Discovering a Governance Drama in a Pharma Thriller
For Blood and
Money: Billionaires, Biotech, and the Quest for a Blockbuster Drug, by Nathan
Vardi, is a novel grounded in real events from the American pharmaceutical
industry. It centers on the conflicts and hardships that executives and
employees face over the course of developing a new drug. I did not pick up this
book out of any particular interest in pharmaceuticals. I came to it naturally
while participating in the 23rd cohort of Thinkubation, and in an unexpected
place I found a compelling scene of corporate governance. On pages 52 to 55,
the author describes a conflict between Robert Duggan — an executive and
investor — and Miller, an inside director, as Duggan joins the board of
Pharmacyclics, a privately held pharmaceutical company in California.
A Boardroom Battle Over Control
Duggan, a
director presumed to be serving in a non-executive capacity, visits Miller's
office in Sunnyvale and sets a stack of folders on his desk. Each folder holds
the résumé of a candidate Duggan believes should be appointed to the
Pharmacyclics board.
Duggan tells
Miller that the board's composition needs to change. Miller pushes back, asking
whom Duggan has in mind to replace and insisting that the sitting directors are
all capable, well-regarded people. Duggan simply asks him to look through the
folders.
Duggan believed
Pharmacyclics needed a different kind of board — one that could hold Miller
more accountable to shareholders. Miller began reviewing the materials but
found every candidate Duggan proposed unimpressive...
Over the following weeks, Miller met with each of the candidates Duggan had recommended and concluded that none of them belonged on the Pharmacyclics board. Unlike the sitting directors, they were in no position to offer Miller genuinely useful counsel; they were, in effect, people who would simply do Duggan's bidding. Even after hearing Miller's assessment, Duggan insisted he would reshape the board on his own terms, declaring that he would wage a proxy fight if necessary to win over a majority of shareholders. At that point, Duggan's hardline maneuvering began to look, above all, like a bid to seize control of the company...
Miller ultimately
convened a board meeting not at Pharmacyclics headquarters but at the offices
of the law firm Latham & Watkins in Menlo Park, roughly 22.5 kilometers
away toward San Francisco. Duggan, though a director, was not invited. The
other directors were reluctant to wage a proxy fight against him, wary that
doing so might expose them to shareholder litigation or personal liability.
Instead, three of Pharmacyclics' six directors chose to resign. Miller, too,
after considerable deliberation, decided to leave the company...
Lessons on Privilege, Fairness, and Governance
What caught my
attention in this scene was the fact that the board meeting was held not on
company premises but at an outside law firm. Earlier in the book, Duggan had
pressed Miller hard to bring one of his own associates on as a full-time
employee, and that person is later shown to have joined the company. With
someone inside the company who could serve as Duggan's eyes and ears, it
appears that Miller's side chose the law firm as the venue precisely to keep
the discussion out of internal view. This was the first time I had come across
such an arrangement, and it struck me as notable that boards in the West
sometimes convene at law firm offices.
On reflection,
this was actually a fairly sound choice. The United States has long
institutionalized attorney-client privilege (ACP) — the confidentiality that
protects communications between lawyer and client. Korea only recently enacted
comparable legislation, whereas in the United States this has been an
established right for a long time. It struck me that when confidentiality of
board deliberations is essential, holding the meeting at a law firm's office
can be a genuinely valid approach.
At the same time,
this scene confirmed that the governance of privately held companies in the
United States is not so different from that in Korea. It depicts a director
with a substantial equity stake pressuring the CEO to bring his own associates
onto the board, and even handing over a list of preferred candidates directly.
Miller dismisses Duggan's nominees as mere puppets, but on reflection, the
existing board itself had presumably been assembled to suit the CEO's own
preferences, which makes that criticism less than fully persuasive.
It is also quite
telling that certain directors were left out of the meeting altogether. This
challenges the vague assumption that boardroom procedure in the West is
inherently fair. Outside directors at Korean companies are often described as
fairly passive, but this book suggests that directors of privately held
American companies are not necessarily proactive about resolving problems when
they arise, either. Perhaps there is no need to conclude that Korean corporate
governance lags so far behind that of the West.
Of course, the
period the novel covers is around 2008. It is interesting that the way
privately held U.S. boards operated at the time was not so different from
practices in Korea. It is hard to say with certainty how much has changed
since, but the underlying dynamics may not have shifted all that much. Unlike
companies listed on the NYSE or Nasdaq, directors of privately held companies
face a relatively low risk of being sued by a broad, unspecified body of
shareholders. And with less external pressure, the incentive toward
independence naturally diminishes as well.
Copyright ⓒ 2026 Mecklin Kim. All rights reserved.
