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Chapter 5. Caffeine Badly Needed: Sleepy... > Red Flag 2: When the Board Rarely Me...

Red Flag 2: When the Board Rarely Meets

TMP Worldwide, parent of online jobs web site Monster.com, held just one board meeting in 2001 and acted by unanimous written consent on 11 occasions, according to a filing with the SEC. If a board only feels the need to meet once in a year when its earnings are starting to fade, that raises questions about whether the directors have any real involvement in the company’s affairs. In the year to February 2003, this company’s share price has lost about two-thirds of its value, so it wasn’t as if it was delivering the goods for shareholders. Investors should ask where the checks and balances are. Most boards meet at least six times a year. TMP’s audit committee met four times in 2001, which is about average, but its compensation committee met only once. TMP’s Chairman, CEO, and founder Andrew McKelvey effectively controlled the company through Class B stock that has super-voting power and through his 18.8 percent of the ordinary shares as of March 31, 2002.


  

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