
Ask HN: Should founder / CEO be the Chairman of the board? - forthispurpose
Basically the subj. We are setting up the board for the startup and are wondering if we should work to get the founder-CEO to be the chairman. Investors want to have outside director to be the chairman and we, frankly, are not sure if this is worth negotiating over or is that just some kind of formality.
======
staunch
The dynamic changes as soon as founders give up control of the board. It goes
from investors having to convince founders of major decisions to founders
having to convince investors. It also makes the founders fireable. The
founders become effectively employees of the investors. This results in them
becoming become averse to "rocking the boat". It's a very powerful negative
incentive.

Investors have more than enough control over a company using money, minority
board seats, and the potential of follow-on funding. Founders should control
the board as long as as they're running the company.

A famous example of how bad boards can be is Facebook's board wanting to sell
to Yahoo for $1 billion. Zuckerberg controlled the board and vetoed the idea
outright against them. Facebook is only worth $600+ billion today because he
maintained control.

~~~
matt_the_bass
According to most bylaws CEOs sit at the pleasure of the board, not the
pleasure of the chairman. So a ceo can be fired any time the board votes for
it regardless of who the chairman is.

Perhaps a better question to ask is what is really the role of the chairman vs
the CEO in the company.

~~~
staunch
The board generally controls everything, including who the chairperson is.
Founders should maintain board control as long as possible, hopefully until
they leave voluntarily. They're the least likely people to destroy the
company. They're the most qualified to run it (having created it) and the most
incentivized not to destroy it (owning a large part of it).

~~~
matt_the_bass
I’m not convinced that they are always the most qualified to run it. I’ve seen
plenty of good technologies founded by people who are terrible at executing.

------
shoo
It may be worth thinking about hypothetical future scenarios where the
interests of the chairman of the board and the founder-CEO and the company are
not all aligned.

There's a quora post by Dale Strickler that gives one perspective:
[https://www.quora.com/Does-a-Chairman-of-the-Board-have-
more...](https://www.quora.com/Does-a-Chairman-of-the-Board-have-more-power-
than-a-CEO)

------
akhatri_aus
If you're Carlos Ghosn its a no brainer.

