Comment by ragall
5 hours ago
The board does have the legal ability to fire the CEO, provided that it passes a very bar, such as being able to prove mental unfitness, etc... which wasn't the case here.
On the other hand, if you're arguing that a board should be able to fire the CEO without cause and have him barred for eternity, then you're arguing that majority shareholders shouldn't be allowed to serve as CEO - in a private company !! - which has been the basis of capitalism for ever. It would destroy the economy as we know it.
That's news to me. One of the few real powers of the board is to fire the CEO. You don't need to put the CEO on a PIP first. If the board thinks the CEO could do better, that is all that it takes.
The board represents the will of the shareholders. When the CEO is also the majority shareholder with 84% of the voting power, the board better have a damn good reason, otherwise the majority shareholder can simply dissolve the board and appoint a new one, which he did.
They represent the shareholders (all of them), but are also expected to act as a reasonable person would for the good of the company. They’re expected to use good judgement, uphold the law and a bunch of other issues. “The majority shareholder says jump off a cliff and we must obey” is nonsense.
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