Kali didn't go on to the advisory board on behalf of Netflix - that would be perfectly rational. Instead, the startup had to do 2 deals: One with Kali directly

Kali didn't go on to the advisory board on behalf of Netflix - that would be perfectly rational. Instead, the startup had to do 2 deals: One with Kali directly for "advice", and then a second with Netflix that Kali, in his capacity as a VP there, would sign. Besides being unethical; this is now a clear conflict of interest. Netflix (and shareholders of Netflix by extension) may have signed up for a crappy product from the startup only because startup had a side deal with Kali.