

How To Choose A Board Member - eladgil
http://blog.eladgil.com/2011/12/how-to-choose-board-member.html

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gordonbowman
Great post on an important topic. I also like Fred Wilson's advice:

"Above all else, look for great judgment and ethics."

<http://avc.blogs.com/a_vc/2008/02/thoughts-on-cho.html>

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cq
Why not make every employee a board member, with one vote each, and equal
ownership of the company?

Decisions would be made based on what is in the best interest of the employees
of that company. A real democratic way to run a business.

~~~
moonchrome
Two words : corporate politics. Working former ex-communist company (~300
workers) where workers own the majority share of stock turned me from a
idealistic socialist to a cynical libertarian in just two years.

~~~
mike_esspe
Can you share the experience?

~~~
moonchrome
Oh, the memories :)

Essentially the place was overstaffed, it had >300 employees, 200 of them were
actually doing _something_ and if done optimally that number would be ~150.
Everyone focused on the immediate benefits (their pay check, their department,
etc.) and ignored the costs (company profitability). There was classic
division and warfare among departments, that lead to somewhat comical
situations. For instance, at some point they realized they cannot raise the
salaries anymore because the company would not be profitable, and all
department heads naturally agreed, but they also wanted their friends to get
the benefits - so instead of raising paychecks they started giving fictitious
promotions. At one point the department managers had 10 "replacements" (whats
the correct term here ?).

There was a guy in my department that _literally_ did nothing, he would check
in, surf the internet and check out every day for 7 years. His job was removed
when the production line was upgraded and he was not skilled anyway, but he
was a friend of the department manager and he was 50 so they decided it would
be "unfair" to fire him. I'm not exaggerating the doing nothing part, I worked
in the same office for two months.

The IT department was hilarious. These guys ordered 150K$ worth of servers
(this was 10 years ago) only to figure out (when they arrived) that they don't
know how to connect them to the existing system because they fired the only
guy who knew that system (because of politics). So instead of admitting their
incompetence they just hid it - and nobody noticed ! I saw the servers in the
boxes when the guy was telling me the story. They had 100 IP telephones (that
was ~100€ a peace) in boxes because they didn't want to bother connecting them
and setting up the servers, but it sounded nice as a presentation to the board
to clear the budget. At one point the network got hacked and the hacker
ransomed 100K$, and nobody got fired for that !

Production department regularly sabotaged upgrades that would threaten their
positions, for eg. they had a production line tuning/control server that would
replace ~4 workers and increase the product quality, they actively sabotaged
the introduction calming it didn't work. Finally they made a deal with the IT
department to just drop it, and there it just stood there in the server room.
It actually did work since a former production department manager decided to
test run it with a friend after work (to verify their claims) and got it
running fine. Needless to say, his ideas about reducing the numbers of
employees to a more sustainable level got him to the _former_ part in few
months.

People were regularly stealing products, gasoline from distribution vehicles,
equipment, etc. Even when caught on few occasions nobody was fired/it was
quickly covered up within the department. Nepotism was common practice. People
were sharing gigs of porn and pirated movies trough dedicated network servers.

There are so many incredible stories from that place, most people don't
believe me when I tell them.

The company was able to survive all this because they got out of communism as
a monopolist and the board/management was still connected to local politicians
so they got shady deals from local government regularly. But when government
got in to financial troubles, the demand dropped and competition entered the
market workers decided to sell their stocks, and now the new owner is firing
>50% of workers and outsourcing a part of the production.

This all ignores the people that actually did the grunt work and got screwed
over because they weren't the relatives of some manager or the ones with
social connections (and I wasn't among the hard working, actually, that's why
I decided to quit after a while, there just wasn't anything to do for me
there).

The worst part was that during all that perversity, everyone thought he was
justified in doing what he did, even morally superior for "saving others".
After that I figured out that (market) profit isn't such a bad thing after
all, and that politics is a far more perverse game.

