Broken Trust: Greed, Mismanagement & Political Manipulation at America's Largest Charitable Trust
Chapter 6: Shell-Shocked Lottery Winners
- Why did the Bishop Estate trustees argue that mandatory leasehold conversion was “not just unconstitutional, but un-American?” Do you agree with them?
- In our own words, explain why many homeowners chose to pay what they believed to be excessive prices for the land under their homes rather than to go to court.
- Bishop Estate’s investment consultant recommended that the trustees “diversify” their investments. What does it mean to “diversify,” and why would consultants recommend that?
- Bishop Estate trustees invested heavily in “private deals that offered the potential of large gains somewhere down the road, with the likelihood of little or no income in the meantime.” Was this a good idea, or a bad idea? Why?
- What was the Wall Street Journal’s point in describing Bishop Estate trustees as having the look of “shell-shocked lottery winners?”
- Was it good or bad that the trustees invested their own money in some of the deals in which they also invested Bishop Estate money? Why?
- Why do you think the other trustees neglected to tell trustee Stender that they had invested personally in some of Bishop Estate’s business deals?
- On page 84, the authors describe how trustee Peters “recused” himself as a Bishop Estate trustee so he could represent the buyer in a transaction were Bishop Estate was the seller. What does it mean to “recuse?” Assuming that the negotiated sales price was fair to both the buyer and the seller, did Peters do anything wrong? Explain.
- A section of Princess Pauahi’s Will is quoted at the top of page 85. Princess Pauahi wanted her trustees always to operate openly, yet for many years they did just the opposite. How could they just ignore such a clear provision of the Will? What if they had good reasons to keep secret Bishop Estate’s financial affairs?
- Trustee Stender wanted the trustees to adopt a “CEO-based governing structure.” In your own words, what is that and why would that be better than having each trustee act like a Chief Executive Officer (CEO)?
- On page 88, Bishop Estate staff members criticize the way the trustees behaved during meetings. One said, “We dreaded going in there. No one wanted to give them bad news. We knew we’d get hammered.” If you were in a leadership position, would you want others to tell you what they really think, or only what they think you want to hear? If you worked for bosses who did not like to hear bad news, would you tell them only good news? Explain.
- One Bishop Estate trustee described board meetings as a time where the trustees should be able to “yell and scream,” without anyone outside the meeting knowing about it. Do you agree?
- If it were your job to write some rules of conduct for trustees, what would you say about conduct at trustee meetings? Would your rules include a requirement that everything be kept confidential? What would be some reasons for, and against, a rule that prohibited anyone from telling others about things that go on at trustee meetings?