4 ms·

The same can be said of Travis if not more yet he is out. So why should the board remain?

by throw2016 9y ago

kgwgk 9y ago
Because the shareholders have not decided otherwise.
- kgwgk 9y ago
  I don't usually argue with downvotes, but I'm going to make an exception. The board decided that a change of CEO was requiered. Who has the power to decide a change in the board is required? HN commenters?
  - calbear81 9y ago
    The shareholders who in this case are represented by the board members. In a public company, an activist investor can bring the votes and force a change in the board. Similarly, a majority investor could technically sway board members to vote out another member (as long as it's allowed in the bylaws)
    - kgwgk 9y ago
      That was exactly my point. This piece by Matt Levine is relevant (https://www.bloomberg.com/view/articles/2017-04-24/board-votes-and-performance-reviews https://www.bloomberg.com/view/articles/2017-04-24/board-vot...): "On the other hand, you know, the buck has to stop somewhere. But where? The CEO is an obvious answer, and he is gone, but the buck is still moving. It might get the board. What's next? Should the shareholders fire themselves, for failing to catch the problem in time? There is a traditional model in which the board of directors represents the shareholders: When management messes up, the board gets angry on behalf of the shareholders; their dudgeon becomes its dudgeon. The modern model is increasingly that the board is identified with management: When management messes up, the shareholders get angry at the board; their dudgeon turns against the board. The modern model might be more accurate in describing the relationship between many boards and managements. But you want a balance between dudgeon and continuity. If the managers mess up and the board gets rid of them, it can demand that the new managers fix the problem, and hold them accountable for doing it. But if you get rid of the board too, then who stays around to make sure the problem gets fixed?"

The same can be said of Travis if not more yet he is out. So why should the board remain?

kgwgk 9y ago

Because the shareholders have not decided otherwise.

kgwgk 9y ago
I don't usually argue with downvotes, but I'm going to make an exception. The board decided that a change of CEO was requiered. Who has the power to decide a change in the board is required? HN commenters?
- calbear81 9y ago
  The shareholders who in this case are represented by the board members. In a public company, an activist investor can bring the votes and force a change in the board. Similarly, a majority investor could technically sway board members to vote out another member (as long as it's allowed in the bylaws)
  - kgwgk 9y ago
    That was exactly my point. This piece by Matt Levine is relevant (https://www.bloomberg.com/view/articles/2017-04-24/board-votes-and-performance-reviews https://www.bloomberg.com/view/articles/2017-04-24/board-vot...): "On the other hand, you know, the buck has to stop somewhere. But where? The CEO is an obvious answer, and he is gone, but the buck is still moving. It might get the board. What's next? Should the shareholders fire themselves, for failing to catch the problem in time? There is a traditional model in which the board of directors represents the shareholders: When management messes up, the board gets angry on behalf of the shareholders; their dudgeon becomes its dudgeon. The modern model is increasingly that the board is identified with management: When management messes up, the shareholders get angry at the board; their dudgeon turns against the board. The modern model might be more accurate in describing the relationship between many boards and managements. But you want a balance between dudgeon and continuity. If the managers mess up and the board gets rid of them, it can demand that the new managers fix the problem, and hold them accountable for doing it. But if you get rid of the board too, then who stays around to make sure the problem gets fixed?"