3 ms·

Just as it's hard to tell if someone's a good coder without yourself being a good coder, it's hard to tell if an attorney or financial expert is giving you good

by bfe 13y ago

Just as it's hard to tell if someone's a good coder without yourself being a good coder, it's hard to tell if an attorney or financial expert is giving you good advice without seeking for yourself a basic understanding of the legal or financial issues. A good attorney or financial expert will help you understand the issues enough for yourself to see why their evaluation makes sense. It's not good enough to just completely outsource responsibility to someone else. Always do and trust own analysis (with an attorney or expert you trust when needed) instead of falling for the lure of "it's fine with these other experts so it should be fine for us." That's a recipe for a herd mentality random walk through and across the gray areas of the matter.

Nicholas_C 13y ago
>Always do and trust own analysis (with an attorney or expert you trust when needed) instead of falling for the lure of "it's fine with these other experts so it should be fine for us." I think the problem arises when you're a CEO/Executive of a company and don't have time to do this yourself.
- bfe 13y ago
  If someone doesn't have time to make sure the company has a legally compliant options policy, they don't have time to be the CEO.
  - jsonne 13y ago
    I pretty adamantly disagree. A CEO is a specialized role just like any other. I wouldn't expect a developer to know the ins and outs of financial compliance, and the same holds for a CEO and specific compliance rules.
    - bfe 13y ago
      Elon Musk said accounting rules are the easy part of being a tech CEO. [1] Anyone smart enough to be a technical CEO is smart enough to get on top of the non-technological core functions of a company; and having the CEO on top of them will be better for the company. 1. From memory; it was on video and I can't find a text reference now; in reference to SpaceX already using strict enough accounting controls to be Sarbanes-Oxley compliant even though it's a private company, IIRC.
      - auctiontheory 13y ago
        It's not a question of "being smart enough." It's a question of focus and "having enough time." The CEO's job is to lead and delegate and manage, and to trust that the CFO and GC are on top of the details. Also, while Tesla and SpaceX are great, I'm not sure I'd unquestioningly accept every word Elon Musk says as absolute fact.
    - ZachPruckowski 13y ago
      Fundamentally you as CEO are quite literally signing your name to a heck of a lot of policies and financial statements. You don't need to know the exact details of a situation to want to get a second opinion before signing your name on something official and legal that you're mailing into DC.
      - jsonne 13y ago
        Which is why you delegate to people you trust like the article spoke about.
    - rmrfrmrf 13y ago
      Yikes.
  - EpicEng 13y ago
    Except they can't, which is why other people are hired to fulfill those roles. I can extend your argument and say that the CEO should be involved in every detail of the company because, after all, "if the CEO doesn't have time to make sure the company [is doing X properly], hey don't have time to be the CEO."
    - ZachPruckowski 13y ago
      The CEO in the linked piece didn't need to get down into the weeds of the accounting laws, he just needs to know to get a second (outside/unbiased) opinion on anything that smells even faintly and remotely fishy that he's signing off on, and he needs to keep a general eye on principal/agent problems or conflicts of interest in the people he manages.
      - derekp7 13y ago
        And he needs to know that the outside opinion is actually the same opinion that would be shared by a potential prosecutor / judge / jury. And he needs to have enough intuition to know that something smells fishy. And that it is a bad fishy smell, not a good fishy smell.
        einhverfr 13y ago
        A lot of this comes down to two things: 1. Having a good grounding in accounting basics, and 2. Having enough accounting knowledge beyond the basics to have a discussion with accountants and lawyers regarding best accounting practices.
memracom 13y ago
One red flag in this case is that the CFO referred to PwC, a major accounting firm that her former company paid for some advice, as a reason why everything was OK. This amounts to "trust me" because you have no access to the terms under which PwC was retained by the other company and no idea who actually examined the options accounting or under what circumstances. Shady dealing is often obscured by appeals to a higher power. If you run into this in your own company you should be suspicious and try to get the company to hire an independent expert to review the situation, which is exactly what Ben did. For an expert to be truly independent they need to be retained by someone outside the group under suspicion. Suspicion is not a bad thing as long as you deal with it promptly. Dealing with it clarifies the situation and removes the suspicion, one way or another.
- chubot 13y ago
  Not to be cynical, but isn't this why "consulting firms" exist? Part of their job is to just some "reputable" outside justification for something someone internally wants to do anyway. It's to cover their ass. When there are mass layoffs, they hire "consultants". Because nobody inside wants to really take responsibility for the decision. It's better politically to have it come from some "outside objective analysis" (of course there is not such thing, and outsiders are often the worst people to make such decisions.)
  - memracom 13y ago
    The way you describe it they are the worst sort of consultants. I once worked on a project that a big 5 consulting firm was charging 1.7 million to deliver. After 6 months, a tech savvy guy convinced the CEO to hire me for 3 months to sort everything out. I came in, had systems up and running partially (but delivering useful results) in 2 weeks. Then I spent the rest of the 3 months delivering every deliverable that the big 5 firm was behind on. The customer refused to pay the big 5 firm's bills and took them to court to recover money already paid out. The big 5 firm settled out of court by returning all money previously paid plus 90,000 for my bill. It was one of those secret settlements which is why I am fuzzy on the details, but when I mentioned it to other people in the software development business, the stories poured out. Note how Ben Horowitz did not just farm out the decisions to a prestigious consulting firm but gave it to a guy that he knew and who he had carefully checked out in order to know that he was trustworthy.

by bfe 13y ago

Nicholas_C 13y ago

>Always do and trust own analysis (with an attorney or expert you trust when needed) instead of falling for the lure of "it's fine with these other experts so it should be fine for us." I think the problem arises when you're a CEO/Executive of a company and don't have time to do this yourself.

bfe 13y ago
If someone doesn't have time to make sure the company has a legally compliant options policy, they don't have time to be the CEO.
- jsonne 13y ago
  I pretty adamantly disagree. A CEO is a specialized role just like any other. I wouldn't expect a developer to know the ins and outs of financial compliance, and the same holds for a CEO and specific compliance rules.
  - bfe 13y ago
    Elon Musk said accounting rules are the easy part of being a tech CEO. [1] Anyone smart enough to be a technical CEO is smart enough to get on top of the non-technological core functions of a company; and having the CEO on top of them will be better for the company. 1. From memory; it was on video and I can't find a text reference now; in reference to SpaceX already using strict enough accounting controls to be Sarbanes-Oxley compliant even though it's a private company, IIRC.
    - auctiontheory 13y ago
      It's not a question of "being smart enough." It's a question of focus and "having enough time." The CEO's job is to lead and delegate and manage, and to trust that the CFO and GC are on top of the details. Also, while Tesla and SpaceX are great, I'm not sure I'd unquestioningly accept every word Elon Musk says as absolute fact.
  - ZachPruckowski 13y ago
    Fundamentally you as CEO are quite literally signing your name to a heck of a lot of policies and financial statements. You don't need to know the exact details of a situation to want to get a second opinion before signing your name on something official and legal that you're mailing into DC.
    - jsonne 13y ago
      Which is why you delegate to people you trust like the article spoke about.
  - rmrfrmrf 13y ago
    Yikes.
- EpicEng 13y ago
  Except they can't, which is why other people are hired to fulfill those roles. I can extend your argument and say that the CEO should be involved in every detail of the company because, after all, "if the CEO doesn't have time to make sure the company [is doing X properly], hey don't have time to be the CEO."
  - ZachPruckowski 13y ago
    The CEO in the linked piece didn't need to get down into the weeds of the accounting laws, he just needs to know to get a second (outside/unbiased) opinion on anything that smells even faintly and remotely fishy that he's signing off on, and he needs to keep a general eye on principal/agent problems or conflicts of interest in the people he manages.
    - derekp7 13y ago
      And he needs to know that the outside opinion is actually the same opinion that would be shared by a potential prosecutor / judge / jury. And he needs to have enough intuition to know that something smells fishy. And that it is a bad fishy smell, not a good fishy smell.
      - einhverfr 13y ago
        A lot of this comes down to two things: 1. Having a good grounding in accounting basics, and 2. Having enough accounting knowledge beyond the basics to have a discussion with accountants and lawyers regarding best accounting practices.

memracom 13y ago

One red flag in this case is that the CFO referred to PwC, a major accounting firm that her former company paid for some advice, as a reason why everything was OK. This amounts to "trust me" because you have no access to the terms under which PwC was retained by the other company and no idea who actually examined the options accounting or under what circumstances. Shady dealing is often obscured by appeals to a higher power. If you run into this in your own company you should be suspicious and try to get the company to hire an independent expert to review the situation, which is exactly what Ben did. For an expert to be truly independent they need to be retained by someone outside the group under suspicion. Suspicion is not a bad thing as long as you deal with it promptly. Dealing with it clarifies the situation and removes the suspicion, one way or another.

chubot 13y ago
Not to be cynical, but isn't this why "consulting firms" exist? Part of their job is to just some "reputable" outside justification for something someone internally wants to do anyway. It's to cover their ass. When there are mass layoffs, they hire "consultants". Because nobody inside wants to really take responsibility for the decision. It's better politically to have it come from some "outside objective analysis" (of course there is not such thing, and outsiders are often the worst people to make such decisions.)
- memracom 13y ago
  The way you describe it they are the worst sort of consultants. I once worked on a project that a big 5 consulting firm was charging 1.7 million to deliver. After 6 months, a tech savvy guy convinced the CEO to hire me for 3 months to sort everything out. I came in, had systems up and running partially (but delivering useful results) in 2 weeks. Then I spent the rest of the 3 months delivering every deliverable that the big 5 firm was behind on. The customer refused to pay the big 5 firm's bills and took them to court to recover money already paid out. The big 5 firm settled out of court by returning all money previously paid plus 90,000 for my bill. It was one of those secret settlements which is why I am fuzzy on the details, but when I mentioned it to other people in the software development business, the stories poured out. Note how Ben Horowitz did not just farm out the decisions to a prestigious consulting firm but gave it to a guy that he knew and who he had carefully checked out in order to know that he was trustworthy.