Commentary by David F. Larcker, James Irvin Miller Professor of Accounting & Director, Stanford GSB Corporate Governance Research Program; and Brian Tayan, Stanford GSB Case Writer, MBA ’03.
On November 27, 2009, Michael Matveishen resigned from the board of directors of DayStar Technologies. Matveishen joined the board only two months prior, following a merger agreement with EPOD Solar Canada. At the time, Matveishen had been appointed CEO and executive director of DayStar and was expected to lead the combined company. However, on October 20, 2009, the merger agreement was scuttled, and Matveishen abruptly resigned as CEO. One month later, he also stepped down from the board, explaining that,
“I have watched the board act with total disregarded of its responsibility for disclosure to the shareholders of material events. […] The Company’s executives have repeatedly given inaccurate information on the state of the company’s technology and developments in presentations to investors and the public. […] The Board has allowed a complete falsification of resolutions and of minutes of board meetings. The Board has allowed executives to completely ignore the corporate governance rules for filing accurate SEC filing and timely filings.
“As a result of the above it is with great regret that I am immediately resigning from the Board of directors of Daystar. I will be forwarding a copy of this letter to the SEC, NASDAQ and the Auditors of the company.” Matveishen was the ninth of 16 directors to resign from DayStar in the previous three months.