A Pawn's Passage-Chapter 1203: The Board of Directors

Under the Western corporate structure that was introduced, the chair of the board had the authority to convene board meetings and could remove anyone within the company from their post, except for directors and supervisors. That was because directors and supervisors were not company employees; they were the company’s owners and arbiters.

Major shareholders might convene a general shareholders’ meeting to elect members of the board of directors.

The chair of the board was elected by the board itself and must obtain the approval of more than half of the directors.

In general terms, the shareholders’ meeting determined the composition of the board, while the board held the company’s decision-making power, and the number of shares determined one’s influence within the shareholders’ meeting. That was because the more shares one had, the greater the risk borne, and thus the greater the say.

At times, a major shareholder would serve as the chair of the board, thereby controlling both the shareholders’ meeting and the board. This created the illusion that the chairman was the most powerful position.

This was like the fifth-generation Grand Master controlling the Golden Tower Council because no one dared to oppose him. But the sixth-generation Grand Master did not control the Golden Tower Council, so the situation became far more complicated.

In reality, if the chairman were not a major shareholder, they would not have the final say.

The largest shareholder of the Nanyang United Trading Company was the Poluo Daoist Mansion.

Zhang Yuelu believed that the Daoist Mansion should appoint a Daoist priest to serve as the chairman and directly participate in the company’s decision-making and management, wielding decisive authority.

However, Qi Xuansu held a different view. In the end, the two reached a compromise. The Daoist Mansion, as the major shareholder, would not directly participate in management but would instead appoint personnel to form a supervisory board to restrain the board of directors. By procedure, the supervisory board would also be elected by the shareholders’ meeting.

Qi Xuansu partially agreed with Zhang Yuelu on one point. The board of directors must remain under the control of the Daoist Mansion, and appointments to the board must be handled with great caution.

In the groundwork Qi Xuansu had laid, the Poluo Daoist Mansion held 30% of the shares, the Fenglin Trading Company held 20%, and Du Yuhua held 1%. Together, they totaled 51%, enough for absolute control. Moreover, figures such as Qi Muyu and the Ziwei Hall would not openly oppose Qi Xuansu. With another 10% added to his side, Qi Xuansu enjoyed an overwhelming advantage.

This was precisely why Madam Qi’s holding shares through a company was so critical. Pei Xiaoyun and Genki only held shares in the Fenglin Trading Company, not directly in the Nanyang United Trading Company. Strictly speaking, they were not shareholders of the latter and had no voting rights. Within the Fenglin Trading Company, they were merely minority shareholders. Madam Qi was the major shareholder and held absolute control. Thus, only she could represent the Fenglin Trading Company in exercising the voting rights of the second-largest shareholder at the Nanyang United Trading Company’s shareholders’ meeting.

In other words, although Qi Xuansu held no shares himself, by representing the Poluo Daoist Mansion and with Madam Qi’s support, he already controlled the shareholders’ meeting. Therefore, he wielded absolute control over the Nanyang United Trading Company. Whoever he wanted in office could take the position, and whoever he did not like would never make it.

It was actually absurd for someone who did not even hold a fraction of a share to control the company’s highest authority, but that was the reality. 𝘧𝓇ℯℯ𝑤ℯ𝘣𝓃ℴ𝓋𝑒𝑙.𝑐𝘰𝑚

Everyone condemned one-man rule, yet when they themselves took charge, they all came to like the one-man rule.

Qi Xuansu was not a person without desires. At present, he had no interest in money, women, or men. What interested him was power.

With the shareholders’ meeting restructuring complete, the next step was to re-elect the board of directors. The number of board members was set at 13 for the time being.

Members of the supervisory board were not part of the board of directors, which Qi Xuansu had separate arrangements for.

Apart from the chairman, the board members were divided into independent directors and executive directors.

Executive directors participated directly in the company’s operations. Independent directors, on the other hand, had no ties to the company and could express their views independently, including on major board decisions. Their position was relatively detached and not overly entangled in internal factional interests.

Generally speaking, the number of independent directors should not be fewer than one-third of the total board members.

In this case, five independent directors were required. These five independent directors would not participate in the management or operation of the Nanyang United Trading Company.

Qi Xuansu already had three candidates in mind: Madam Qi, Qi Muyu, and Du Yuhua. However, Madam Qi was too busy and held multiple positions, making it inconvenient for her to appear personally. Instead, Pei Xiaoyun and Genki would serve as independent directors, as representatives of the Fenglin Trading Company. That made four seats.

The remaining seat would go to the president of the Lion City Merchants’ Association. This person’s business was not the largest in Lion City, but he was the most respected, often acting as a mediator and intermediary, so his words carried weight.

These were minor details. The independent directors mainly played a role in major decisions. The crucial point lay in the choice of the chairman. That was the matter of utmost importance.

If the Nanyang United Trading Company were likened to a great ship, then the chairman would be its helmsman. A good helmsman could avoid hidden reefs and weather raging storms. Otherwise, the ship could easily capsize, causing incalculable losses.

In the past, Sun Jiaofeng had been the chairman and knew the most secrets. That was also why he ultimately chose self-immolation.

Now, who would replace Sun Jiaofeng? The person had to be both capable and trustworthy.

There were many capable people, and many reliable ones as well, but those who met both criteria were few.

According to Daoist rules, wandering Daoists were not considered, while Daoists holding official posts could not easily hold dual positions, thus eliminating many potential candidates.

For this matter, Qi Xuansu held several in-depth discussions with Xu Jiaorong, Xie Jiaofeng, and Manager Hu of the Taiping Bank. In the end, Manager Hu recommended someone to Qi Xuansu.

This person was named Chen Shuwen. From the name alone, one could tell that he was of the same generation as Chen Shuhua and Chen Shuzhen. However, the Chen family had been rooted in Poluo for many years and had branched out extensively, much like the Lin family in Lingnan. As a result, Chen Shuwen had little to no connection with Chen Shuhua and the royal family. They did not associate in daily life. Chen Shuwen had long since become no different from an ordinary commoner.

That said, Chen Shuwen could not truly be considered an ordinary commoner either. He was highly capable and talented. In his early years, with sponsorship from an elder of the Chen clan, he had traveled through many Western countries and became deeply familiar with their various systems. Later, when Western corporate structures were introduced to the East and the Sun and Wang families established the Nanyang United Trading Company, they had once hired Chen Shuwen as the chief manager. Eventually, however, due to differences in philosophy, Chen Shuwen resigned and left.

This man was capable and familiar with the Nanyang United Trading Company. Thus, having him serve as the chairman would be a fairly suitable choice.

Qi Xuansu did not understand business operations and preferred to let professionals handle such matters. That was why he had vetoed the proposal for the Daoist Mansion to take full control of the Nanyang United Trading Company. Nevertheless, he did agree that the company should remain under the Daoist Mansion’s control. From this perspective, although Chen Shuwen was not a shareholder, he could serve as the chairman as the representative of the major shareholder, which was the Poluo Daoist Mansion.

If Chen Shuwen proved sufficiently capable, Qi Xuansu would not mind letting him shoulder both roles as the chairman and the chief manager.

The key issue lay in whether Chen Shuwen was trustworthy.

However, as long as the supervisory board was properly controlled and prevented from colluding with the board of directors, reliability could be ensured through external checks.

Before making a final decision, Qi Xuansu naturally wanted to meet Chen Shuwen in person, so he had Chen Jianchou make the arrangements.

What he did not expect was that Chen Shuwen refused to meet him, claiming that he had grown accustomed to a carefree life and no longer wished to trouble himself with such matters.

Hearing this, Qi Xuansu only thought of two possibilities. Either Chen Shuwen truly did not wish to return to the hectic life, or he was acting aloof, waiting for Qi Xuansu to personally come calling.

After all, capable people were often eccentric.

Qi Xuansu did not mind lowering his posture and showing courtesy. The key question was whether it would be worth it.

If Chen Shuwen could truly uphold the Nanyang United Trading Company, then it would be good for everyone involved. But if he struck a lofty pose and then botched the job, it would be a massive waste of time.

In the end, Qi Xuansu decided to pay him a visit, bringing along Little Yin and Chen Jianchou.

Chen Shuwen lived in Lion City. Since he did not lack money, his residence was quite respectable.

Chen Jianchou had already had prior contact with Chen Shuwen and was thus somewhat familiar with him. After informing the gatekeeper, Chen Shuwen came out personally to receive the Chief Deputy.

This was an elderly man of around sixty years old. His beard was white, but his eyes were sharp and piercing.

Qi Xuansu did not put on airs and took the initiative to offer a formal salute.

Chen Shuwen returned the salute. “I have long heard of your great reputation, Sage Qi.”

After a brief exchange of pleasantries, the group went to the main hall and took their seats.

Chen Shuwen said, “I understand your purpose for visiting me, Sage Qi. But I have one condition before agreeing to it. If you can’t agree to it, then please forgive this old man for being unable to comply.”

Qi Xuansu said, “Please speak, Old Master Chen.”

Chen Shuwen continued, “The Nanyang United Trading Company is undoubtedly a colossal entity, almost like a small independent kingdom. Looking through the historical records, the principles of rise and decline actually revolve around land. After the great turmoil of the late dynastic era and the ensuing age of chaos, the population plummets, and much of the land is without an owner. Thus, in the early years of a new dynasty, people need not struggle against one another. They need only to reclaim wasteland. With encouragement from state policies and the opportunity to acquire more land, this marks the dynasty’s period of ascent.

“When the land has all been allocated, the dynasty enters its middle period, and land consolidation begins to show itself. At this stage, it’s nothing more than survival of the fittest. But as land consolidation grows more and more severe, it ceases to be about survival of the fittest and instead becomes a loss of control by those in power. After that, reformists, modern thinkers, and various factions appear one after another, but these are merely last struggles. Even if they succeed, they only prolong the dynasty’s rule by a few decades. That’s because the accumulated problems are too deep to fix.

“In the end, with too many people and too little land, and with chronic fiscal deficits, all it takes is a push from natural disasters or man-made calamities for the dynasty to collapse, plunging into yet another age of chaos.”

Qi Xuansu asked, “Old Master Chen, do you believe that the Nanyang United Trading Company is likewise burdened beyond recovery?”

Chen Shuwen abruptly shifted his tone. “It is not.”