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APPLYING "A GAME OF THRONES" TO THE BUSINESS WORLD

"A Game of Thrones" is the first book in the literary series "A Song of Ice and Fire" by George R.R. Martin. It is most recently an HBO series. It provides a compelling example of approaches to medieval rule and relationships. These medieval approaches to rule and relationships are similar to some current business and legal approaches to supervision and relationships in business enterprises.

The book is set in a fictitious medieval world. Two of the royal families in the story are the Lannisters and the Starks. The two royal families have very different management styles.

The Lannisters see only their own interests as important and they see themselves as responsible only to themselves. The Lannisters believe that they are best off when all others fear them and literally need them to survive. The Lannisters expect and receive loyalty out of fear and secondarily out of expectation of payment. The Lannisters assassinate and execute both employees and ruling associates (advisors and lords) at the first hint of dissent or problem or even for their amusement. The fictitious Lannisters exemplify the fabled rapacious overlord/capitalist persecuting and abusing others for their own gain. The current business practice of summary employment termination at first glance appears similar to the "Lannister" approach, although it is not. In this business practice, termination is followed by escorting employees out of the building and simultaneously cutting off physical and computer access. This approach is also covered in the movie "Up in the Air" with George Clooney, including as to its possibly beneficial effect on some terminated employees. In the current business context, this "Lannister" approach is meant to ensure that someone leaving does not damage the business. It is also an attempt to ensure that everyone remaining in the business is going forward with at least a surface unity of purpose in line with the business leaders. The downside of extreme application of the "Lannister" approach for a current business is that without the opportunity for whistle blowers and robust internal dissent, good ideas may be missed and the business may head in the wrong direction and decline. For example, Queen Cersei Lannister is feared and cruel. No one dares to criticize her or give her contrary ideas so she misses many good ideas from her advisors regarding the defense of her realm and that could be fatal.

The Starks led by Eddard "Ned" Stark have a more humanistic approach, believing that everyone, even the "small folk" are important. The Starks try to treat everyone fairly and believe a leader should be openly responsible for his or her decisions. The Starks only execute employees and ruling associates when they cause intentional and unmistakable threatening problems. The "Stark" approach allows and encourages more dissent. The Starks believe it is best to value all people and to hear all opinions. The Starks do not punish someone for disagreeing with leadership in order to prevent squelching good ideas. Leaders are more vulnerable and responsible to everyone under the "Stark" model. The "Stark" leadership model of valuing people and their thoughts is intended to engender more participation, buy in, and loyalty by "the small folk" and by the Stark ruling associates. It is hoped that employees and partners will thereby have stronger allegiance to the Stark clan. In the current business context, the "Stark" method is more towards "facilitative" management to enthuse employees and business associates to even greater happiness and productivity. The downside to extreme application of the "Stark" leadership approach is ironically illustrated when Ned Stark tries to save Queen Cersei Lannister and her children even though he knows she is plotting against him. Ned does this by warning her to leave before King Robert learns of her incestual betrayal. For that warning and kindness, Queen Cersei schemes to hide her betrayal and has Ned beheaded as part of that attempt.

Which clan's business practices are best for business, those of the Lannisters or the Starks? No successful businesses operate on the "Lannister" approach as they cannot keep employees or associates in a free society. However, the Lannisters do illustrate one legitimate business practice helpful to all businesses. Choosing between eliminating potential problems early or late is critically important to the long term success of a business. Certainly, considering differing opinions is one way to be sure that critical decisions are more fully vetted. However, if someone continues to dissent unproductively after a considered decision is reached, an entire business can be dragged down. In that instance, a quick "Lannister" business "death" by termination of the employee or business associate with destructive or unproductive behavior should be considered. As to employees, "at will" employment laws allow this termination in most cases. As to other business associates, there is usually a clause in the business association agreement (partnership agreement) itself or in the law generally, to terminate the business association. Keep in mind that this is not a management only decision and an employee should consider leaving if they see the same types of unchecked, destructive circumstances occurring.

An employment or business associate termination is harsh no matter how you handle it. When a business relationship sours, you need to realistically evaluate the situation and act. Remember, you do not want to be Queen Cersei who acts reflexively and wreaks havoc on business solely for petty, short sighted reasons, nor do you want to be Ned Stark who acts late and indecisively and is headless.

Walter Shjeflo is a partner at Fox, Shjeflo, Hartley & Babu LLP in San Mateo. His telephone number is (650) 341-2900.

Disclosure of Material Facts

The duty of disclosure is a component of the duty of loyalty, but it also implicates the director's obligation to act with due care and in good faith. As part of the duty of care, a director should reveal all relevant material information that he possesses about a transaction to all who are in the position of making a decision about that transaction. The director has a duty to make an informed decision because it will ultimately affect the corporate interest and welfare.

Business & Corporate Entities: Corporations

Professional Corporation Basics

Medallion Signature Guarantees

Transfer agents and issuers of securities, pursuant to the Uniform Commercial Code, may require a guarantee of the validity of the signature of the person transferring the securities in order to prevent a fraudulent transfer. The Securities and Exchange Commission has designated institutions that may issue such guarantees, and the Securities Transfer Association has developed the Medallion Signature program for those institutions to follow in guaranteeing signatures.

Disclosure of a Corporate Opportunity

Generally, a corporate director breaches the duty of loyalty if she seizes a business opportunity for herself that the corporation was financially capable of undertaking or in which the corporation had a reasonable interest or expectancy. Additionally, the director's loyalty is called into question if she takes personal advantage of a business opportunity that was in line with the corporation's business.

Formation and Operation of a Nonprofit Corporation

Nonprofit corporations are a useful tool for organizing for charitable, educational, religious, literary, or scientific purposes while reducing the risk of individual liability in accomplishing those goals. A nonprofit corporation is often referred to as a 501(c)(3) corporation due to the tax code provision under which most nonprofit corporations are considered exempt from federal taxation.

Fox, Shjeflo, Hartley & Babu LLP is located in San Mateo, CA and serves clients in and around Belmont, San Mateo, San Carlos, Burlingame, Millbrae, Atherton, San Bruno, El Granada, Menlo Park, South San Francisco, Palo Alto, Moss Beach, Pacifica, Montara, Redwood City, Brisbane, Half Moon Bay, Daly City, Portola Valley, San Lorenzo, San Leandro, San Gregorio, Alameda County, San Francisco County, San Mateo County.

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