In good times those interests are usually aligned, but if the company becomes insolvent, the director’s duties shift to the corporation’s creditors. And sometimes what’s best for the shareholders can be to sell the company to a competitor (who may then shut down the company and fire its employees). That may not appear to management to be acting out of “loyalty to the company”.

I know that’s not going to help sell the need for a board to an entrepreneur, but I thought it was worth reminding entrepreneurs who accept private equity that the shareholders are going to expect a liquidity event someday, and the board’s job is to get it for them.