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The question was about what power the board has, not how a well-functioning board should operate.
by markdown 6y ago
The question was about what power the board has, not how a well-functioning board should operate.
- tomhoward 6y agoSure, technically, perhaps, but also not really? Their fiduciary duty is to act in the company's best interests, so they can't do anything that a court could find was harmful to the company, or to shareholders, including minority shareholders. So, much like in a healthy governmental system, there's a tension of power; between the board, management, shareholders, customers, the general public, and the law. So it's not really "ultimate" power. Yes "ultimate" in terms of appointing executives and setting long-term company direction. But not "ultimate" in terms of being able to, say, arbitrarily shut down a subreddit; if management didn't agree and it was not clearly in the company's best interests, it could lead to a leadership crisis and/or a fiduciary breach. Note the questioner specified: "In terms of day to day operations...". The point is that the board is expressly not meant to interfere in day-to-day operations.