Boardrooms notoriously, if unsuspectingly for the naive, can become Cauldrons Of Emotion. Power, betrayal, plotting and deceit can become the order of the day. But it’s probably been a while since they were resolved by pistols at dawn…
In the late 18thC there was a long-running saga involving Board conflict between the East India Company’s perhaps best-ever Governor General in India, Warren Hastings, and a State appointee to a newly-formed “Board of Control”, Sir Philip Francis. This was a classic example where Board frictions superficially arise from personality differences. However as in many such cases there are underlying organisational issues of priority, direction and control which raise these personality differences to a whole new level. In this case the two Directors were literally prepared to fight to the death over the future of the Company.
Hastings, against massive government pressure, was trying to keep the company primarily a trading company. After the de facto World War Zero (the Seven Years War was fought on five continents) and against a backdrop of a crumbling Moghul Empire, the East India Company had got dragged into territorial acquisition. Hastings wanted to draw the line, take no more territory, and focus once again on trading as the East India Company had done solely for six generations, quite unlike its main European rival the VOC (the Dutch East India Company) who conformed to the earlier Spanish model that a bit of massacring never goes amiss when it comes to getting your way.
However the British State had other ideas, especially after the loss of the thirteen colonies in North America. Francis was the State’s representative on the Board in Calcutta on which the State had given itself a majority with Francis and two other colleagues. This aptly-named Board of Control over-rode the EIC’s governance structure. Chartered Companies had a two-tier Board (another tale for another day is that this model, today understood to be a “Continental” model was imported to Europe by copying the EIC’s structure). A Court of Proprietors was the uppermost structure – imagine an AGM with extensive powers to control and manage the company. Below it was a Court of Committees which is similar to the modern Executive Committee. In the 17thC a Committee was not a way of whiling away the hours without having to do any work but rather was a person committed to the owners to managing the company’s day-to-day affairs. It is a revealing linguistic point that what the 17thC called a Committee we would call a Director. The very word Director is a huge shift from someone committed to the owners, to a structure where company governance has been hijacked by the management. Unless you are a MegaCo with a huge shareholding, shareholders by now have minimal authority over their company at AGMs which are the vestigial remains of the Court of Proprietors.
Back to the Calcutta Board of Control. Whilst some things change others stay the same and there had been a period in which not only was Hastings thwarted often y the State’s representatives but the two antagonists had engaged in much mutual reputational destruction.
By 1780 Hastings could take no more criticism and backstabbing and wrote a letter attacking his main antagonist Sir Philip Francis who, honour slighted, promptly issued a challenge to a duel. In passing during one of the company’s more important wars.. This took place in a Calcutta Avenue which still exists today (Duel Avenue) at 05:30 in the morning. There was much faffing about over location, rules and what the time was (?!). Francis had never discharged a pistol and Hastings only once or twice. They turned, walked fourteen paces, fired and Francis fell, shot in the chest and crying out “I am a dead man.”
However Francis was not and was fixed up and sent off back to England where he schemed and plotted relentlessly until, eight years later, in 1788 he finally persuaded parliamentarian Edmund Burke to impeach Hastings (on grounds unrelated to the duel). “Corporate accountability” is a big thing these days and politicians love nothing better than throwing coconuts and being wise after the event – when now as then they were the ones creating the governance structures which had failed in the first place. The British were perhaps the first off the mark in this regard and those main board directors in front of a select committee today might well hope that unlike Hastings their time in parliament does not amount to a show trial that lasts for seven years, nor one that costs the modern equivalent of a astonishing late-18thC £70,000.
I’m sure (cough) that this had nothing to do with William Burke being a relative of both Francis and Edmund Burke (who he called cousin but was actually more distantly related). Nor did it have anything to do with Edmund Burke having lost his lifetime savings in the “Bengal Bubble”, a complex tale for another day, the net effect of which was that the EIC shareprice halved between 1769 and 1784. Nor was it anything to do, I am sure (ahem), with Edmund Burke being fed information by the Rajah of Tangore who was indebted to the East India Company and its employees. Nor was it to do in the slightest with the State’s desire to crush the East India Company management and re-purpose the East India Company going forwards as a sock-puppet for the State’s new ambition to gain a new empire in the east having lost one in the west.
Eventually Hastings was acquitted of all charges. He said that the trial was a worse punishment than pleading guilty in the first place would have been and had cost him a small fortune.
“No other Governor General or Viceroy would last anything like as long as Hastings and no other would approach his profound understanding of India or his affection for its peoples… even today his reputation rests on the two seemingly irreconcilable assertions that he was both the architect of British India and the one ruler of British India to whom the creation of such an entity was anathema.”
En passant as historical negationism (“telling it like it wasn’t”) is all the rage, like all the old Company men, he was strongly Indophilic:
“Fluent in local languages he was a great philanthropist sponsoring the first English translation of the Hindu Bhagavad Gita, … ordering the construction of a Buddhist temple on the banks of the Hugli.”
This was all part of the UK State’s de facto takeover. Hastings was not only the greatest of the EIC’s Governor Generals but also the last appointed from within the company. Before long Parliament sent Governor Generals who did their bidding and conquered the subcontinent. Although Francis lost the duel his backers won the day. Formally the Government did not take over the East India Company until 1874 – which leads to them being “blamed” to this day for the conquest of India – something that even Marx spotted was quite false. In practice via this Board of Control the State had taken over the command of the East India Company in India in 1784 and used them as an imperial agency.
What are the morals of the story? It is yet another example that history is written by the victor. The EIC is generally deemed in this age of wokery to have been an out of control private company plundering and imperial in nature. Whereas the reality was quite the opposite, the Courts (the Boards) were fiercely and bitterly trying to hold back State imposed imperialism. The politicians in the late 1700s not only took over control of the EIC in India but reputationally, to this day, stitched it up like a kipper.
Another is that it is generally the “powers behind the throne” that benefit. Francis was bitterly disappointed by Hastings acquittal and was passed over for the position of Governor General that he had coveted.
As the outcome of your Boardroom battle is unlikely to change the course of history, what is a more practical moral of the story for you 21stC Board folks? A non-executive Chairman (Hastings, as Governor, was in our terms the Executive Chairman which was the model in the past) is important in refereeing Board conflict between two people playing two different roles and your Chairman should hopefully prevent duels.
But the real moral of the story here, the real practical advice, is that if your Chairman does not manage to prevent a duel, take twelve paces not fourteen if you are using 18thC pistols. When it comes to a power struggle winging your opponent just outrages them rather than finishes them off.
In extremis in the many tales of Board Room rumbles I have heard and many I have not there is always someone who takes just twelve paces – it is either you or your opponent.