OPERATOR’S MANUAL
Why the Hell Does My Board Act Like That?
The tension between CEOs and their boards is real, but it doesn’t have to be fatal
The phone rang at the appointed hour. My client, a software company CEO, was calling for his regular session. I picked up the phone:
“Hello”
“Why the hell does my board act like that?”
“Good morning, James,” I answered, and we both laughed.
We talked through the upcoming financing. Some investors — folks who came into the company only in its last round — were already jockeying around terms and prices of the upcoming round. Some of the other directors — investors who’d been with the company since the beginning — were also beginning to draw a hard line around terms they would find acceptable.
In a sense, while they were all directors, as investors, they were beginning to play a game of chicken with the company’s financing — each holding fast to a position deemed best for the shareholders they represent, and yet, as the negotiations would tick on, the company’s ability to raise the needed funds could be jeopardized.
After the session, I asked if I could quote him.
