Some films you can just watch over and over again.  You’re not sure why, because they are not necessarily the best films ever made.  But clearly there is something that resonates. One of these films for me is Willy Wonka and the Chocolate Factory.  Perhaps because it always seems to be on cable, or because Gene Wilder is a genius, I have viewed this movie several times recently and have come across some disturbing things that spill over into real world problems, namely poor corporate governance. 

 The question we all should be asking: Where was the Wonka Corporation’s Board of Directors during all this nonsense? They have a CEO who is clearly off his rocker who, while apparently doing decent sales in light of some heavy competition from Old Slugworth and launching a successful Golden Ticket marketing campaign, is putting the company at risk and upping the potential to destroy shareholder value along with the company itself. Here is someone who, when faced with his own mortality decides that if he wants to view paradise, he will simply look around and view it, no matter that the company may be crumbling around you. Needless to say, it’s not exactly the kind of strategic thinking you are looking for from the modern CEO. Let’s take a look at some of Mr. Wonka’s offences: 

Access to facilities

According to the film, the Wonka factory, an aging hulk of a building that looks like a relic left over from the early years of the Industrial Age, was on lock down for a few years in which no one was allowed in and no one ever saw anyone come out. The public, and the government (Where were they in all this? Was he even paying taxes?) has no way of knowing what is going on in there in terms of safety standards. How could a well informed parent even think about letting their child eat anything that came out of that place? Problem: A PR nightmare to say the least and perhaps the subject of future recalls and government action. 

Use of slave labor

Ok. Let’s get down to brass tacks on this one. Mr. Wonka fires all of his paid workers and brings in these Oompa Loompas from Oompaland under the guise that their lives were so terrible there. Nevermind the threat to national security in that he smuggled these people in from some unknown locale, the truth is he essentially enslaved a whole race of people. And then makes them perform the equivalent of minstrel shows. Sound familiar? Heart of Darkness, anyone? Who are the real uncivilized ones, Mr. Wonka? Problem: PR nightmare and potential ACLU, Local Union and government action.

Plan of Succession

Mr. Wonka’s succession plan certainly leaves much to be desired as it plays out before our eyes on screen. Luring five children with serious developmental flaws and their idiot parents to the factory with the promise of a lifetime supply of candy is no way to choose a successor to a multinational corporation. And forcing them to enter into an illegal contract (they were under 18 and not legally able to enter into one), and then basically putting them through mental, and in some cases physical, torture isn’t exactly going to play well in the media. Couldn’t leave it to a grown-up, as Wonka claims? No, because a grown up would be responsible and would have come up with a solid succession plan, perhaps grooming the creepy guy who poses as Slugworth or perhaps one of the Oompa Loompas to take over. Problem: Exposes the company to potential charges of child endangerment. 

Poison Pill

So, instead of developing a solid plan of succession, Wonka develops the ultimate Poison Pill that will destroy not only his company, but in theory could take down the entire confectionary industry: The Everlasting Gobstopper. It’s basically the Nuclear Option for the candy industry. Wonka claims that he is making it for poor children with little pocket change. But how would he prevent rich kids or even kids with a moderate amount of pocket change, from buying it?  I mean, rich people generally are rich because they are good with money, right? So why would they continue to allow their own children to waste money on frivolous candy, when they can just pay for it once and be done with it?  Problem: Potential destruction of business and entire industry.

But, perhaps that’s the answer. This is the reason why the Board of Directors has done nothing to oversee this maniac. He has a gun to their heads. It’s his way or he destroys everything. Even if he does some pretty dangerous things on behalf of the company, he has the power to destroy it. 

The problem in the real world comes about because Wonka’s gamble pays off, as far as we know. Against all odds, he finds that one kid (albeit a criminal himself; he stole fizzy lifting drinks) who can run the company and, in our world, the Everlasting Gobstopper is distributed in a less potent form, lasting only about 20 minutes or so. So now CEOs and Boards of Directors think that any harebrained scheme they come up with or any sort of lavish spending at the shareholders expense will simply work. I mean, is looting the corporate coffers for gaudy parties or getting a golden parachute deal for a job poorly done any different than luring unsuspecting children into your big freaky factory with the promise of a lifetime supply of candy?

So, Mr. Wonka, a hand well played. But it is you that I blame for the rise of bad corporate governance. I’m sure because of this column that you will be hearing from Bob Monks and Nell Minow real soon. Lucky for you, your golden parachute is probably an actual golden parachute and with the price of gold today, that will be worth a pretty penny, you weirdo.

 

 

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