Friday, August 29, 2008

Napster tries to block shareholders from board

The long, slow, public death of Napster enters a new wave of spasms, as "dissident shareholders" attempt to get voted onto the company's board in the face of stiff opposition from the current board. Why, say the current stewards of Napster, they don't even know about the business:

Their SEC filings describe work experiences—musician, nursing home executive, ice cream franchisee, middle management banking executive and other positions—that are irrelevant to a company like Napster competing in the highly sophisticated digital music industry.

If I was catty, I might point to Napster's flailing swoosh on the downward spiral and ask how all the current board's glitzy experience is actually helping them in the highly sophisticated digital music industry.

But it's worse than that, wail the board: the would-be members haven't even been on a board before:
The dissident group has provided no evidence showing that any of its members have ever served on the board of a public company, meaning they would require on-the-job training.

Goodness - can you imagine? Never mind that they might have some good ideas, or plans about how to salvage the mess - you'd have to teach them how to sit at a big table, and who knows if any of them have even seen a flipchart before? You know, the important Napster Board will be trying to do important business things, and these guys will be sitting there needing to have the hands-free telephone explained to them.

If 'never having been on a board before' disqualifies you from being on a board, what are we going to do when all the current board members of companies die off?
While we appreciate that the dissidents are music enthusiasts and subscribe to Napster’s service, such interests hardly qualify any of them to serve on your Board.

Yes: the Napster board think that being enthusiastic about the company and the business it is in doesn't really qualify you for having anything to add to the way the company is run. That's a tacit admission that anyone who really understands the highly sophisticated digital music industry has long since abandoned Napster as a bad deal - so any current customers clearly must be a bit klutzy. But, hey, the board have put it in a nice way.

The real beef, of course, is that the dissidents want Napster sold, and Napster sold quick; the current board know it has got to be sold, but want a more cautious approach - in other words, one which doesn't involve their arses being kicked out of the door.

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