"Then explain them," Isaiah said. "Which clients were retained because of the spending? How many of the events generated documented business opportunities? Where did those opportunities appear in the pipeline, and how did they compare with the costs?"
Charles opened his mouth and then closed it. The questions were simple enough that Philip had once expected to see them in routine operating reviews. What made them difficult was the absence of an answer Charles could demonstrate. He repeated that the relationship value was qualitative and could not always be assigned to a particular invoice.
Margaret leaned forward. "Qualitative doesn't mean unaccountable," she said. "We asked for that analysis in June, and we still haven't received it." Her voice was quiet, but she was addressing the entire board as much as Charles. "I should have pressed harder when the report failed to arrive. I'm recording that now as part of our oversight failure."
Isaiah acknowledged the statement with a nod. The admission was important to him because accountability in a boardroom could not begin and end with the most convenient person to blame. He had watched acquisitions fail when directors replaced a disgraced executive, congratulated themselves on the decisive action, and resumed the same habits with a different name at the top. Margaret had recognized that danger without being prompted.
Dr. Mehta opened a second binder. "The next issue is Northbridge Strategy Partners," he said. He was a slight man in his fifties whose measured delivery made difficult findings sound almost plain. "We examined the contracts and invoices provided in the data room, payment records supplied by Meridian, and a set of meeting calendars obtained through authorized diligence requests. There are material discrepancies that require independent review."
He displayed an invoice for a strategic client-advisory session allegedly held in late April. The invoice listed seven senior Meridian attendees and described a workshop on European market expansion, but flight and calendar records suggested that three of the named attendees had been outside the country during the scheduled meeting. The invoice included no presentation, draft, work product, or contemporaneous notes. A later email thread suggested that someone had been asked to create a summary after the invoice was submitted.
"That's administrative sloppiness," Charles said. "Not evidence of a scheme."
"It may include sloppiness," Dr. Mehta replied. "We're separating unsupported charges from services that can be documented. We are also reviewing why approvals passed through an exception code associated with your office."
"Every senior executive uses discretionary authority at times," Charles responded. He looked toward the directors, seeking the reassurance of their familiar habits. "This company would stop functioning if every invoice required a public hearing."
"No one is proposing a public hearing for every invoice," Elena Park said. "We're proposing a properly documented review of transactions with undisclosed relationships and unusual authorizations. That is what the directors owe this company."
Isaiah turned a page. "The listed managing member of Northbridge is married to your wife's sister," he said. "That relationship should have been disclosed under Meridian's conflict policy. Can you explain why it wasn't?"