Mr. Bounderby is described as a physically inflated, coarsely made man. He is standing in Stone Lodge, boasting to the feeble Mrs. Gradgrind about his rags-to-riches background—he spent his youth living in a ditch, deserted by his mother, but worked his way up to his current prosperous position of manufacturer. He is a close family friend, and takes an interest in the children, particularly Louisa.
Mr. Bounderby's physical description corresponds to his internal qualities, i.e. his huge, swelling body is representative of his huge, swelling ego. His story of having lifted himself up from nothing helps justify both his ego and the state of the economic system—why have any pity for the workers if Bounderby was able to take himself from even greater poverty to his present wealth?
Mr. Gradgrind returns with Louisa and Thomas, having dragged them from the circus, and indignantly exposes the misbehavior of his children to his wife and to Bounderby. The two men discuss what ought to be done, and Bounderby, discovering that Sissy Jupe (whose father is involved in the circus) goes to the same school as Louisa, decides that they ought to go into town and confront Sissy, who he thinks is likely a bad influence on Louisa.
Mr. Bounderby's personality seems to dominate Mr. Gradgrind's, who seems to trust his friend's wisdom and is willing to do whatever Bounderby suggests. Bounderby sees anyone with any "fancy" to them as potentially dangerous.
Mr. Gradgrind and Mr. Bounderby set off for Coketown to confront the Jupes. As they leave, Mr. Bounderby plants a kiss on Louisa's cheek, who is disgusted by this show of affection from him.
The unusual interest that Mr. Bounderby shows in Louisa and the kiss that he asks of her when she leaves, as young as she is, is an indication of his interest in Louisa as a potential future wife. The strength of Louisa's repugnance in her reaction shows that she, at least, suspects that the kiss was not the innocent, disinterested kiss of a family friend, and that, as a child, she knows enough to try to avoid that which she does not love (or even like).