Beware! Sharks, rogues directors and swindlers swim in these waters.
I had a wake up call recently when a rogue director swindled a client out of a significant amount of money. It was just one of those experiences that leaves you extra weary about who to trust in business.
My client, went into a contract with a client (someone she new from her corporate days) with the agreement that a commission is paid based on a percentage of transaction. This transaction was straight forward. My client delivered but the rogue director did not hold her end of the bargain when it came to paying my client – the story changed into a nightmare.
My client was left high and dry. After seeking legall advice post operatively, it become apparent that the rogue direct know how to play the law. There was a clause in the small print, which meant that pursuing legal action would be expensive and might still not recoup any funds.
After many emails and verbal exchanges, the rogue director finally agreed to transfer an amount that was less than 10% of my client’s fees.
The actually amount that she finally transferred also followed the trend of being less than the amount she agreed to transfer.
The sad thing was that this rogue director was someone that my client, knew and had done work with in the past.
Greed and rogue directors
It seems that when the stakes are upped, people seem to succumb to their inherent greed, especially rogue directors as researched by Dan Ariely, the world renowned behavioural economics research.
And this situation arose even when dealing with people that she supposedly knew and kind of trusted!
So why am I sharing this story?
So that you can learn from her experience and hopefully you will be more alert next time you find yourself making big deals with people you kind of don’t trust – you know who I mean :).
Identifying rogue directors
The truth is that for the most part you cannot totally avoid dealing with these people. You can try but because rogues come disguised as friends, clients, employees and sometimes even partners, there is always a chance that you’ll let your guard down.
The sad thing is that the austerity measures in the UK also make it hard to persecute dishonest people like this.
Dealing with rogue directors
Your best bet is to take every necessary step to ensure that you are not exposed.
- Get it in writing – my client did this but got caught out by the small print.
- If the amount of money involved is significant then get a lawyer to review the documents before you sign anything. Only lawyers can understand their language so get one involved as soon as you can.
- Trust your instinct, if you gut tells you to be careful then you need to be. We then to underestimate the power of our instincts.
If you are a company director yourself, then you may benefit from this article “Are you a small business director? You need to read this!”.
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