Thirteen years on the board of QLogic Corp. has taught George Wells a thing or two about management style.
“The key thing for me as a director is to keep informed,” he said. “It’s not about being friends with the CEO, or even worrying about the employees. It’s all about making sure the shareholders are getting a fair shake.”
Wells joined QLogic’s board back in 1994, right after the Aliso Viejo data storage networking products company spun off from Costa Mesa’s Emulex Corp., now a QLogic rival in one area.
QLogic makes controller chips, host bus adapters and fabric switches for data storage networks.
It supplies gear to companies such as Cisco Systems Inc., Dell Inc., EMC Corp. and Hitachi Data Systems Corp., the Santa Clara unit of Tokyo’s Hitachi Ltd.
Wells is QLogic’s lead director and holds about 19,000 shares. His shares had a market value of about $330,000 at recent check (before the cost of exercising options).
He has served on the board of 21 companies during his career in the electronics industry.
It’s a job that’s changed considerably with the rise of corporate accounting and ethics scandals, he said.
The scandals smeared an entire echelon of corporate managers, according to Wells.
“All this backdating options is horrible,” he said. “It’s a handful of guys ruining it for the rest of us and giving CEOs such a bad name.”
The spillover from the scandals has made sitting on a board a much more serious task, he said.
“It used to be that boards were formed from the people that you know,” Wells said. “Today, it has become more a question of what the needs of the CEO are in terms of board content.”
Compliance with government regulation has changed the dynamic, too, he said.
“The board job has become a lot more difficult in recent years because of Sarbanes-Oxley,” Wells said.
But the accounting reform was needed, he said: “There is no question that some management people have taken advantage of the companies and have absolutely ripped shareholders off.”
About two years ago, Wells teamed up with ghostwriter Nancy Padberg to write a memoir on his life and career.
The recently published book recounts Wells’ early years in Clydebank, Scotland, a tiny manufacturing and shipbuilding town outside Glasgow.
The Wells’ lost their home and were forced to flee when the Nazis bombed the town, he said.
He later got a degree in physics from the University of Glasgow and did postgraduate work in nuclear physics.
He came to the U.S. in 1960,you guessed it, with $200 in his pocket.
He ended up at Fairchild Camera and Instrument Corp. in 1969, which became Fairchild Semiconductor International Inc. of South Portland, Maine. (Fairchild actually was a rebellious offshoot of Fullerton’s Beckman Instruments Inc., now Beckman Coulter Corp.)
After Fairchild, Wells joined General Electric Co. as chief executive of its Intersil Inc. subsidiary, now an independent company based in Milpitas, where it moved from Irvine earlier this decade.
Wells then moved into the upper ranks of a handful of circuit board makers, including Exar Corp. and LSI Corp.
He retired from management in 1996 and plays golf near his home in Saratoga a few times a week.
A soccer fanatic, Wells at one time was part owner of the San Jose Earthquakes in the North American Soccer League. He was also a founder of the San Jose Classic, an all-women’s golf event.
The 71-year-old heads up QLogic’s compensation committee.
Wells’ biggest contribution to QLogic was to introduce a practice of strategic planning and accountability, he said.
“It’s up to the board to keep checking in on management to make sure they are following the plan,” Wells said. “Other companies create a plan and then put it up on a shelf. For us, it’s a living document. QLogic reviews their strategies every week and it has served them in very good stead.”
He’s seen QLogic grow to $2.8 billion in recent market value and $500 million in yearly sales. QLogic has about 470 local workers, with expansion in the works.
Wells’ book, “The American Dream in a Kilt: CEO Shares Secrets on Leadership, Life & Laughter,” is about his early business lessons, company leadership and family life.
His best little gems:
n “Have a sense of humor. At Fairchild, I made a bet with my boss. I got $20 to show up to work in a kilt. They loved it.”
n “Listen to your employees. God gave you two ears, and one mouth. Doesn’t that tell you something?”
Wells says he still doesn’t know how a small-town boy from Scotland got to help lead big American companies.
“There was something about my style that made my managers believe that I could manage other people,” Wells said. “I never in my life never asked for a job or asked for a raise. The book was a therapeutic exercise he said he undertook after his wife died.
He also wrote it for his grown children Caroline, 47, George, 46, and Neil, 32. n
