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Blind Spots, Biases and Other Pathologies in the Boardroom by Kenneth A. Merchant

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Chapter 8

Power, Coalition Formation, and Politicking

In the early 1990s, UNI Storebrand, a large Norwegian insurance company, went bankrupt because of developments stemming from a failed hostile takeover bid for Skandia, a large Swedish insurance company. The takeover bid resulted in losses of billions of dollars for UNI Storebrand’s shareholders, creditors, and customers. The autopsy of the event revealed that UNI Storebrand’s CEO used multiple sources of power to convince the company’s board of directors to approve the attempt. His power stemmed from his reputation and charisma; his position in some important power elites, such as the Norwegian “presidents club”; his participation in some interlocking directorates that helped him secure the ...

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