What’s really going on in the Market Basket Board room? Political pressure, economic pressure and community pressure are mounting on the Board of Directors.
Jay Lorsch is a professor of human relations at Harvard Business School. He says pressure’s escalating every day.
“They’ve got to be embarrassed. It’s no fun being on a board which is in the middle of a controversy like this. And the more this thing gets stuck the more they look stubborn and silly,” he says. "When you talk about boards of directors, there’s a whole complicated set of responsibilities. At one level it’s to the shareholders but they also do have a responsibility to the corporation itself, legally, and also to other stakeholders. “
Still, Lorsch, along with the thousands of Market Basket employees and customers, wonders what’s taking so long.
“I’m a little bit surprised that there hasn’t been some leadership emerging in the boardroom that says hey, you guys get together, this is ridiculous. If you’re not there you can’t quite understand what’s holding the whole thing up.”
But is the board really responding to the intervention from Massachusetts Governor Deval Patrick and New Hampshire Governor Maggie Hassan? Did board members listen on Sunday night, or roll their eyes?
“I’m sure that’s the intention of the governor is to get these people to come to some reasonable resolution which doesn’t destroy the entity. Because from their point of view as politicians the most important things are employment and providing retail services to all these communities where this chain has been operating for a long time. Whether that puts pressure on the board members, it has to at some level.”
Lorsch points out how unusual it is to see a governor offer to serve as a mediator in a family business. That, in part, is what’s pulling in even more national attention. Neil Stern is a supermarket analyst with the Chicago firm McMillanDoolittle. He believes the board was probably caught by surprise.
“They obviously massively miscalculated the impact that firing Arthur T would have. I think they went from trying to weather the storm during the transition to worrying about the survival of the business.”
Stern says government intervention may not even matter. The bottom line is that the company is bleeding cash.
“This business needs to survive long enough to go through whatever transaction it’s going to have.”
That may mean customers will have to start shopping. The big question? Will the family sell to Arthur T., another grocery chain or a private-equity firm? In any case, Stern says it probably won’t take long to restock shelves and get stores back up and running.
“First they have to get the staff back working which I assume could happen relatively fast. And then the suppliers need to start resupplying. It’s a bit more of an issue on fresh foods, which would not be on hand. I suspect within a week you could see business conditions more or less back to normal.”
Normal. It’s hard to picture in those eerily empty aisles.
