{"id":5567,"date":"2024-04-11T10:00:28","date_gmt":"2024-04-11T17:00:28","guid":{"rendered":"https:\/\/berkonomics.com\/?p=5567"},"modified":"2024-03-28T10:44:33","modified_gmt":"2024-03-28T17:44:33","slug":"fight-for-balance-on-your-board-2","status":"publish","type":"post","link":"https:\/\/berkonomics.com\/?p=5567","title":{"rendered":"Fight for balance on your board!"},"content":{"rendered":"<p><strong>Picking up where we left off\u2026<\/strong><\/p>\n<p>In my last insight, I described the CEO who stacked the board with two friends, making a majority for control purposes and relegating the investor representatives to insignificance.\u00a0 There were no outside board members with industry experience, no members the CEO trusted with governance backgrounds, no scientists to evaluate the technology that is the core asset of the corporation.<\/p>\n<p><strong>A recipe for failure. <img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-5570\" src=\"https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-1-300x172.jpg\" alt=\"\" width=\"300\" height=\"172\" srcset=\"https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-1-300x172.jpg 300w, https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-1.jpg 512w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/strong><\/p>\n<p>If the CEO does not fight for balance of the board, outside board members must fight for this to protect the corporation.\u00a0 If for no other reason, this protects the members of the board from making decisions without rising to the standard of careful deliberation under the \u201creasonable care\u201d test.<\/p>\n<p><strong>How about the size of the board?<\/strong><\/p>\n<p><span style=\"color: #993300;\"><em>[Email readers, continue here&#8230;]<\/em><\/span>\u00a0 \u00a0Some board members find themselves debating whether there should be an expansion from five to seven, from seven to nine or more to allow for such a mixture of protective seats created by the investment documents and balance with outside board members.<\/p>\n<p><strong>What about multiple investor rounds?<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-5569 size-medium\" src=\"https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2-300x171.jpeg\" alt=\"\" width=\"300\" height=\"171\" srcset=\"https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2-300x171.jpeg 300w, https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2-1024x585.jpeg 1024w, https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2-768x439.jpeg 768w, https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2-1536x878.jpeg 1536w, https:\/\/berkonomics.com\/wp-content\/uploads\/2024\/04\/Large-board-2.jpeg 1792w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Sometimes, as in one board where I sit today, there are so many classes of investors, each with one or more seats, that a seven-person board is not enough.<\/p>\n<p><strong>I am not for large boards. <\/strong><\/p>\n<p>There are social studies that reinforce the notion that a group of six or seven is far more likely to arrive at reasoned decisions effectively than larger groups.\u00a0 Look at the example of most non-profit boards, where the number of members often exceeds thirty, requiring the creation of an executive committee to get the work done.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Picking up where we left off\u2026 In my last insight, I described the CEO who stacked the board with two friends, making a majority for control purposes and relegating the investor representatives to insignificance.\u00a0 There were no outside board members &hellip; <a href=\"https:\/\/berkonomics.com\/?p=5567\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-5567","post","type-post","status-publish","format-standard","hentry","category-depending-upon-others","category-protecting-the-business"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/5567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5567"}],"version-history":[{"count":0,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/5567\/revisions"}],"wp:attachment":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}