1.1 Vote to accept the offer of Graham Industries and assure a shortterm profit for the shareholders and executives. They are your first responsibility. It seemed like a great deal for Kevin Haley, the retired managing partner of a small accounting firm, when he took the job. To sit on the board of Keldine Technologies, all he had to do was listen to some general talk about the company at bi-monthly meetings, vote on operations issues and collect a nice fee. He did not worry about his lack of expertise in the company’s business of manufacturing transistors, because ‘nothing ever changed at Keldine’.

That was two years ago. Now Keldine Technologies, with 250 employees and 10 years in business, is faced with a buyout offer from Graham Industries. Keldine’s chairman of the board, Greg Bingham, calls the deal a ‘no-brainer’. Graham Industries’ offer of A$6 a share is high – a great deal for shareholders. The problem for Haley is that he knows Graham Industries is close to bankruptcy, and that it is probably only buying Keldine to leverage some of its debt and hold off creditors. The odds are that both companies will be wiped out within a year if the sale goes through. As news of a buyout offer spreads, Keldine shares have changed hands rapidly, and speculators in the shareholder ranks are pressuring for a sale. Bingham asserts: ‘Our mission is to create as much value for shareholders as possible.’

He also assures the board that the executives are protected by contingency compensation packages in the event of a ‘downturn for Keldine’. But Haley is torn. The deal is a short-term money-maker but almost a guaranteed disaster for the company’s future and the majority of its employees. Haley’s commitment to shareholders seems compromised by the presence of speculators in their ranks. He questions whether the interests of loyal, long-time employees are not a higher priority than those of speculators.