Board Case Study · Owner-Led (Distribution)
The founder deployed AI across quoting, scheduling, and customer communication. It works. The board found out eleven months later, from a customer, and discovered it wasn't sure it had the standing to be told.
The situation
A second-generation industrial distributor, $140M revenue, 320 employees, is 88% owned by the founder-CEO. Eleven months ago he approved and deployed an AI system that now generates customer quotes, schedules deliveries, and drafts customer correspondence. Gross margin is up four points. He considers it an operating decision.
A long-standing customer mentioned to a director at a trade dinner that the quotes now arrive in ninety seconds and read a little strangely. That was the board's first knowledge of the system. Subsequent questions surfaced that the tool sets prices within a band the CEO configured, that no one has reviewed what it says to customers, and that the vendor contract was signed without legal review.
The board has three outside members recruited two years ago when the company formalized what had been an advisory group. The charter language was never updated. Two directors believe they are fiduciaries; the CEO's counsel has described them as advisors. The question of what should have been escalated cannot be answered until the board settles what it is.
“You're asking why this didn't come to the board. I'm asking a different question first. Is this a board, or is it a group of people I ask for advice?”
Founder & 88% Owner
The decision on the table
The full case, scenario architecture, board materials, and facilitation notes, is shared with boards and partners on request.