Hercules-Mogul-Titan Global Industries (HMT) has been a leader in precision manufacturing for 75 years, thriving under the stewardship of three generations of the founding families. HMT started in a single, small manufacturing plant producing precision-machined components for a single customer. Over the years, it has expanded into a global enterprise with state-of-the-art facilities in the United States, Europe and Asia. Today, HMT specializes in the design and production of highly engineered components that serve critical applications in aerospace, defense, energy and medical technology.
HMT continues to be privately held, with a strong commitment to its long-term vision. As part of its strategic growth, the company sought private equity funding to finance a major acquisition, marking a pivotal moment in its history.
The company’s board has seven members, including Evelyn Hercules (chair and CEO), Nathaniel Mogul (COO) and Oliver Titan (CTO), who represent the third generation of leadership and the three branches of the founding families.
I’m Jim, HMT’s board observer and, on my more dramatic days, its board conscience. I don’t get a vote, but I do get a front-row seat — to observe, challenge and make sure discussions stay true to the company’s mission and its stakeholders’ best interests.
Which brings me to today. Standing outside HMT’s elegantly paneled boardroom, I feel less like a governance consultant and more like a TSA agent — minus the blue gloves, thankfully. My job? To scan for personal baggage — no X-ray required.
One by one, the seven board members arrive for their quarterly meeting, giving me a friendly greeting and the usual polite nods. But before they can waltz in, I stop them.
“Hold up! I need to know. Which hat are you wearing to today’s board meeting?”
It’s sort of like asking for a password before letting them through the gate.
A few chuckle. Bill, one of the board members, smirks and shakes his head. “Jim, you’ve seen us before. We don’t wear hats in the boardroom.”
I grin. “Oh, but you do. They’re just invisible. And trust me, they stand out plenty by how you act.”
Bill raises an eyebrow.
Continuing, I say, “Everyone walks in here with a perspective and a priority. The real question is, which hat are you wearing today?”
Pausing for a moment, I glance around before saying, “And since I’ve gotten to know you all pretty well, let me make this easy. I’ve got a list of hats for you to choose from.”
Taking the menu in hand, Bill reads the options.
•            The private equity/venture capitalist hat – Focused on short-term gains and earnings performance rather than long-term strategy.
•            The friendly family member hat – Advocates only for family members in the company while maintaining a cooperative tone.
•            The unfriendly family member (UFM) hat – Pushes for decisions that benefit relatives in one branch of the family. The UFM acts aggressively or disruptively.
•            The loyal family friend/crony hat – Supports the family or leadership unquestioningly, regardless of the company’s best interests.
•            The opportunist hat – Uses their board position to exploit opportunities for personal gain rather than the company’s well-being.
•            The sleazy hat – The more blatant version of the opportunist.
•            The legacy protector’s hat – Seeks to maintain past strategies instead of adapting to market changes.
•            The expansionist hat – Pushes for aggressive growth, regardless of risk or readiness.
•            The activist hat – Advocates for social or environmental causes, potentially misaligned with business goals.
•            The propeller hat – Overly focused on theoretical ideas without practical application, often distracting from key business needs.
•            The dunce hat – Consistently misunderstands key issues but still insists on voicing strong opinions.
•            The fiduciary board member hat – The only hat that truly matters, ensuring decisions align with the company’s best interests and responsibilities to stakeholders.
I pause. “Alright, folks — what’s your choice going to be?”
No shocker here: They all confidently declare the fiduciary hat as if there’s any other acceptable answer.
I nod, playing along. “Great choice,” I say.
But let’s be honest: I’ve been around long enough to know better.
—
So, what’s the big deal?
Why make an issue about a board member’s motivations and actions? Because the wrong hat could lead to a conflict of interest, shifting priorities away from the company’s best interests, eroding trust, misaligning strategy and even causing long-term damage. A boardroom filled with opportunists, dealmakers and legacy protectors can steer the company away from smart decision-making.
Understanding conflicts of interest
A conflict of interest arises when personal interests interfere with the duty to act in the company’s best interests. A widely accepted definition:
“A conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest.”
The two primary fiduciary duties of directors are:
Duty of care. Acting in good faith and making informed decisions that serve the company’s best interests.
Duty of loyalty. Prioritizing the company’s interests over personal gain and avoiding self-dealing.
A conflict occurs when a director’s secondary interest — whether financial, relational or opportunistic — compromises these duties. For example, a private equity representative may prioritize their fund’s returns over the company’s well-being, breaching the duty of loyalty. Family- or cronyism-driven interests can lead to poor decision-making, undermining the duty of care.
The role of directors as “good shipmates”
Serving on a board is akin to seamanship — requiring skill, attention to detail and a deep sense of responsibility. Directors, like shipmates, must collaborate harmoniously and navigate ethical challenges with foresight and decisiveness. Just as a captain must steer clear of hidden reefs, directors must recognize and manage conflicts before they jeopardize the company’s mission.
It’s easy to point fingers at boards as a whole for fostering conflicts, but the reality is more nuanced. Conflicts don’t (or at least shouldn’t) stem from collective board actions — they usually start with individual directors. When a board fails to address these issues, it only makes matters worse. But, at the core, it’s often one director’s actions, priorities or motives that set the conflict in motion.
Conflicts don’t just materialize out of thin air; they walk into the boardroom with the directors themselves. Here are a few common sources.
• A director carries it in upon joining (shame on the board’s weak due diligence).
• A director seeks out the conflict while on the board. He or she is opportunistic and careless. I know of one instance of this: How about the nonfamily CEO/board member of a second-generation manufacturing company who a) colludes with a plant supervisor to create a fictitious vendor company; b) bypasses the regular payables process; and c) siphons out significant cash to help finance a lavish lifestyle. (They got caught.)
• The conflict finds the director and he or she latches on. They arrive like an unwelcome guest — unexpected and disruptive.
• A director unknowingly gets into a conflict situation (see dunce hat above). This is “dramatic irony,” which occurs when the audience knows something that the characters don’t.
Mitigating and resolving conflicts of interest
Conflicts of interest on a board can feel like a mutinous crew threatening a ship’s stability. While dramatic measures like “walking the plank” might seem amusing, the reality requires structured solutions. That said, the metaphor offers a reflection on accountability — encouraging directors to own up to their actions while providing a path forward.
Directors should:
•            Avoid. Proactively steer clear of situations that could lead to conflicts.
•            Disclose. Transparently report any actual or potential conflicts.
•            Recuse. Step away from discussions or decisions where impartiality is compromised.
•            Resign. If the conflict is irreparable, step down from the board.
Boards should:
•            Document policies. Establish clear conflict-of-interest guidelines.
•            Clarify processes. Define steps for identifying and addressing conflicts.
•            Investigate thoroughly. Gather facts to determine the extent of the issue.
•            Assess intent. Differentiate between deliberate actions and honest mistakes.
•            Evaluate alternatives. Explore solutions, such as reassigning responsibilities.
•            Mediate. Engage an objective third party if internal resolution efforts fail.
•            Take action. If the conflict persists, request the director’s resignation or initiate removal procedures.
By embracing openness, principled leadership and keen awareness, boards can stop conflicts before they spiral into full-blown crises. Keeping fiduciary duties front and center while fostering honest, ongoing dialogue helps ensure the company stays on track, steering through challenges with both integrity and confidence.