After the conviction of media tycoon Conrad Black, it is worth recalling that it was investors who first questioned "non-compete" payments received by Black and other Hollinger International executives. His case can also be seen as a cautionary tale about what can happen to CEOs who fail to respond to shareholder concerns.

On July 13, a federal court jury in Chicago found Black guilty of obstruction of justice and three fraud charges. Prosecutors accused Black and three other officers of using non-compete agreements to illegally pocket millions of dollars from buyers of Hollinger newspapers from 1998 to 2001. Prosecutors claimed the payments were a "money grab" and said the funds should have gone to Hollinger shareholders.

The former Hollinger CEO and chairman faces up to 20 years when he is sentenced in November, but his lawyers plan to file an appeal. Black, who bought his first newspaper in 1969, rose to become one of Canada's most prominent businessmen and was named a British lord. At its peak, Hollinger was the world's third-largest publisher of English-language newspapers; its holdings included the Chicago Sun-Times, Canada's National Post, and the Jerusalem Post. The company is now known as the Sun-Times Media Group.

Black was acquitted of racketeering, tax fraud, and five other fraud charges, including those based on prosecutors' claims that he defrauded investors by taking the corporate jet to Bora Bora for a family vacation and using Hollinger funds to renovate his home on New York's Park Avenue.

During Black's trial, prosecutors presented various recordings and e-mails that shed light on how he dealt with Hollinger's investors and directors.

Black's troubles began when investment manager Tweedy, Browne Co. raised concerns about the non-compete payments before Hollinger's 2002 annual meeting. At trial, prosecutors presented an e-mail from Black to Paul Healy, the company's investor relations chief, in which the CEO dismissed investor concerns as part of an "epidemic of shareholder idiocy," according to Bloomberg News. "Much as I would just like to blow [investors] off, I don't want a sour atmosphere at the shareholders' meeting," Black also wrote in that e-mail.

During the trial, jurors heard a tape from the 2002 meeting, which became contentious when shareholders criticized the non-compete payments, as well as Hollinger's ownership structure and share performance. In response to a question from Omega Advisors, Black said, "You're not dealing with greed here and you're not dealing with sneakiness."

As Healy recalled at trial, Black failed to pass along the investors' complaints when he met with the board after the annual meeting and reprimanded Healy when he suggested that those concerns should be relayed to James Thompson, a former Illinois governor who served as Hollinger's audit committee chair, Bloomberg reported.

"This is my company. I'm the controlling shareholder and I'll decide what the governor needs to know and when," Black said, according to Healy.

The investors, including Cardinal Capital Management, continued to pressure Hollinger. Before the 2003 annual meeting, Black tried to appease shareholders by offering to name three new board members. However, Black wrote in an e-mail to Christopher Browne of Tweedy, Browne that the new directors would not have authority to "rummage through the past" to review Hollinger's transaction history. Browne declined Black's offer and called for an independent board investigation, Bloomberg News reported. Tweedy, Browne also demanded an investigation in a filing with the Securities and Exchange Commission.

At Hollinger's annual meeting in May 2003, Black announced he would name an independent special committee and would give up his direct control of the company. At trial, prosecutors played a tape from that meeting, where Black called corporate governance a "fad" and warned against "inadvertently throwing the baby out with the bathwater."