they expected.

Rangers Football Club

In May 2013 an attempt was made to threaten the position of the club’s chairman Malcolm Murray. The club had previously gone into liquidation a year before but after an agreement was reached and the club was re-purchased, their prospects began to improve and confidence amongst shareholders was raised. Despite a prosperous looking future, in May a group of these shareholders decided that they wanted Murray removed as well as other senior members of the board. Fans and investors alike were uncertain of the exact financial state of the club because little information had been released since their liquidation. Because of this, tensions rose between the board and shareholders, despite directors trying to assure investors that the club was financially secure. The shareholders, who owned 6.1% of the business then successfully managed to oust Murray of his position and employ Walter Smith - a previous manager of the club whom was appointed in his place.

Attempt of a Boardroom coup

Blackberry

In 2012 an attempt was made by Robin Chan to completely overhaul Blackberry in an attempt to save them. Chan was not an employee of Blackberry, instead a technological entrepreneur who set up his own business, the XPD Media Inc group. After Blackberry’s share prices plummeted to $16 in 2012 Chan began to plan a takeover over the company with a team of specialists in finance and technology. His aim was to save the fledging company from having to be sold out or going bankrupt. He created a slideshow, which he named Project BBX to present to the board. Within the slides there were details of Blackberry’s current losses in a number of graphs and how he envisaged, with his team, to turn the company around. Some of the changes included completely overhauling Blackberry’s operating system and ensuring the phone’s security system was the best available to buy. In the end the board’s opposition to major changes coupled with his lack of funding due to the size of his project meant Chan was never able to succeed in Project BBX and his boardroom coup failed.

See also

• Coup d'état
• Takeover
• Buyout