Ep261: Tony Fish – CEOs Can Defraud a Business in Very Hard to Detect Ways

Listen on

Apple | Overcast | Stitcher | Spotify | Other

Guest profile

Tony Fish thrives in complex, ground-breaking, and uncertain environments, bringing proven judgment and decision-making skills with cross-sectorial experience. He has a track record of sense-making and foresight, with enthusiasm and drive that is contagious. Tony is a maverick and (un)intentional rule breaker.

His focus is on how the future of corporate governance, decision making, and judgment will be affected by complex data at the corporate board level. This focus leads him to speak about what board meetings will look like in 2025, and the implications and unintended consequences.

Tony has founded, co-founded, sold, and listed many businesses and remains deeply passionate about new ways of creating value, inspiring, and supporting the next generation of thinkers and doers.


“You learn the most from the worst and the toughest times. There is no doubt that you go into your worst investment to learn more.”

Tony Fish


Worst investment ever

Tony made his worst investment ever as a board chairman. His company had a simple idea to deliver a product to three million captive customers in the UK market. Those customers had already fairly much adopted the product, but they were particularly sensitive to price. For this reason, all of the existing players, because of their large infrastructures, could not offer the price that would see the customers carry on being incredibly loyal.

Getting it right from the start

With this advantage, Tony’s company started from scratch with a different philosophy and different economics and got price efficiency from day one. The company wanted to create something which was highly efficient, effective, and built from the ground up.

They identified a power player, which was a company that had access to their market and utter control over the digital channels to this market. They did a cross-shareholding with this supplier to get a deal, which gave them access to that market in terms they could not get in any other way. The supplier offered a superior product with a subscription model, which they could now offer to this captive audience.

Capturing the customer

The company raised Series A, which was just short of 10 million pounds in about four months. So basically, they were swapping existing customers from one platform to another platform with a much better cost advantage.

In less than six months, they had a significant customer base, and each subscriber was paying about 20 pounds per month. After just less than six months, they were making five million pounds a month in income.

Scaling the business

The company needed to raise more capital for cash flow, and before they could do it, they had to go back to the supplier and get better terms because the terms they had would not go to a large scale. At the point, they had committed about 20 million pounds in debt and equity.

Tony believed that the supplier would buy the business themselves because the company had built a substantial new customer base. With the supplier’s new platform, they would be able to offer something they hadn’t done before. So it was a pretty obvious strategic exit.

Tony set up a meeting with them. He went as chair of the board and took one of the other major shareholders and the CEO. They went into the meeting with high expectations of getting a better deal or, better still, opening up the conversation of the supplier, becoming either a strategic funder or taking the business out when it passes a specific number.

Here comes the shocker

So after the pleasantries and Tony presenting their proposal, the supplier asked them how many verified customers they had. Tony was feeling quite proud of the company’s success, given the high numbers that the CEO had been giving the board. So he goes through the numbers, ready to provide them with an impressive figure. But shock on him, there was an enormous gap between the data the board had and the data the supplier had. Tony and the shareholders could not believe it.

Over the next three days, the board found out that the CEO had been lying to them. Not only had he been lying but had been utterly fabricating the numbers. On top of that, there was a massive fraud issue, and all of it was hidden. The systems that the board believed were in place and working turned out to be a user interface that was completely fabricated.

The friend turned foe

The CEO was Tony’s mate, and they had worked together before on other projects. Tony came to find out that his mate had a hidden past and was not even qualified for a CEO’s role. He had been stealing from the company all along and misleading the board. The CEO was also about to jump ship and had found another job.

Tony had made the worst investment ever when he hired the CEO. Needless to say, there was no deal made with the supplier. The board also was liable for all the mess that the CEO created.

Lessons learned

Directors carry all the liability

The company and its shareholders have limited liability. Directors, however, are 100% liable. There’s no escaping. Be aware that sitting on the board of a company is not a nice little end of life career; it’s a serious role with profound implications.

Being a board of directors requires emotional maturity

To be a successful board of directors, you have to have emotional maturity with the highest emotional sense. Don’t be judgmental or controlling, but seek diversity, especially of reporting.

Andrew’s takeaways

Being an advisor is the better option

If you want to be involved in a company, be an advisor, not a board member. Because as a board member, you are liable for any fraud going inside the company, and you can’t prove that you made an effort to try to detect it. There is a lot more risk for a board member than an advisor.

Actionable advice

Find additional ways to know if what you’re being told is true. Yes, this is tremendously difficult because we’re now remote, but it’s a field day for liars and manipulators, so you’ve got to be extra careful.

No. 1 goal for the next 12 months

Tony’s number one goal is to finish on a piece he’s working on to do board meetings in 2025.

Parting words


“Just keep listening to the rest of the podcast backlog episodes—just genius. I love them. Thank you, Andrew.”

Tony Fish


Read full transcript

Andrew Stotz 0:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. My name is Andrew Stotz, from a starts investment research, and I'll be your worst podcast hosts today. And I'm here with featured guests, Tony fish. Tony, are you ready to rock?

Tony Fish 0:25
I am Andrew. Very,

Andrew Stotz 0:27
yes. Well, I'm going to introduce you to the audience. Tony thrives in complex groundbreaking in uncertain environments, bringing proven judgment and decision making skills with cross sectional experience. He has a track record of sense making and foresight, with an enthusiasm and drive that truly are contagious. Tony is definitely a maverick and an unintentional rule breaker. His focuses on how the future of corporate governance decision making and judgment will be affected by complex data at the corporate board level. This focus leads in to speak about what board meetings are going to look like in 2025. And the implications, and most importantly, the unintended consequences. Tony is founded, co founded, sold and listed many businesses and remains deeply passionate about the new ways of creating value inspiring and supporting the next generation of thinkers and doers. Tony, take a minute and Phil, any further tidbits about your life.

Tony Fish 1:29
Andrew, that's I don't know where you've stolen that from. But I absolutely love it. Thank you. The only bit which I find most people are quite shocked at is I left school with no qualifications. So I'm severely dyslexic, slightly autistic, and probably on the Asperger's scale, which doesn't really reflect well in your LinkedIn profile. But that's the reality of who I am. So I've actually never had a job. I've never been the paid employee, I've always gone off built things and gone through that process.

Andrew Stotz 1:59
It's interesting, because when I was, I was recently I met someone I asked her, What do you do? And she says, Well, I help attention, you know, hyperactive and attention deficit disorder kids. And I said, Well, I pretty much was that, you know, they drug they got me on drugs at a young age and all that stuff when I was, you know, pretty young. And, and I've always, really my whole life have been jumping from one thing to another. And she said something that really kind of shocked me, she said, You know, I really feel sorry for these kids.

Tony Fish 2:31
No way.

Andrew Stotz 2:32
And I said, I said, Hold on, wait a minute, you're first of all, you're calling a kid, who can't sit still in a classroom and listen to a boring ass lecture. You're calling them abnormal? You know, I'd say the other 99% of the kids who are just mindlessly sitting there listening are the ones that have a problem, number one, number two, my attention deficit disorder, or whatever you want to call it has given me the ability to hyperfocus it's given me the ability to really jump into things and add value. And I've dealt with it not by trying to get rid of it, but by making the most of it and also hiring people around me that have those skills that I don't have. And you know, that's the reality of life, each of us are given different skills. And the mix of people in a company is what really brings out the best of everybody. So that was my response, which was a little bit surprising for her. But you know, any thoughts about from your side of that? What are those, you know, how does that manifest

Tony Fish 3:36
itself? how it's going to end Andrew podcast over you've done it? That was the best answer ever. And you know, what, what more investment advice do you need? You summed it all up? Happy days were sorted? Yes. I say it's the best gift my parents gave me.

Andrew Stotz 3:54
What would you say is like the the thing that you've derived from that, that that that may be somebody that doesn't have that type of behavior, or that type of, you know, what they call disorder, but who doesn't have this type of thing? You know, what can you do? What can you see?

Tony Fish 4:11
And so one of the one of the remits, that a board has, is to sense what the markets telling you. So you have to two principal things, what is what is my team telling me? And you've got to sense that and then got a sense what the markets telling you and then you've got to derive, there's a gap. And if the gap is the right gap, the wrong gap, or there's no gap and you're doing the right thing, and the market is telling you what the company is telling you. And that's what you're always searching for. And so many people who are not hyper thinkers and outside and able to embrace wide concepts just perceive that the market is actually just saying exactly what the company is saying. And therein lies so many difficulties. They don't see the gap, and yet, totally agree by having a wider focus. And jumping from place to place, what you're able to start to pick up is actually the market isn't telling me what I believe the company was supposed to be doing. And therefore we have a problem. And while I might be able to raise what the problems are, I might not be the best person to actually solve the problems and totally agree with you, you can go and find the right person to solve that particular problem. build great teams,

Andrew Stotz 5:25
huh? Yeah. And one other thing I want to ask you about boards before we get into the question. Yeah, the, you know, my, one of my businesses in Thailand, my best friend Dale runs, he's the managing director. And we're equal shareholders in it. But I do not work for the company. It's called coffee works our b2b coffee roasting business. And basically, in that business, when I look at Dale, you know, Qi is full of positive energy. And I just think growth, growth growth. He is a typical CEO who's confident who's positive, who's overly positive, if you could imagine, we're not a publicly listed company. But if you went to an event, you'd say, yeah, we're gonna, you know, we're gonna take over the world. And I'm sitting in the background going, Yeah, well, you know, and then, of course, when I think about my role, my role is a little bit more like, let's say, Chairman versus CEO. And what I think about is risk. And so over time, what I've kind of come up with the model in my head is like Dale's growth. Dale, CEO, CEOs growth board is risk. If the board focuses too much on growth, then they don't do their job of risk. And it's not really Yes, the CEO must focus a bit on risk. But if they spend all their time focusing on risk, they'd never get growth. I'm just curious, like the relationship between the board and the CEO, what is the healthy relationship there?

Tony Fish 6:48
Oh, that is a question which is so big, it is just enormous. I actually write an awful lot on the complex relationships and board. And you're spot on to start to pointed out that actually, the shareholder board relationship is different to the board executive relationship, which is different to the board ecosystem relationship, which is different to the board regulated relationship, which is different to the board customer relationship. And if you look at accountability, responsibility, the only place accountability and responsibilities it often isn't where you actually perceive it is. Because actually, between shareholders and response and board, there isn't a joint way of relationship for accountability and responsibility, neither to the executive team. And unless you start to understand how you as an individual play in those relationships, it's tremendously difficult to start to unpack what you're talking about. And so many people don't understand risk. And one, one thing will come to probably in the story as well. And why I focus so heavily on it, boards cannot grasp, in so many instances, that data produces new risk. And this isn't data going, Oh, look, we could have a leak, we can have a hack that's that's well understood risk. This is data gives you insights that you don't like, because you want to bury it, because you want to hide it. And suddenly you've got new exposed risks, which are real and in your face, which you can't hide from, but boards don't know how to deal with it. And they don't, quite often they want to question the data to actually preserve their own opinion, to avoid taking the risk. And so how do you get these stories up into the conversation, that the data itself is highlighting risks that you have kind of like wanting to ignore, and actually you no longer can?

Andrew Stotz 8:47
fascinating, fascinating and, and just, um, one other thing is for those listeners out there that are board members, or aspire to be board members, or you know, are involved with boards, what would be your advice about how to be a good board member?

Tony Fish 9:07
This may sound incredibly contrary, every piece of advice you will get from anybody. Way too many people perceive the board is the reward at the end of your working career. So you work your way up the structure, you get to being a CEO from CEO, you go onto the board, and then you remain on board and you become this portfolio board person. The issue with that as a fundamental principle is that you've operated a business, which is great, and you can fulfill one of the obligations of governance, which is is the person who's got their hand on the tiller? And is the vessel I mean fit for purpose. What those roles don't give us all corporate careers is Have I got the right purpose, and is the Northstar the right place and am I heading in the right direction. Secondly, can I be a better ancestor, which is management of risk. And therefore most people turn up at boards with this great operating experience, which is so narrow, they're unable to do what a board. So being on a board, actually, you need to be a philosopher, you need to be an anthropologist, you need to be a psychologist, you need to, you need every skill, which corporates don't give you. And we've got an abundance of people who are great strategists and great finance people. Because that's not what the board is for. And it is not a reward structure. So if you want to perceive you want to be on a board, go do something else for all of your life, because you will be a much more valuable board member, you want to get to the top of the tree, aim to be the chief exec, but do not assume that will make you a good board member, the skills you need for a board are completely different to those to get to the loneliest job in the world, which is the CEOs job.

Andrew Stotz 11:00
I'm just picturing a CEO starting at the bottom of a ship shoveling coal into the engine and the ships cranking and everybody's working hard. And this CEO is great at organizing all these people to crank this ship and move it. And I'm picturing the board member at the top of the ship kind of looking 360 what are all the opportunities and threats and you know, it's a totally different situation compared to cranking it out down in the coal room where they're cranking the coal and keeping that engine going, you know.

Tony Fish 11:31
And I'll use the analogy one further, which is, then what you've got is defeat the people on the ship is somebody casting the net over the back and dragging it along the coral reefs as a as a ground. And therefore what you're doing is burning the earth behind you, because there's no food for the next person in the next ship. Because what we've done is defeat our ship, which was really, really cheap and easy and look like zero risk to us actually has wrist every other generation. And that person, they got to have 360 and look back and go, Why is there no ships behind us? We don't we look forward to the North Star forgetting that actually, we burnt the earth behind us and hence more risks that are coming to the fore right now, which we have to address and deal with. And these are the issues that lots of Chief Executives don't want to deal with, because they don't believe it's part of their remit, they get to the board, and they suddenly realize, Oh, this is a it's a lot different to how I thought it was going to be.

Andrew Stotz 12:28
Hmm. It's another thing I think about when I first moved to Thailand almost 30 years ago, I remember going up country and I saw a farmer, throw away a piece of, you know, a wrapper, a plastic wrapper or something like that in his field. And I had seen people throwing away stuff, you know, on the streets in Bangkok. And I just realized, like, for the average farmer or the average person that's living in an isolated environment, throwing one little thing away, doesn't have a lot of impact. But when all of those people converge into a city or into a business or whatever, and then all of a sudden you have everybody doing that. Now you've got a whole new challenge for society.

Tony Fish 13:09
Yep. Hmm. Well, we got an interesting dilemmas ahead.

Andrew Stotz 13:13
Exactly. Well, now, it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking will be tell us a bit about the circumstances leading up to it. And then tell us your story.

Tony Fish 13:25
We'll do Andrew. And first of all, I'm going to say thank you for the invite, which is and what it's actually done is open my eyes up to your own podcast, which I completely unaware of. And I've listened to a load of the stories and I've absolutely loved them. So if again, if anyone is really listening to this, go back and listen to some of the other stuff. They're absolutely amazing. And you are as a host. Fantastic. So thank you, thank you very much. Everything I see now is going to sound quite generic. And I'm not going to use names. And I'm not going to identify companies. Because this particular story is quite different and quite difficult. Compared to a number of the other ones that you've you've seen. I learned a lot in this experience. And I'll come at the end to say what I continue to hold from from that experience. And The joy of listening to your your your back catalogue was so many of your speakers reflect on exactly the same, the worst and the toughest times you learn the most. And there is no doubt that actually you go into your worst investment to learn more. So actually, if you say do you want to learn more, go make a stack of bad investments because you're going to learn really, really, really quickly. Not probably the best psychology but there you go. So the story starts by we had a really simple concept, really, really simple idea which was to deliver a product to 3 million captive market in the UK market. Those customers already had fairly much adopted the product Service, but they were particularly price sensitive. And therefore, all of the existing players because of their large infrastructures could not really offer the price with the performance to this market in a way that they wouldn't. They wouldn't carry on being incredibly loyal. So if you started from scratch with a wholly different philosophy and different economics, you could get price efficiency, day one. And that's what we set off to do. With the recognition, there was a there was a market. We wanted to create something which was highly efficient, highly effective, and built from the ground up, we identified a power player. And what I meant by a power player was, it was a company had access to our market. And not only did they have access, they had utter control over the digital channels to this market. And what we did is we we basically did a cross shareholding with them to get a deal, which gave us not exclusive because they couldn't do exclusive deals. And we didn't want exclusive deals, but we gave access to that market. In terms you could not get in other any other way, which was which was very clever. And then via a few calls. To a number of key players, we were able to get a superior product with a subscription model, which we could now offer to this captive audience. We raise series A, which was just short of 10 million pounds, which was then really to cash flow growth. So the from the concept to actually getting series A up and running was about four months. Okay? Because we knew what we were doing. Yeah, we'd all come from experience. And when you looked at what we were going to do, it was pretty flippin obvious it was going to work. So why would you not get the backing because the customers already knew the product. So we were basically, you know, swapping existing customers from one platform to another platform with a with a much better cost advantage. As usual, in this period, it was chaos. It was mayhem, it was incredibly great fun. We had a great team, we made a load of mistakes on the way, one of them was ordering 200,000 boxes for our product, which turned out to be, unfortunately slightly the wrong size. And somebody made a spelling mistake. But you know, and you know, they're probably still sitting in a warehouse somewhere. It was classic, you know, so much energy, so much focus and dynamics. And you do a few interesting things. The branding we created was so beautiful. It was so simple. It was clean, it was elegant, the market, absolutely loved the branding.

And basically, the growth was better than plan. So within as soon as we got to market and launched, we were almost had a plan from day one. Now that's just, you know, stupid. It was it was this is not not not right. All the normal scale issues were with us. But we had a great team and we had great tech, and we just work through the day on day on day and day, you just sweat through all of the processes and problems. So that was no particular issue. The deal we kept with the supplier for the product and subscription was favorable to supplier because basically we didn't have proof of number of volumes. And they knew we would come back at some point. By this point, we now had a significant customer base with scale past six figure subscribers in less than six months. And each of the subscribers was roughly paying about 20 pounds per month, give or take a bit. And we you know, after just less than the than the six month period, we were just past 5 million a month in income. And this was on the standings nine nine months earlier. We needed to raise more capital to basically cashflow the business. We knew we had to therefore go back to the supplier and get better terms before we were going to get more capital. Because the terms we had would not go to large scale. And therefore we needed to renegotiate at the point we've committed now about 20 million in debt and equity. The energy was was super high the thinking was turning to actually the major supplier would look to buy the business themselves because basically we were now already in a six month period the go to place for this particular market. We weren't taking customers away from them. We were actually building a substantial new customer base which actually with their new platform, they would be able to offer something they hadn't done before. So it was a pretty obvious strategic exit. So what we did is we set up a meeting with them and we went down to see them. And there was a few of us. So I went as chair of the board. And we took one of the other major shareholders who pointed up a lot of funding, who also knew the industry very well and the CEO, and the three of us went down to hold a session with the supplier to basically renegotiate terms. Just the cover of some of the team, we found the CFO on a recommendation, because the supplier wanted the CFO to come from the industry. And so they'd made a number of recommendations which we willingly accepted, because they actually knew the person anyway, the CEO was a mate of the CEO. And they've worked together before. And fairly much as the board we knew each other and a number of the shareholders we all knew, because they can't like we've all been in different deals in various terms. So we went into this meeting with our expectation as there's two fold on the agenda, the first one better deal, because that's going to work and here's our numbers, off we go. Second one is, let's open up the conversation. Why not become either a strategic funder, or look at putting in an option that you'd like to take the business out when we pass a certain number? My investment fleeces, so the number of these stories have come together, and we'll get to the meeting in a minute. So the my investment philosophy has, at that point, emerged over best part of 15 years now, best part of 30 years. And number one was team team team. And that was, you know, the old adage, and that's what you do. And you find recommended leaders, and you find those recommended leaders who can deliver you, there's a, there's a basis that you collect, and oh, they're gonna deliver, okay, and you verify that they can deliver, therefore, trust builds, they come to you with a plan, you provide delegated authority for them to deliver the plan. And you basically use verify that they're doing the right thing through diligence through questions and cross checking. And I pride myself on not assuming anything, and therefore always opening question and always remaining incredibly open minded. So here we are, was going into this room, which is a, which is their main boardroom. And it's a big boardroom. And we're full of hope. And, you know, and, and believing the power has shifted from them to us, because we've now got stack load of data to show that, you know, we got real customers. So it's now in our favor, we got the proof. We're in the room. The only way I can describe what happens next is the Arctic sea in winter was probably warmer than the reception we got. And it was just a stone wall of silence after one question. Okay, so there's a few formalities, they asked this one question.

How many verified customers have you got? So ca goes through the numbers, and went through the numbers. And they just turn around said, Nita. And hence, the Arctic seas level was like, above our heads, because we're sitting there going, what the hell. So we both present facts and figures. And we spent a bit of time trying to trying to thought for the the, the iceberg that's just thrown into the room. And it's a it's completely obvious, it is so obvious to a high school student, that the gap between the data we have, and the data they have is enormous. And we're sitting there going, what the hell have How can there be such a gap between the two perceptions? and effectively what happened next is the unraveling back to you the title of your own podcast, the worst investment ever. So over the next three days, we find out the CEO has been lying, and not

Andrew Stotz 23:52
like your your company or

Tony Fish 23:55
that Okay, got it. The lack of money has been lying and lying to the board. And not only lying has been utterly fabricating the numbers. I did completely made up numbers. And not only that we had a massive fraud issue. And all of it was hidden. The CEO was also bout to jump ship and had found another job. The CFO was having a relationship that the CEO was using to control them, and force them to hide figures. The CEO was actually a mate, as we said, but had a completely hidden past. And that hidden cost was not good, and was not qualified to be doing the role. The senior team the resistente absolutely lived in fear. And I mean, deep, deep fear to the level you don't want to know fear. And the board was completely misled with data facts, figures, and it was complete madness. We didn't have 200,000 wrong boxes of the wrong size with the wrong spelling mistake. We had utter fraud, there was no 200,000 boxes, they it was just how to lose money. We didn't need more outsourced it, which had been funding because basically they were just siphoning off funds. And the systems that we believe were in place and working actually turned out to be a user interface, and a user experience and cause to a database, which were completely fabricated. Yeah. And the joy of this is, I can see Andrew on video and he can look back at me, you've only got voice, and his dog and his guy is advanced, he has put his hands in his head and game Oh, goodness. Goodness be. So what did I learn? I learned if somebody wants to lie, man, and they want to create sophisticated fraud, it is incredibly difficult as a director to get close enough to see the truth. Hmm. It is so difficult, you can ask all the right questions, you can take the data from the system, which is what we were doing. But if that is utterly fabricated, how do you know that the data in the system is complicated? You know, what is the what's the feedback mechanism? And you would expect, you know, whistleblower staff and everything else. Remember, this is all happening in lightning quick speed. You know, this is this is not years and years and years, this is months of this all turning round. So it's kind of why I specialized and focused hugely on the governance issue, since because we thought we were doing governance. And I was really naive, because actually, what we were doing was trying to use reporting reports, CEO reports, CFO reports, and compliance. And all of that stuff is just not sufficient to know if what is actually being presented to you is complete fabrication. And there's you need a whole different makeup of the way boards work and governance.

And those board papers, just pretty useless unless you can actually determine the provenance and lineage of the data itself. Hmm. The next piece of learning was, and this one always surprises me that I didn't realize that the limited liability is the company has limited liability and shareholders have limited liability. Directors as a director, you are 100% liable. There's no escaping. So as directors, we were liable. There was nobody else in line. Apart from the directors. Yes, you can have DNO insurance and everything else. But DNO insurance is all about are you capable Cobra? And when there becomes lies and fraud over a period of time, there's a serious question, will you therefore capable. So it's a whole different bundle of things that people suddenly start to wake up to is, the reality of sitting on the board of a company is not a kind of where we went earlier, a nice little end of life career, it's actually a serious role, which has serious implications. And DNO insurance only covers a certain number of things, which actually, you don't really need it for, because you're probably going to do a good enough job to make sure they happen. I learned most definitely that most people have this idea about structures and boards and reporting. And honestly, it's made up wishful thinking. And they have this perception of what they're going to do and have a glass of wine and a cigar and chat around and have a nice meal. And it just is. That's not, that's not the reality. I learned, therefore, to how to look for signs. And this is an emotional maturity piece, which so often doesn't get built into people as they go through structures. So emotional maturity of control, bribery, corruption, and manipulation. And you need completely different sets of ears and eyes and noses and fingers and everything to start to understand what that looks like. And where nervousness is not nervousness, which is very different, and how people how people can actually go to acting school, to learn to act, and you want actors. Because when you're selling something you want that act, but actually when the act is being used internally on you, and you can't determine it, it's a whole different ballgame. I'm I'm not a person who's who's risk adverse from all this experience even put, I do now have a highest emotional sense. And I'm not more judgment or judgmental, controlling because of the experience. But I do seek diversity of reporting. At one of those questions, I go back I I beat myself up on it. Why did when we wrote the contract to the supplier. It was a one way street. They wanted information from us. But we never asked for reports which says can you confirm back to us the numbers of the same reason and actually would ask for that. None of this probably would have happened. And it's it's so many times I've heard these on your stories. If you're done one thing You know, it would have been different. And that piece of learning always asked you that question of, what should I be asking from a third party to make sure that actually I have a much fuller picture, your sense of the environment and what's going on. I really don't believe reports from systems anymore. And less, I can actually really get to grips with the systems and actually get to the detail. And my engineering path does come in really handy at some points to be able to did pass, and just see that some things are just the user interface. And spreadsheets on the side are a complete travesty. I now look at people and I ask them face to face and I say, Are you lying? Because great question. And it's amazing how people actually don't expect that question. And they change the squirm. And they squirm. And one of the interesting ones is actually, you know, we're here we are in COVID-19. And we've all moved to video and zoom and everything else. And I really worried that in zoom, and in digital world, we don't have that sense of chemistry with the person we're asking. I can't see if they're sweating. Yeah, I can't see if they're uneven. And some of the real telltale signs you get of sitting in a room with somebody who's like, we've lost. And what we're does worry me enormously is you have no idea how to check what is being fabricated and told you. So hence the reason I don't name the companies or any of the individuals, it was a yes, the worst investment ever. Because reality is we would like to,

Andrew Stotz 31:37
well, it sounds like worst investment ever. Yet it set you on a path for the rest of your life investigating thinking about and, you know, I mean, it just seems like it shaped who you are today. So that's pretty fascinating. I mean, there's a few things I take away from it. The first one is, ladies and gentlemen, if you want to be involved in a company, be an advisor, not a board member. Because a board member, I know in Thailand here, a few years ago, the government tightened up the regulations. And so as a board member, if you if there's fraud going inside going on inside the company, and you can't prove that you did some efforts to try to detect it, then there's nothing, you know, you are liable. And so yeah, there is a lot more risk for a board member these days. The other thing that's interesting, and it reminds me as an analyst, valuing companies around the world, all my career, one of the toughest things that you got, as an analyst is that you know, you, you'd say, this company is great, and I've got a buy recommendation, I've met the management, I've seen the company, and then some news comes out, some rumors come out. And it's really hard as an analyst to know, is this real? Is someone just bad mouthing them? Is this you know, something's just gonna pass or is this real fraud. And as an analyst, that is probably one of the toughest things because it's hard to abandon your baby that you think these guys are great and whatever. And it's one of the reasons why I do something called uncovered Asia where I talk about companies that aren't covered by by investment banks in the like in Asia. And I like to just publish that on my LinkedIn and my Facebook and then see, and I get fantastic feedback by from people about, you know, oh, wait a minute, this company, somebody attached a video, that was like 10 years old, five years old, of a company, CEO, or CFO kicking an analyst out of a company meeting, and they attach the video that they had kept for five years after having watched witnessed this. And I was like, wow, that's the power of crowdsourcing. And I think the main, the main takeaway from that is that, and this kind of goes back to that idea of being on top of a ship and looking 360 degrees, a board member, really, the value is going to come from, you know, picking up stuff outside of the organization. And that brings me to one other thing that I just tell a quick story about how my business partner and I, when we set up coffee works, you know, we we passion, passion for quality, passion for great coffee. And, you know, we never had customer complaints. And in the rare case that we did we immediately switch out any product. But we were just, you know, Dale in particular, was a great roaster, and he just understood what the customer needed. And then we got a customer that said, we're going to do a, quote, a quality audit of your business. And we thought, well, that's no problem. And then what we found out is he said, No, you after they did their quality audit, they said, well, in fact, you fail. And we're like, what, and then what we learned was that, you know, in the world of is oh and the world of all of this structure. They said look, you don't have the paperwork in place, you don't have the the documentation in place. And we learned that, you know, documentation and paperwork for them was a key part of quality. It wasn't about you know, that taste in the cup. It was about did you do all the paperwork. And so, you know, we we had to adopt that paperwork and we See, there's some value in it. But I'd much rather be a company where the owners value quality, and then have to add some paperwork into it, compared to a company that they don't really care about quality. And, and they built it all around paperwork. And it just reminds me that, you know, there's all kinds of companies out there that have ISO and all these certifications and verifications, but the truth is, is that you can have all of that and still have bad quality fraud or whatever else. So it's something that just reminds me that, you know, something you said, Is that a good liar? Liar, or fraudster can can can do it ultimately, I mean, you cannot avoid the fact that there are some people that are going to create an elaborate structure to lie, cheat, steal, or produce bad quality. Those are the things I take away anything you would add to that. Um, yeah.

Tony Fish 35:55
I don't want to add to I think it's just a different piece of thinking, because I think what you said was superb. And it goes back to a question you asked earlier, which is the relationship between the board of directors, because the board of directors, and the shareholders and the executive team and others, and it's that issue that the directors are accountable and responsible to the shareholders. But the shareholders have a dependency, there's no actual contract relationship, there's dependency on those directors doing their jobs. And isn't there's no enforcement, because that's the limited liability piece, the directors to the executive team. Now, obviously, some directors are the executive team in some instances, but the directors have a dependency on the executive team, where the executive team are accountable to the directors. And then you go to the customers piece, which is where the customers themselves have an absolute dependency on the board doing the right thing I quality, yet, there's a responsibility in law, that you don't kill your customers. And I totally agree, this is where this this crazy relationship between rules and purpose really comes to the fore, that too many people focus on the rules, and therefore the compliance to the rules. I, let's make sure I don't kill my customers. But forget, the dependence I have is actually I need to make the best coffee. And because so many boards don't understand these relationships. And then you add in the ecosystem and the regulator. There's a whole series of complex fluid relationships, which keep changing. And too many boards think there's stability in those relationships. And it's part of your role is to understand where those relationships are today, where they've gone and where they're going to. And we don't spend enough time on that we spend way too much time ticking the box going, yes. CFOs reports. Okay, CEO reports. Good. Oh, we've got all our compliance in place. Let's go Miss like that. That's Yeah, that's a that's a deep problem, huh?

Andrew Stotz 38:05
So based upon on what you learned from this story, and what you continue to learn, what one action would you recommend our listeners take to avoid suffering the same fate?

Tony Fish 38:15
Oh, I don't know that. I don't think there is one. I wish there was an I would mark it up and I'd write a book on it and make a fortune. I think the bigger issue right now, which I would draw to anyone's attention is that if we're using video, as part of our board meeting processes, which I don't know anybody who's not? How do you know? And this is the it's such a serious question that most people don't want to even consider it. And because you don't consider it, I totally agree what Singapore's done. You actually, under any duty of care are now liable. So you've got to find additional ways to know that what you're being told is a truth. And that is actually tremendously difficult, because we're able now remote, and therefore, actually, it's, I have to say it, but it's a field day for liars and manipulators.

Andrew Stotz 39:10
Hmm. Well, all right. Last question. What's your number one goal for the next 12 months?

Tony Fish 39:17
I'm working on a piece.

Which is, which is how do we do board meetings in 2025. And this is central to the piece of thinking that if we are going to go for as a digital, which would fairly much I'm pretty convinced we are going to how do we solve that problem? And that's where I'm both thinking, I'm playing with technologies. I'm looking at all sorts of very clever monitoring things that we can put on people and people might not like it, but just imagine we put a blood oxygen level on you. We put heart rate we put breathing, and actually they're monitored during the board meeting as vital signs and people but that's just like we're not going yet but when you're asked is on the And you're liable. And you have that mechanism available and you haven't used it. And you're standing in front of the judge, may you have no defense. So there is a interesting quandary. Now, do we dump the data straight after the meeting? Do we send it off for analysis? How? So there's a whole new piece that's coming to the fore, which we've got to start thinking about and engaging with.

Andrew Stotz 40:24
And that's, you know, totally fascinating. And I think the, you know, the idea is that the human line in, in human interaction is pretty good at detecting things. But when you start putting layers of distance, the human mind just isn't familiar with that. I mean, I always often think when I walk around, and I see everybody's got a face mask and think about, you know, how does this impact society? How does this impact the connectedness that you feel between people around you, when you cannot see them smile? You know, you can see their eyes, but that the smile is a real signal in society, whether that's an animal society, or whether that is a human society? And how does that impact and I also think, man, I'd hate to be a young guy trying to meet women, when all of our faces are under are covered up, because all the social cues are just all messed up. So

Tony Fish 41:22
and that has to go for any relationship between any two humans. You know, it's, it's not just male, human, male, female, his male male, lady lady. And the reality is this that, if I don't want to show you my eyes, actually, I can downgrade my video quality quite easily on a click. So when go to zoom, I go up to the top corner, and I go take it off HD and go to an HD, I can limit my bandwidth, right, which means zoom will automatically down and all you end up with is blockiness. Mm hmm. So you know, who's using waters technologies to actually or and you've seen this already? Oh, I live in a remote village. Yeah. And my bandwidth is really poor. And I'm sorry, I've got to come up video. I can only use audio. Now, everyone goes on, it's fine. I'm sitting there going? Is that a red light? Hmm. Should I know more? Actually, how do I get broadband to that person to make sure Actually, I really can see them. Now. How do I know they're not sweating when and I know it sounds really sad. But we had it. When we had togetherness in a boardroom. We were all connected. We had a belonging. Now we've lost. As you said, those layers of distance have killed belonging, connectedness and togetherness.

Andrew Stotz 42:39
Well, and we're making the most of it with this podcast. So listeners, there you have it, another story of loss to keep you winning to find more stories like this previous episodes and resources to help you reduce your risk visit my worst investment ever.com. As we end, Tony, I want to thank you again for coming on the show. I want to congratulate you for being one of the brave ones. I say brave ones, because when I asked most people they say no, Andrew, I'd prefer to talk about my winners. So congratulations, you've now turned your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Tony Fish 43:14
None. I just keep listening exactly what Henry says keep listening to the rest of his backlog. Just genius. Love them. Thank you, Andrew.

Andrew Stotz 43:22
You're very welcome. And yes, the backlog of all kinds of the catalogue of people that have talked about different things, so many things that I've learned and that you can learn and that's a wrap on another great story to help us create, grow and most importantly, protect our well fellow risk takers. This is Andrew Stotz, your worst podcast host saying I'll see you on the upside.


Connect with Tony Fish

Andrew’s books

Andrew’s online programs

Connect with Andrew Stotz:


About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

Leave a Comment