Editor’s Note: This blog is an excerpt of a larger article that originally appeared in the Milwaukee Journal Sentinel and is being republished with permission. You can read the full article here.


Now that Briggs & Stratton has changed hands, it’s time to tackle the elephant in the room: its board of directors.

The small engine maker’s nine directors in June awarded executives more than $5 million of retention bonuses rather than make a $6.7 million interest payment on debt they incurred. That forced the more than 100-year-old company into bankruptcy and a sale earlier this month to New York private equity firm KPS Capital Partners.

Was the Briggs board a mutual protection society for its top executives and, frankly, its members? Or did the board, through no fault of its own, encounter impossible obstacles and have no choice but bankruptcy?

The mutual protection society theory seems to carry the most weight.

Despite a 20-year trend toward separating the chairman and CEO jobs, Briggs’ board decided Todd Teske should have both.

The board justified Teske’s dual role by saying his tenure at Briggs since 1996 made him most familiar with the company and best-positioned to identify what the board should review and discuss. According to one securities filing: Centralizing power with Teske prevented “ambiguity about accountability and the possibility that two leaders might communicate different messages.”

Umm, maybe there was some confusion about accountability. The board has a fiduciary duty to shareholders to ask questions of management, evaluate the risks of the strategies and plans management presents for approval, and assess the performance of management against those plans.

To read the rest of the commentary, visit JSOnline.com.