Smith & Wesson's Overqualified Top Gun?

Amid countless scandals in the last year or two, investors have increasingly focused on companies' boards of directors and executives. We've questioned the forms and amounts of CEO compensation. We've examined how independent board members are and should be. We've wanted qualified people at the helm of firms in which we invest.

A recent news story, though, raises an interesting question: Can an executive be overqualified?

The Smith & Wesson Holding Corp. (AMEX: SWB  ) , with a history that goes back 150 years, specializes in guns, gun safety devices, and police accessories, among other things. With a powerful brand name, it also makes money licensing its name to appear on clothing, sunglasses, and more.

The company's recently appointed chairman of the board, James Joseph Minder, resigned a few days ago, following revelation of his gun-related stints in prison. It seems that while in college at the University of Michigan several decades ago, Minder engaged in armed robberies (at places such as grocery stores and banks) in order to pay for tuition and lavish living expenses. His robberies number at least 20, and he spent more than 10 years behind bars. He even committed additional robberies once released from prison, which resulted in two additional incarcerations.

You might expect that the company would quickly find a new chairman, which it did, naming G. Dennis Bingham to the post. You also might expect that Minder be ejected from the board, but he wasn't. Instead, he will stay, with the company explaining, "The board believes he should and can continue to provide invaluable input to Smith & Wesson within both strategic planning and the ongoing drive toward operational excellence."

The Arizona Republic notes: "The attention to Minder's case comes at a bad time for Smith & Wesson and gun manufacturers in general. The U.S. Senate is debating controversial legislation to exempt gunmakers and dealers from lawsuits involving firearms negligence. And the Securities and Exchange Commission is investigating Smith & Wesson's 2002 financial reports."

Investors interested in investing in Smith & Wesson might want to wait before pulling the trigger until more dust settles.

Learn more about how to evaluate a company's management inthis articleand thisspecial collection. And for investing ideas delivered monthly directly to you, check out our suite of Fool stock newsletters.

LongtimeFoolcontributorSelena Maranjianowns a staple gun but no shares of Smith & Wesson.

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