
The Bad Board Member - duck
http://steveblank.com/2011/01/19/the-bad-board-member/
======
Umalu
This article is ostensibly about a bad board member, but in reality it is
about a bad board. A bad board member is only one director out of many, and
cannot, on his own, do much more than disrupt meetings. A good board will shut
up a bad board member and not allow him to lead them astray. A bad board
allows the bad board member to run amok and follows him there. A founder must
manage the board and assume there will always be a rotten egg in the bunch.
Herding cats isn't easy, but it must be done.

~~~
j_baker
But my experience is that groups tend to follow the person who is loudest, not
the person who is best qualified to lead them. It is very much possible for
one rotten egg to ruin the whole batch.

I know nothing about managing a board, but how does one deal with this aside
from being the loudest blowhard on the board?

------
mmaunder
While I love Steve's blog, he doesn't share what advice he gave his former
student. Mine would be this:

I don't know what the power structure and equity structure is in the
organization, so I don't know how vulnerable your job and your ownership in
your company is. But in general boards can't simply fire people without cause.
I would strongly suggest that you start by documenting absolutely everything.
Make sure all meetings are minuted and keep your own copies of those minutes.
If the bad board member says something to you outside a meeting that has some
bearing on your relationship or the company, find an excuse to get him to
email it to you. You can even record phone calls in many states with only one
party privy to the fact the call is being recorded. (IIRC California is not
one of these states).

Secondly, get chatting to a great corporate attorney. Email me if you need a
Seattle reference. You need to get a deep understanding of how vulnerable you
are and what levers you have to protect yourself and your business. Then (and
I say this again) keep records of everything in the context of knowing what
will help your situation.

This quote suggests that you are kicking ass at your business:

"We went through the status of the company, and at least from the outside it
sounded good. In fact it sounded great: three major versions of the product
shipped, multiple iterations and a few pivots under their belt, revenue was
growing even faster than plan."

The key here is "...even faster than plan.". You and the board agreed to a
plan and you over-delivered. It's important that you document your own
performance - get hard evidence of the success story above.

Other than that, keep doing the great job that you clearly are doing and save
the war chest you're accumulating for the crunch if it ever comes.

------
JacobAldridge
_"while a VC can remove a founder who misbehaves, there is no corresponding
recourse when a VC is the source of the problem."_

Yes, there is. A board is decided upon by shareholders. There may be
shareholder agreements (linked to term sheets etc) that grant Board membership
or nomination powers to a minor shareholder, like a VC, but the power is
retained at the Shareholder level.

The Shareholders nominate the Board. The Board instructs the CEO. If the CEO
is strong and/or a Shareholder, this often makes alignment between those three
roles easier, but of course it doesn't prevent the possibility of a situation
like the OP describes. Still, claiming there's no recourse for a bad board
member or VC is not accurate.

And founders don't forget - funding is always an option, with risks and
rewards.

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swombat
Not a very useful article by Steve Blank standards... It's missing the
critical parts about "What I did when this happened to me" and "What you
should do if this is happening to you", as well as "What you should do to try
to avoid this".

~~~
huherto
It seems that Steve's aim was to raise awareness to the problem so other VC
start thinking about it.

~~~
ulvund
You mean people should develop their own problem solving skills instead of
merely copy/pasting solutions from sites on the internet? Preposterous.

------
erikstarck
At least there are sites like <http://www.thefunded.com/> that lets you rate
VCs.

~~~
simonk
The VC could of been great, but at least in this article was too busy to take
a board seat so just put someone else in.

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neworbit
Moral of this story: get a commitment from the VC team member you want to be
on your board - don't get it shuffled off to someone else on their team who is
just looking to prove what a hardass they are.

Or don't give up that board seat, but that's pretty much not viable once you
take VC.

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T_S_
Once you have board they're your boss. Remember those? Their most
distinguishing feature is they can fire you much, much easier than you can
fire them. Bob Dylan wrote a song about this. Upvotes for the correct title...

As for the other board members, they're not looking for these kinds of
precedents to get set.

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anonymous246
> He [founder] said that Bob [board member] described him to others on the
> board as the "crazy aunt you hide in the closet when the guests come."

Outrageous. This is why I hope I never have to take VC.

~~~
catshirt
I think I've been described in a similar way, so the bright side is apparently
VC funds crazy aunt types.

