Thread

1. xnx · 1790439571 · focus · HN ↗

   Fireship pointed out that the board members gave themselves a generous severance package in the very brief interim, so that was very possibly the whole plan.

   1. tptacek · 1790441715 · focus · HN ↗

      Yeah, if Mullenweg really did control a majority of the voting shares, the previous board are the villains in this story no matter what you think of Mullenweg.

      1. EA-3167 · 1790442890 · focus · HN ↗

         If they can see that Mullenweg has lost it completely and beyond their ability to influence, and they also know that he’s a tyrant who would happily screw them, this seems like a fairly rational exit.

         Obviously that may not be the case, but when the captain is steering the ship into rocks over and over the crew is going to take what they can and hit the lifeboats.

         Ed sp

         1. tptacek · 1790443143 · focus · HN ↗

            No, if the board doesn't believe it can continue to serve the company and meet its fiduciary duty, its obligation is to resign. CEO is an operational role; the board by design is not. It's a very big deal to "fire" the CEO, and doing so when you don't actually have the voting authority to follow through seems pretty close to malfeasance.

            1. Analemma_ · 1790443431 · focus · HN ↗

               I mean it sounds like “board which does not actually have the legal ability to fire the CEO” is a fundamentally defective concept and shouldn’t be allowed to exist in the first place. But once it does and you are in that situation, I think you are obligated to make the best attempt you can at your nominal duties. I have no idea where you’re getting “malfeasance” from at this attempt.

               1. ragall · 1790451008 · focus · HN ↗

                  The board does have the legal ability to fire the CEO, provided that it passes a very bar, such as being able to prove mental unfitness, etc... which wasn't the case here.

                  On the other hand, if you're arguing that a board should be able to fire the CEO without cause and have him barred for eternity, then you're arguing that majority shareholders shouldn't be allowed to serve as CEO - in a private company !! - which has been the basis of capitalism for ever. It would destroy the economy as we know it.

                  1. 3eb7988a1663 · 1790452154 · focus · HN ↗

                     That's news to me. One of the few real powers of the board is to fire the CEO. You don't need to put the CEO on a PIP first. If the board thinks the CEO could do better, that is all that it takes.

                     1. ragall · 1790452295 · focus · HN ↗

                        The board represents the will of the shareholders. When the CEO is also the majority shareholder with 84% of the voting power, the board better have a damn good reason, otherwise the majority shareholder can simply dissolve the board and appoint a new one, which he did.

                        1. EA-3167 · 1790453477 · focus · HN ↗

                           They represent the shareholders (all of them), but are also expected to act as a reasonable person would for the good of the company. They’re expected to use good judgement, uphold the law and a bunch of other issues. “The majority shareholder says jump off a cliff and we must obey” is nonsense.

                           1. ragall · 1790453773 · focus · HN ↗

                              > but are also expected to act as a reasonable person would for the good of the company

                              It's the people they represent, i.e. the shareholders, who get to decide what's the good of the company, and the board is simply meant to enact those wishes. This is a constitutional issue of representation: at what point do the elected representatives decide the current situation calls for a referendum instead of an ordinary (representative) vote ?

                              > The majority shareholder says jump off a cliff and we must obey” is nonsense

                              If the majority shareholder decides that, then 1) the board must resign at once and 2) any one minority shareholder must sue and have the Delaware Court of Chancery determine that the majority shareholder has abused his powers. I'm not sure what would follow that court decision.

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